U.S. Pays More Than Most Nations For Prescription Drug As Prices Continue Rising

The price of prescription drugs continues to rise and a new study finds the U.S. pays more than most nations.

Bonnie Arnold suffers from powerful migraine headaches. "I call them shotgun migraines because it feels like I got shot in the head," she says. Adding to that pain is the price of the prescription she needs to take. Arnold says, "they told me it was going to be $600, just for that month's supply."

Her story is common. The RAND Corporation analyzed prescription costs in 33 nations including the U.S. and found prices in America are 256% higher on average. "The U.S. is the only country out of all of the, all of those that we looked at where drug companies have free reign to set drug prices," says RAND Senior Policy Researcher Andrew W. Mulcahy.

Mulcahy says other countries negotiate with drug makers, but many U.S. government programs can't do that. "Medicare's prohibited by law to negotiate drug prices," he says.

Another analysis by 46brooklyn Research finds major pharmaceutical companies are raising prices on more than 500 drugs this year, a 4.6% increase overall. Many of those are brand name drugs that companies have exclusive rights to make as opposed to generics, which is one area that is working in the U.S.

RAND found America actually pays less for generic drugs than other countries. "The U.S. back in the 80s set up a framework to allow robust generic competition. It's succeeded wildly," Mulcahy says.

There are efforts to also bring down the cost of brand name drugs. When President Trump was in office, he signed executive orders to lower some prices. The Biden administration is looking at legislation to cap price increases and allow Americans to buy prescriptions from other countries.