In many international comparisons, drug prices are highest in the United States, but for other commodities, prices are higher elsewhere. A McDonald's Big Mac costs more than three times as much in Switzerland as in Hungary, while the price in the United States is in the middle of the range. The price of a cappuccino at Starbucks is about twice as high in Tokyo as in New Zealand. Another factor to consider is the extent and nature of the generic drug industry. Under this law, the entry of generic products into the marketplace is greatly facilitated when the patent of an innovative product expires.
Generics significantly affect the prices that American consumers pay for drugs.
In this country, generics compete fiercely with each other, with the innovator's brand, and with other patented products. The entry of generic therapies is, and promises to be, increasingly important in this country as a means of cost containment. Many other complexities confound cross-country comparisons of pharmaceutical prices. Indeed, to assess the overall impact on consumers, it is essential to look at an entire market basket of products. Patricia M. Danzon has created an extensive body of research.