Are prescription drug prices in the United States 10 times higher than in other countries? Sometimes only

Sen. Bernie Sanders (I-Vt.), both in Congress and as a presidential candidate, has always taken strong stands against the rising cost of prescription drugs. Since becoming chairman of the influential Senate Health, Education, Labor and Pensions Committee this year, he has made lowering drug costs a top priority.

So it’s not surprising that the senator, during a recent television interview Sunday morning, railed against rising drug prices in the United States and compared what Americans pay to what people in other countries have to fork out.

“We pay by far the highest prices in the world for prescription drugs, in some cases 10 times more than in any other country,” Sanders said on CNN’s “State of the Union” last month.

After all, it’s a popular political talking point. But 10 times that? That was kind of ironic. We decided to check it out.

complex market

We first asked the senator’s office for documents to support Sanders’ claims. But our repeated requests were not acknowledged.

So, we started digging on our own. What we found is that Sanders, as might be expected, was right in his assertion that drug prices in the United States generally exceed drug prices in other countries. However, the magnitude of the difference varies with the different drugs and the countries included in the comparison, among other factors.

And no matter how the studies we examined sliced ​​the data, the drug’s price differential never reached Sanders’ stated level. However, experts told us his point of view is an advantage. “I think the quote is on target, if a little vague in scope,” said Andrew Mulcahy, chief health economist at Rand Corp., a global policy think tank.

Take, for example, the oft-cited 2021 study by Rand which found, based on 2018 numbers, that drug prices in the United States were, on average, 2.56 times the prices of drugs in 32 other OECD countries. These are mostly high-income, developed countries. For brand-name drugs, the gap was even larger: Americans paid 3.44 times the price for those drugs, on average. But the opposite was true for generic drugs, for which Americans paid only 84% of what people in other countries paid. One exception: Türkiye. American drug prices were nearly eight times higher than in Turkey in general, and 10.5 times more than brand-name drugs.

Mulcahy, a co-author of the report, said that while the ratio among all drugs typically doesn’t reach Sanders’ “10 times” mark, “for some drugs, it does come close, if you look at the manufacturer’s list price.”

However, manufacturer price isn’t necessarily the best measure—especially if the idea is to capture what consumers pay for.

This is because it does not reflect rebates and other discounts negotiated by insurance companies and pharmacy benefit managers that could lower the retail price of the drug. Most people with health insurance pay rates that include these deductibles. The report indicated that the Rand researchers used the manufacturer’s price, because the discounts are confidential and it is difficult to determine the extent of their impact on net prices.

Other studies have found smaller—though still significant—gaps than Sanders reported. In 2021, the Government Accountability Office released a comparative analysis of the prices of 20 brand-name drugs in the United States, Canada, Australia, and France. The study, which was conducted by Sanders himself, found that retail prices were 2 to 4 times more than in the US

Another analysis, this one by Peterson-KFF Health System Tracker, compared the prices of seven brand-name drugs in the United States, Germany, the Netherlands and the United Kingdom, and also found that some prices in the United States were roughly two to four times as high as those in other countries. But the gap was smaller for the other drugs.

The drugs tracked in this analysis “tend to be specialty, expensive drugs no matter where they are purchased,” said Cynthia Cox, director of the Peterson-KFF Health System Tracker, who co-authored the analysis.

Since the United States does not directly regulate drug prices as many other countries do, some prices here are more expensive. In 2019, the United States spent $1,126 per person on prescription drugs, including $963 on health plans and $164 spent by people out of pocket, according to a KFF analysis of OECD data. Spending by comparable countries was $552 per capita, including $466 for health plans and $88 in personal spending for individuals.

Experts added, however, that price is only one component that affects public spending on prescription drugs.

“If we’re spending more, part of it may be because we’re paying higher prices, but it may also be because we’re using more drugs,” Cox said.

Then there is insulin

And according to Mulcahy, Sanders could find support for his statement in insulin prices. A 2020 RAND study for the Office of the Assistant Secretary of Health and Human Services for Planning and Evaluation compared 2018 insulin prices in the United States with insulin prices in 32 other OECD countries. Their findings: The average US manufacturer price for a standard unit of insulin sold domestically was more than 10 times the international price, $98.70 in the US versus $8.81 in the OECD sample.

Statistics like these have led to a somewhat partisan rallying cry to address drug costs. The price of insulin has been the subject of congressional hearings, including one by Sanders this month.

Meanwhile, capping insulin costs at $35 a month for Medicare recipients was President Joe Biden’s signature win in the Suppression Act. Members of Congress, Sanders included, want to lower insulin prices even further. “There is no reason for Americans to pay the highest prices in the world for Insulin – in some cases, ten times as much as people in other countries have.”

Our verdict

When Sanders said Americans “pay by far the highest prices in the world for prescription drugs,” he was aiming. But his “10 times” number is off. While this comparison may be accurate for some individual drugs or drug classes—and he softened his comment by saying “in some cases”—it inflates the overall price differences, which are generally higher here but not 10 times as high as those in the rest. the countries. the world.

A well-known exception is insulin: the price in the United States has been shown to be 10 times higher than in other countries.

But even this determination is complicated. Studies showing insulin drug prices up to ten times higher refer to manufacturer prices, which do not take discounts into account. But this is a misleading comparison because most people don’t actually pay manufacturers’ prices.

Sanders’ statement certainly contains elements of truth but it also does not provide all the necessary information or context. We rate it half right.