Compared to Other Countries, Americans Pay Much More for Prescription Drugs

FRIDAY, Jan. 29, 2021 (HealthDay News) -- Americans pay nearly three times more for prescription drugs than people in dozens of other countries, a new study shows.

Researchers analyzed 2018 data and found that prescription drug prices in the United States average 2.5 times more than in 32 other Organization for Economic Co-operation and Development (OECD) nations.

The cost of brand-name drugs is even more -- an average of 3.4 times higher -- in the United States than in other countries.

However, generic drugs are slightly cheaper in the United States than in most other nations. In this country, generic drugs account for 84% of drugs sold by volume but only 12% of drug spending, according to the researchers at the RAND Corp., a nonprofit, nonpartisan research organization.

"Brand-name drugs are the primary driver of the higher prescription drug prices in the U.S.," said study author Andrew Mulcahy, a senior health policy researcher at RAND. "We found consistently high U.S. brand-name prices, regardless of our methodological decisions."

For their study, the researchers used manufacturer prices for drugs due to a lack of availability of net prices, which are those ultimately paid for drugs after negotiated rebates and other discounts are applied.

But even after adjusting U.S. prices downward based on estimated discounts, U.S. drug prices remained substantially higher than those in other countries.

Among other nations, the United Kingdom, France and Italy generally have the lowest prescription drug prices, while Canada, Germany and Japan tend to have higher prices, according to the study, which is available on the RAND website and the U.S. Department of Health and Human Services website.

"Many of the most expensive medications are the biologic treatments that we often see advertised on television," Mulcahy said in a RAND news release. "The hope is that competition from biosimilars will drive down prices and spending for biologics. But biosimilars are available for only a handful of biologics in the United States."

Across all the nations in the study, total drug spending in 2018 was an estimated $795 billion. The United States accounted for 58% of sales, but just 24% of the volume.

U.S. drug spending surged 76% between 2000 and 2017, and is expected to increase faster than other areas of health care spending over the next decade as new, expensive specialty drugs are approved, according to RAND.

More information

The American Medical Association has more on prescription drug prices.

SOURCE: RAND Corp., news release, Jan. 28, 2021