Americans Pay Two Times More For Prescription Drugs Compared to Other Countries

by DailyHealthPost Editorial

Prescription drugs are cheap to manufacture. And even cheaper when they’re outsourced in countries like India. Yet, Americans pay nearly three times more for prescription drugs than people in dozens of other countries, a new study shows.

After analyzing data from 2018 for 30,000 drugs, researchers found that the U.S. paid on average 2.5 times more than in 32 other Organization for Economic Co-operation and Development (OECD) nations. The cost of brand-name drugs was even higher with an average of 3.4 times what other countries pay.

However, generic drugs are slightly cheaper in the United States than in most other nations. In the U.S., 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.”

Countries like the United Kingdom, France and Italy generally have the lowest prescription drug prices.

“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.”

Global spending for drugs across the world in 2018 was valued at $795 billion. 58% of sales occurred in the U.S. alone, while only representing 24% of the total volume. Between the year 2000 and 2017, U.S. drug spending surged 76% and may have been partly due to the opioid crisis. Based on this trajectory, RAND predicts that drug spending will grow faster than any other areas of healthcare.