Are US Prescription Drug Prices 10 Times Those of Other Nations? Only Sometimes

Are US Prescription Drug Prices 10 Times Those of Other Nations? Only Sometimes

“We pay by far the highest prices in the world for prescription drugs, in some cases 10 times more than the people of any other country.”

Sen. Bernie Sanders (I-Vt.), in an April 30, 2023, interview on CNN’s “State of the Union”

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

It’s therefore not surprising that the senator would, during a recent Sunday morning TV interview, rail against high drug prices in the United States and compare what Americans pay with what people in other countries must fork over.

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

After all, it is a popular political talking point. But 10 times as much? That was a bit of a head-snapper. We decided to check it out.

A Complicated Market

We first asked the senator’s office for the documents to support Sanders’ claims. But our repeated requests went unacknowledged.

So, we started digging around on our own. What we found was that, as expected, Sanders was right in asserting that drug prices in the United States generally exceed those in other countries. The magnitude of the difference, however, varies depending on the drugs and the countries included in the comparison, among other factors.

And no matter how the studies we examined sliced the data, the drug price difference almost never reached Sanders’ stated level. Still, experts told us his point has merit. “I think the quote is on target, if a bit vague in scope,” said Andrew Mulcahy, a senior health economist at the Rand Corp., a global policy think tank.

Take, for example, the oft-cited 2021 study by Rand that found, based on 2018 figures, drug prices in the U.S. were on average 2.56 times the drug prices in 32 other Organization for Economic Cooperation and Development countries. These are mostly high-income, developed nations. For brand-name drugs, the gap was even bigger: Americans paid 3.44 times the prices for those drugs, on average. But the opposite was true for generic drugs, for which Americans paid just 84% of what people in other countries studied paid. One exception: Turkey. U.S. drug prices were nearly eight times those in Turkey overall, and 10.5 times those for brand-name drugs.

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

The manufacturer price, though, is not necessarily the best measure — especially if the idea is to capture what consumers are paying.

That’s because it doesn’t reflect the rebates and other discounts negotiated by insurers and pharmacy benefit managers that can lower a drug’s retail price. Most people with health insurance are paying prices that include these discounts. The Rand researchers used the manufacturer price, though, because the discounts are confidential and it’s hard to quantify how they affect net prices, the report noted.

Other studies have found smaller — though still significant — gaps than Sanders cited. 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, commissioned by Sanders himself, found that retail prices were more than 2 to 4 times what they were in the U.S.

Another analysis, this one by the Peterson-KFF Health System Tracker, compared the prices of seven brand-name drugs in the U.S., Germany, the Netherlands, and the United Kingdom, and likewise found that some U.S. prices were roughly 2 to 4 times as high as those in other countries. But for other drugs the gap was smaller.

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

Because the United States doesn’t 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 by health plans and $164 that people spent out-of-pocket, according to a KFF analysis of OECD data. Spending by comparable countries was $552 per capita, including $466 by health plans and $88 in out-of-pocket spending by individuals.

Experts added, though, that price is only one element that affects overall prescription drug spending.

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

And Then There Is Insulin

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

Such statistics have triggered a somewhat partisan rallying cry to address drug costs. The price of insulin has been the subject of congressional hearings, including one this month convened by Sanders.

Meanwhile, capping insulin costs at $35 a month for Medicare recipients was a signature win for President Joe Biden in the Inflation Reduction Act. Members of Congress, Sanders among them, want to slash insulin prices further. In a press release announcing a bill he introduced with Rep. Cori Bush (D-Mo.) that would prohibit manufacturers from charging more than $20 per vial of insulin, Sanders said, “There is no reason why Americans should pay the highest prices in the world for insulin — in some cases, ten times as much as people in other countries.”

Our Ruling

When Sanders said that Americans “pay by far the highest prices in the world for prescription drugs,” he was on target. But his “10 times more” figure is off. Though that comparison may be accurate for some individual drugs or classes of drugs — and he did temper his comment by saying “in some cases” — it exaggerates overall differences in prices, which are generally higher here but not 10 times those in the rest of the world.

A well-known exception is insulin: The price in the U.S. has been shown to be 10 times as high as in other countries.

But even this determination is complicated. Studies that showed a tenfold spread in prices for insulin drugs referred to manufacturer prices, which don’t take discounts into account. But that’s a misleading comparison because most people don’t actually pay manufacturer prices.

Sanders’ statement certainly contains elements of truth but also doesn’t provide all the necessary information or context. We rate it Half True.

sources:

Friends of Bernie Sanders, Bernie Sanders on the Issues, accessed May 8, 2023

Sen. Bernie Sanders, “Bernie Sanders In Line to Chair Influential Senate Committee on Health, Education and Labor,” Nov. 17, 2022

Rand Corp., “Prescription Drug Prices in the United States Are 2.56 Times Those in Other Countries,” Jan. 28, 2021

Rand Corp., “Comparing Insulin Prices in the U.S. to Other Countries,” September 2020

JAMA, “Estimated Savings From International Reference Pricing for Prescription Drugs,” Sept. 10, 2021

Government Accountability Office, “Prescription Drugs: U.S. Prices for Selected Brand Drugs Were Higher on Average Than Prices in Australia, Canada, and France,” March 29, 2021

Sen. Bernie Sanders, “News: New GAO Study Finds U.S. Pays Two to Four Times More for Prescription Drugs Than Other Nations,” April 28, 2021

Peterson-KFF Health System Tracker, “How Do Prescription Drug Costs in the United States Compare to Other Countries?” Feb. 8, 2022

Senate Committee on Health, Education, Labor and Pensions, “News: Sanders and Cassidy Announce Bipartisan Deal to Lower Prescription Drug Prices,” April 25, 2023

Sen. Bernie Sanders, “News: Following Successful Public Pressure Campaign to Lower the Cost of Eli Lilly’s Insulin, Sanders and Bush Introduce Bill to Finish the Job and Cap the Price at $20 per Vial,” March 9, 2023

Senate Committee on Health, Education, Labor and Pensions, “Full Committee Hearing: The Need to Make Insulin Affordable for All Americans,” accessed May 8, 2023

Stat, “Disagreements and Digs Upend an Otherwise Bipartisan Hearing on PBM Reform,” May 2, 2023

Health Care Cost Institute, International Health Cost Comparison Report, July 2022

Interviews with Andrew Mulcahy, senior policy researcher at the Rand Corp., May 5 and 10, 2023

Interviews with Cynthia Cox, vice president and director of the Program on the ACA at KFF and director of the Peterson-KFF Health System Tracker Project, May 5 and 9, 2023

Interview with Lovisa Gustafsson, vice president at the Commonwealth Fund, May 5, 2023

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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