American Drug Prices Are Much Higher Than in Other Wealthy Nations, Study Shows

U.S. prescription drug prices are 256% higher than in 32 other wealthy countries, according to a new study by the RAND Corporation.

The price gap widens even further when it comes to brand-name drugs, which the study notes are 344% more expensive in the U.S. than in the other countries in the study, including Canada, France, Germany and the U.K.

Read on to learn how much more you're paying for important medications — and to learn how to secure the best and most affordable drug coverage from your health insurer at a time when you might very well need it more than ever.

Drugs cost more in the US

Looking at other G7 countries, the RAND researchers found that the U.K., France and Italy reported the lowest prescription-drug prices. Meanwhile, Canada, Germany and Japan typically report higher prices, but nowhere near those in the U.S.

According to the researchers’ estimates, across all 32 countries evaluated, total drug spending amounted to $795 billion. The U.S. by itself accounts for 58% of that spending.

The news wasn’t entirely grim. One positive revelation was that prices for generic drugs, which account for 84% of the drugs sold in the U.S. by volume, were slightly lower in the U.S. than in most other countries.

Biologics are especially pricey

Among the drugs that cost much more in the U.S. are those in an important category known as biologics, which are made from living organisms or parts of living organisms. Biologics treat everything from rheumatoid arthritis, diabetes, cancer and retinal disease. Even Botox is a biological drug (it’s produced by a bacteria known as Clostridium botulinum).

These drugs, many of which are well known and advertised on TV, are 295% more expensive in the U.S. than in the 32 other countries.

About the study

The study was funded by the U.S. Department of Health and Human Services. RAND, a nonprofit organization, used data from 2018 (the most recent available figures) to compare U.S. drug prices to those of other countries in the OECD.

The figures in the study come from industry data on drug sales and volume for most prescription drugs sold in the U.S. and the other countries. Instead of looking at specific drugs, researchers evaluated groups of drugs.

The study also omits net prices — what consumers pay after rebates and discounts — since reliable information on those prices isn’t widely available.

What can you do?

It can be disconcerting to find out you may be paying more than others for the drugs you need — especially in the midst of a global pandemic.

Even though, as a consumer, you can’t change drug prices at the manufacturer level, there are some clever money-saving methods you can try: