Brand Name Drugs Cost 344% More in the U.S. Than in Other Countries
A recent Rand Corporation study shows that brand name drugs cost 344% more in the United States than in other countries. This report is of particular importance in my mind because it’s the first substantive, methodologically rigorous analysis of international drug price comparisons in ten years. In short, this deep dive is long overdue. But here’s the thing: other reports in the interim have shown strikingly if not identical results!
The Rand study included 32 member countries of the Organisation for Economic Cooperation and Development (OECD). In looking at all drugs, brand and generic, costs are 256% more in the U.S. For biologics, which are generally the most expensive prescription products, U.S. prices are on average 295% the international price. For the top 60 drugs by sales, U.S prices are on average 394% higher. For all brand name drugs, the figure is 344%
Doing some simple math, the inverse of 344% more is 75% less.
Another study, conducted in 2019 by the Congressional House Ways and Means Committee, compared U.S. prices to those in 11 high-income countries and found that the average savings was 75%! The Committee report looked at the top 79 drugs by sales sold in Medicare. The top 60 drugs by sales category from the Rand report were likely included among these 79 drugs. Those were based on ex-factory prices, meaning the prices charged by drug manufacturers paid by wholesalers, for example.
PharmacyChecker.com took its own dive into online retail prices for those drugs included in the Committee’s reports that are available for sale through retail mail order internationally and found the average potential savings were 72%.
The pharmaceutical industry flacks, such as their well-funded “non profit” groups who impose prescription drug importation, have already criticized the Rand report for using drug company list prices, which do not include the rebates provided to third parties. Big Pharma apparently deems that unfair… Here’s my response: The report actually DOES address net prices and includes an estimate of the price differentials based on additional analysis. Compared to net prices for brand name drugs, U.S. prices are still 230% higher than the average of OECD countries. That’s without doing similar adjustments for net prices in any of the other countries. Furthermore, there are about 35 million uninsured and tens of millions more underinsured Americans who are potentially subject to the list price without rebates, so let’s stop pretending that list prices don’t matter.
