Prescription Drug Prices in the U.S. Are Twice as High: Here’s Why

• A new survey indicates that prescription drug prices in the United States are more than twice as high as in other countries.
• Experts say brand-name drugs are the main driver of higher prices.
• They note that the actual out-of-pocket cost to consumers for a prescription is difficult to gauge due to consumer rebates and price adjustments to insurers.

Most people in the United States know that prescription drugs can be expensive.

How expensive?

Prescription drugs in the United States on average cost around 2.5 times more than those same drugs do in other Western countries, according to a new report from the nonprofit, nonpartisan research organization, RAND Corporation.

Those prices, in fact, have been steadily increasing for a while.

The RAND study found that spending on prescription drugs in the United States rose 76 percent between 2000 and 2017.

According to the RAND report, brand-name drugs appear to be the primary driver of price disparities in the United States compared to the 32 other nations analyzed in the study.

For example, brand-name depression drug Abilify costs $34 per pill in the United States compared to less than $5 per pill in Canada, according to a PharmacyChecker analysis.

Likewise, asthma drug Flovent costs $781 in the United States compared to $152 in the United Kingdom, Australia, and New Zealand.

All told, countries in the study spend nearly $800 billion on prescription drugs per year, with the United States accounting for 58 percent of the total but only 24 percent of the consumption.

Generic drugs, which account for 84 percent of all drugs sold in the United States, are actually slightly cheaper here than in other countries, on average. But the RAND study shows that they make up only 12 percent of total pharmaceutical drug spending,

“For the generic drugs that make up a large majority of the prescriptions written in the United States, our costs are lower,” Andrew Mulcahy, PhD, lead author of the study and a senior health policy researcher at RAND, said in a press statement. “It’s just for the brand name drugs that we pay through the nose.”