Prescription Drug Prices
A recently released study by the Rand Corporation compared 2018 prescription drug prices in the United States to prices internationally. The findings indicated that U.S. prices were 256% higher than the other 32 comparison countries which make up the Organization for Economic Co-operation and Development (OECD). The one exception was unbranded generic drugs, for which U.S. prices were 85% higher than comparative countries. In comparison to individual countries, U.S. prices ranged from 170% higher than prices in Mexico to 779% higher than prices in Turkey. This gap between U.S. prices and comparative countries was largest for brand-name drugs.
Even after adjusting prices downward to account for discounts, which are negotiated between insurance companies and pharmacies, charges for brand-name drugs in the U.S. are still substantially higher than for those in the other countries.The U.S. accounted for 58% of the $795 billion spent on prescription drugs among the OECD nations in 2018, while making up just 24% of the drugs used. Drug spending nationally increased 76% between 2000 and 2018 and is expected to increase even faster over the next decade as new, more expensive specialty drugs are approved.
According to the Congressional Budget Office the U.S. government spent $796.2 billion on Medicare in 2019 and $97.1 billion of that was attributed to prescription drugs. In the short term it doesn’t look like any relief will be coming any time soon. When you combine a divided Congress and an antagonistic atmosphere, with a pharmaceutical industry that will emerge from the COVID pandemic looking like a hero for their fast action in developing vaccines there appears to be little appetite within the Administration or Congressional leadership to take on the pharmaceutical industry at this time.