In comparison with individual countries, U.S. prices ranged from 170% of prices in Mexico to 779% of prices in Turkey. (Photo: Shutterstock)
Prescription drugs cost an average of 2.56 times more in the United States than they do in 32 other countries, according to a new report from RAND Corporation.
That disparity is even greater for brand name drugs, with U.S. prices averaging 3.44 times those in comparison nations. The study also found that prices for unbranded generic drugs — which account for 84% of drugs sold in the United States by volume but only 12% of U.S. spending — are slightly lower in the United States than in most other countries.
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"Brand name drugs are the primary driver of the higher prescription drug prices in the United States," Andrew Mulcahy, lead author of the study and a senior health policy researcher at RAND, said in a statement. "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 United States, our costs are lower. It's just for the brand name drugs that we pay through the nose."
He noted that some of the highest-priced drugs in the United States are brand-name ones that can cost thousands of dollars per treatment and treat life-threatening illnesses such as hepatitis C or cancers.
RAND is a nonprofit and nonpartisan research organization, and this analysis — titled "International Prescription Drug Price Comparisons: Current Empirical Estimates and Comparisons with Previous Studies" — is based on 2018 data. Researchers says it provides the most up-to-date estimates of how much higher drug prices are in the United States than in other countries in the Organisation for Economic Co-operation and Development.
Researchers estimated that across all of the OECD nations studied, total drug spending was $795 billion. The United States accounted for 58% of sales, but just 24% of the volume.
Among the study's other findings:
- Of the G7 nations, the United Kingdom, France, and Italy generally have the lowest prescription drug prices, while Canada, Germany, and Japan tend to have higher prices.
- U.S. prices were 190% of prices in other countries after adjusting U.S. prices downward to account for rebates and other discounts.
- In comparison with individual countries, U.S. prices ranged from 170% of prices in Mexico to 779% of prices in Turkey.
Researchers say that conducting such comparisons requires a variety of decisions and assumptions to calculate price indices. The United States had consistently higher drug prices regardless of how the researchers calculated price indices and treated outliers in the data. They examined several subsets of prescription drugs, including brand name originator drugs, unbranded generic drugs, biologics, and nonbiologic drugs.
RAND's team used manufacturer prices for drugs because net prices are not systematically available. The study was sponsored by the Office of the Assistant Secretary for Planning and Evaluation in the U.S. Department of Health and Human Services.
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