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Policy discussion surrounding U.S. prescription drug prices focuses on whether prices in the United States are too high or appropriate relative to the benefits that they offer to patients.

-- Systematic comparisons of drug prices among countries are based on data from a broad set of drugs, and, unlike comparisons of drug spending among countries, they focus narrowly on differences in prices absent the influences of different volumes and mixes of drugs.
-- Price indexes are an effective way to focus on prices alone without the risk of interference from other variables—in this case, differences in drug volume share or mix. Calculations in this report are based on 2018 data comparing prescription drug prices in the United States with those in 32 comparison countries.
-- Along with overall price comparisons, researchers focused on subsets of brand-name originator drugs, unbranded generic drugs, biologics, and nonbiologic drugs.

Prices in the United States are higher than those in all comparison countries

-- U.S. prices were 256 percent of those in the 32 comparison countries combined. In comparisons with individual countries, U.S. prices ranged from 170 percent of prices in Mexico to 779 percent of prices in Turkey.
-- The gap between U.S. prices and prices in other countries was larger for brand-name originator drugs.
-- U.S. prices were 84 percent of prices in all non-U.S. countries for unbranded generics.
-- U.S. prices were 190 percent of prices in other countries after adjusting U.S. prices downward to account for rebates and other discounts.

The United States spends more on prescription drugs on a per capita basis than other countries in the Organisation for Economic Co-operation and Development (OECD). Understanding the extent to which drug prices are higher in the United States than in other countries—after accounting for differences in the volume and mix of drugs—is useful when developing and targeting policies to address both growth in drug spending and the financial impact of prescription drugs on consumers. Although several prior studies systematically compared drug prices in the United States with those in other countries, the most recent of these studies used data that are almost a decade old.

In this report, we (1) describe the use of price indices as a tool to compare drug prices between countries, (2) list the methodological decisions required to calculate price indices, (3) summarize prior studies in terms of their methodologies and results, and (4) present results from a new comparison of 2018 drug prices in the United States with those in 32 OECD countries. We also calculate and compare prices for several subsets of drugs using different methodological steps and assumptions in sensitivity analyses.  

Our results are described in detail in the main report. In brief, when analyzing data for all prescription drugs available in the United States and comparison countries, we found that U.S. prices for drugs in 2018 were 256 percent of those in the 32 OECD comparison countries combined. U.S. prices were even higher than those in comparison countries for brand-name originator drugs (with U.S. prices at 344 percent of those in comparison countries) but were lower, on average, than those in comparison countries for unbranded generic drugs (with U.S. prices at 84 percent of those in comparison countries). Unbranded generics represent 84 percent of volume in the United States, compared with 35 percent of volume for the other OECD countries in the study. Although different methodological decisions and assumptions did change the magnitude of results, we found a consistent pattern of considerably higher overall drug prices in the United States than in the comparison OECD countries.

This report describes how price indices are used to compare prescription drug prices between countries, summarizes findings related to international prescription drug price comparisons presented in prior studies, and presents new price comparisons that are based on 2018 data. The overall result from the new price comparison is then compared with narrower analyses on specific categories of drugs, such as brand-name originator drugs, unbranded generic drugs, biologics, and nonbiologic drugs. The report also presents results from sensitivity analyses using different methodological steps and assumptions, such as prices and volume aggregated at different levels and volume weights calculated in different ways.  

This research was conducted in late 2019 and was funded by the U.S. Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation under Contract Number HHSP23320095649WC-TO38 and carried out within the Payment, Cost, and Coverage Program in RAND Health Care.  

Publication notice: https://aspe.hhs.gov/reports/international-prescription-drug-price-comparisons
Report (71 pages): https://aspe.hhs.gov/sites/default/files/documents/ca08ebf0d93dbc0faf270f35bbecf28b/international-prescription-drug-price-comparisons.pdf

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