'International Prescription Drug Price Comparisons: Estimates Using 2022 Data' (RAND Research & Commentary Research Reports 2024) by Andrew W Mulcahy, Daniel Schwam and Susan L Lovejoy comments
Understanding the extent to which prescription drug prices are higher in the United States than in other countries—after accounting for differences in the volume and mix of drugs—is useful when developing and targeting policies to address both growth in drug spending and the financial impact of prescription drugs on consumers. This report summarizes findings from comparisons of drug prices in the United States and other high-income countries based on 2022 data and presents results for specific types of drugs, including brand-name originator drugs and unbranded generic drugs, and from sensitivity analyses.
Except for unbranded generics, manufacturer gross drug prices in the United States were substantially higher than those in other countries. Across all drugs, U.S. prices were 278 percent of other countries’ prices.
U.S. gross prices for brand-name originator drugs were 422 percent of prices in comparison countries.
After applying an adjustment for rebates paid by manufacturers, U.S. net prices for brand-name originator drugs were relatively lower but still over three times as high as prices in other countries.
The United States had lower prices for unbranded generics than most countries. Unbranded generics accounted for 90 percent of U.S. prescription drug volume—a much larger share than the 41 percent for the comparison countries—but only 8 percent of U.S. prescription drug spending at manufacturer gross prices (compared with 13 percent in other countries).
In contrast, brand-name originator drugs accounted for only 7 percent of U.S. prescription drug volume and 87 percent of U.S. prescription drug spending (compared with 29 percent of volume and 74 percent of spending in other countries).
Overall, the United States' considerable unbranded generic market share and low average unbranded generic prices did not fully offset higher brand-name originator prices. ...
Understanding the extent to which prescription drug prices are higher in the United States than in other countries—after accounting for differences in the volume and mix of drugs—is useful when developing and targeting policies to address both growth in drug spending and the financial impact of prescription drugs on consumers.
A prior RAND analysis compared 2018 manufacturer gross drug prices in the United States with those in 32 Organisation for Economic Co-operation and Development (OECD) countries using a price index approach. The earlier analysis reported results for all drugs combined, for specific categories of drugs, and under different methodological approaches. This report updates the main results from this earlier report using more recent data through 2022. It also includes new analyses focusing on price comparisons for biosimilars and changes in price comparison results over time.
In brief, when analyzing data for all prescription drugs available in the United States and comparison countries, we found that U.S. manufacturer gross prices for drugs in 2022 were 278 percent of prices in the 33 OECD comparison countries combined. Put another way, prices in other countries were 36 percent—or a little more than one-third—of those in the United States.
These results stem from the combination of starkly different price comparison findings for brand-name versus generic drugs: U.S. prices for brand-name originator drugs were 422 percent of prices in comparison countries, while U.S. unbranded generics, which we found account for 90 percent of U.S. prescription volume, were on average cheaper at 67 percent of prices in comparison countries, where on average only 41 percent of prescription volume is for unbranded generics. U.S. prices for brand-name drugs remained 308 percent of prices in other countries even after adjustments to account for rebates paid by drug companies to U.S. payers and their pharmacy benefit managers.
These high-level findings from the current report are consistent with results from the prior analysis using 2018 data. Overall, the gap between U.S. and other countries’ prices widened slightly between the two analyses because of faster growth in U.S. prices, a change in U.S. drug mix, a change in the overlap of drugs sold in both the United States and other countries, or a combination of factors.
