Drug price dichotomy

It’s a common belief that Americans pay significantly more than other countries for the same drugs. A new analysis shows that’s true for brand-name drugs, but the reverse is true for generic drugs. An important difference because generics account for 90% of US prescription volume. Unbranded generics were on average only 67% of the prices in comparison countries, where on average only 41% of prescription volume is unbranded generics. US prices for brand-name drugs remained 308% of prices in other countries even after adjusting to account for rebates paid by drug companies to US payers and their pharmacy benefit managers. Compared to a similar analysis using 2018 data, the gap between US and other countries’ prices widened slightly because of faster growth in US prices and a change in the drug mix.

Source: Rand Health Quarterly, June 2024.