Drug prices in the U.S. are 2.56 times higher

Drug prices
© Robert Kneschke

Prescription drug prices in the United States are 2.56 times higher than in other countries, according to a new RAND Corporation report

Researcher at RAND calculated the manufacturer price indexes of prescription drugs under a wide range of methodological decisions and found that, compared to 32 other nations, prices remained substantially higher in the U.S.

The study found that prescription drug prices in the United States are, on average, 2.56 times higher than in other nations. The gap is even larger for brand-name drugs, at 3.44.

The team examined several subsets of prescription drugs, including brand-name originator drugs, unbranded generic drugs, biologics and nonbiologic drugs and found that some of the highest-priced drugs are used to treat life-threatening illness such as hepatitis C or cancers.

Generic drugs

The only instance where prices were lower was in generic drugs, where prices were 84% of the average paid in other nations.

Andrew Mulcahy, lead author of the study and a senior health policy researcher at RAND, a nonprofit, nonpartisan research organization, said: “Brand-name drugs are the primary driver of the higher prescription drug prices in the U.S. We found consistently high U.S. brand name prices regardless of our methodological decisions.”

“For the generic drugs that make up a large majority of the prescriptions written in the U.S., our costs are lower. It’s just for the brand name drugs that we pay through the nose.”

“Many of the most expensive medications are the biologic treatments that we often see advertised on television. 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.”

Researchers estimated that across all of the nations studied, total drug spending was $795 billion and the U.S. accounted for 58% of sales, but just 24% of the volume.


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