Current Empirical Estimates and Comparisons with Previous Studies

Prescription drug prices in the United States are significantly higher in comparison to other nations, with prices in the U.S. averaging 2.56 times (256% higher) those seen in 32 other nations, according to a new RAND Corporation report.

The gap between prices in the U.S. and other countries was even larger for brand-named drugs, with U.S. prices averaging 3.44 times those in comparison nations.

In comparisons with individual countries, U.S. prices ranged from 170 percent of prices in Mexico to 779 percent of prices in Turkey.

The RAND study found that prices for unbranded generic drugs - which account for almost 85-90% of drugs sold in the U.S. by volume but around 10-12% of U.S. spending - were slightly lower in the U.S. than in most other nations. U.S. prices were 84 percent of prices in all non-U.S. countries for unbranded generics.

The analysis used manufacturer prices for drugs because net prices, the prices ultimately paid for drugs after negotiated rebates and other discounts are applied, are not systematically available. However, even after adjusting prices downward to account for rebates and other discounts, U.S. prices were 190 percent of prices in other countries.

The RAND analysis is based on 2018 data and provides the most up-to-date estimates of how much higher drug prices are in the U.S. as compared to other countries in the Organization for Economic Co-operation and Development.

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