U.S. Residents Spend More than Twice as Much on Rx Drugs
Brand-name Spending puts U.S. Drug Costs through the Roof
Friday, January 29, 2021 - A newly released analysis shows that U.S. citizens pay 2.56% more for prescription drugs than people living in 32 countries belonging to the Organization for Economic Cooperation and Development (OECD).
Americans pay about twice as much as the Japanese, and about 2.6 times as much as the French for the same medications. When drugs are branded, we pay an average of 3.44 times more than the 32 OECD member countries.
Among G7 nations, the U.K., France, and Italy had the lowest prescription drug prices, while Canada, Germany, and Japan had higher prices -- yet still not as much as in the U.S., the report found.
The analysis, released by RAND Corporation, showed that, though Americans pay less for generic drugs, the sometimes exorbitant mark-ups on brand name drugs drive the average drug costs significantly higher than in other markets.
The RAND analysis is based on the most recent data available, which is a 2018 publication of cost and volume of sales published by industry-standard IQVIA MIDAS dataset. Prior analyses comparing drug costs have been based on data that is more than a decade old.
Total dollars spent on prescription drugs among all OECD nations is estimated to be about $795 billion. The United States accounts for about 58% of all sales by cost, yet only 24% of the volume of drugs sold.
According to a statement by RAND, "Recent estimates are that prescription drug spending in the United States accounts for more than 10 percent of all health care spending. Drug spending in the United States jumped by 76% between 2000 and 2017, and the costs are expected to increase faster than other areas of health care spending over the next decade as new, expensive specialty drugs are approved."
"Many of the most-expensive medications are the biologic treatments that we often see advertised on television," RAND's Andrew Mulcahy said in the statement. "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."
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