In general, the U.S. prices are 2.56 times those of the other nations, and 3.44 times the cost of nongeneric products compared to other countries, the RAND report points out.
On the other hand, prices for unbranded generic drugs, which make up 84% of drugs sold in the United States by volume but only 12% of the nation’s spending, are slightly lower in the United States than in most other nations. Those medications were, on average, just 84% of the prices paid in other nations.
“Brand-name drugs are the primary driver of the higher prescription drug prices in the U.S.,” said Andrew Mulcahy, PhD, MPP, the lead author of the study and a senior health policy researcher at RAND, a nonprofit, nonpartisan research organization. “We found consistently high U.S. brand name prices regardless of our methodological decisions.”
Based on 2018 data, the RAND analysis compared U.S. drug prices to other countries in the Organization for Economic Co-operation and Development (OECD). Manufacturer prices were used in the study because net prices, after negotiated rebates and other discounts, are not systematically available.
The authors point out, however, that even after adjusting U.S. prices downward based on an approximation of those discounts, U.S. prices still remained substantially higher than those in other countries.
Among 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, the study found.
Several subsets of prescription drugs, including brand-name originator drugs, unbranded generic drugs, biologics and nonbiologic drugs, were included in the RAND analysis. Those brand-name drugs that can cost thousands of dollars per treatment and treat illnesses such as hepatitis C or certain types of cancer, according to the report.
“Many of the most-expensive medications are the biologic treatments that we often see advertised on television,” Dr. Mulcahy said. “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.”
Overall, researchers estimated that across all of the OECD nations studied, total drug spending was $795 billion. The U.S., meanwhile, accounted for 58% of sales, but just 24% of the volume.
Background information in the report notes that drug spending in the U.S. jumped by 76% between 2000 and 2017, and the costs are expected to increase faster than other areas of healthcare spending over the next decade as new, expensive specialty drugs are approved.
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