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

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Yves here. I’m running this piece mainly as an example of “fact checking” as a vehicle for attacking individuals and groups outside the mainstream.

This article establishes that what Bernie Sanders said about drug price is accurate: “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.” The article did not dispute the contention that Americans pay more for drugs that patients anywhere else in the world. But the story straw manned Sanders, as you can see in the headline, by depicting Sanders as depicting US drug prices as generally ten times higher than those of other countries, when he said no such thing.

This chart is from 2019 but is confirms that drug prices in the US are vastly higher than those that promote affordability, I assume in large measure due to tough government bargaining:

By Michelle Andrews, a contributing writer and former columnist for KFF Health News who has also been published by the New York Times, Money, Fortune Small Business, National Geographic and Women’s Health magazines, among others. She worked previously for worked for U.S. News & World Report and SmartMoney magazines. Originally published by KFF Health News and PolitiFact

Sen. Bernie Sanders (I-Vt.), whether in Congress or as a presidential candidate, has always taken strong positionsagainst 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.

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.

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  1. Joe Well

    While volunteering for the Sanders campaign on a low level at some events in New Hampshire, I witnessed a couple interactions with media people whose hostility was palpable. One, IIRC an AP photographer, actually scolded another volunteer in an elevator when he misinterpreted something he said. The gist of it was, the guy thought that Sanders-people were insufficiently appreciative of the media. I got the feeling that he was used to being appreciated and not questioned.

    Re: US drug prices, they can be very, very cheap for generics, significantly cheaper than in Mexico, at least, but of course that’s not what the Senator was talking about.

  2. The Rev Kev

    This article is like when you go to visit Google News and down near the bottom they have a section called ‘Fact check From independent sources’ where they will check a news article. And when it is one that skates far too close to the truth like one called ‘Photo of Biden was altered to suggest he touched a child inappropriately’, they might label it as ‘Needs Context’ or if it is really bad, they will say that they are still researching it. The fact is that if the prices for drugs in the US were reasonable, then why are so many Americans going to Mexico and Canada for drugs?

  3. Jeff

    Bernie sanders is a single player tease. He’s not committed to this policy but loves talking about it, pointing his crooked finger at others who don’t but has no interest at doing the work to make it happen. His endorsement of Biden validated all that is wrong with Sanders. Just another stooge fundraising off of people’s frustrations with corrupt government systems.

    1. Piotr Berman

      Perhaps Sanders concluded that Democratic Party is a doomed project, so to finish it off in the most expeditious manner, let them select the worst candidate possible. That being accomplished, DNC added a bizarre choice for vice-. Amazingly, the hapless duo was elected, but re-election is problematic at best. (Of course, the alternative explanation is that Sander is a sheep or a sheepdog, herded to the “party consensus”. Leverage takeover principle is to corral sheepdogs first, train them, the herd the sheep.)

      1. PCM

        If Sanders were ever serious about trying to deliver Medicare for All — instead of using it con progressives out of money and volunteer work only to deliver them to the establishment Democratic candidate — he would have taken up Jill Stein’s invitation to headline the Green Party ticket when the Hillary campaign and the DNC cheated him out of the Democratic nomination in 2016. So far as I can tell, he’s been a Judas goat ever since his second congressional run in Vermont, when he cut a deal with the Democrats not to run a spoiler against him.

        I think the last member of Congress who genuinely wanted to pass Medicare for All was Dennis Kucinich, and Obama apparently had enough leverage on him to make him vote for the Patient Protection Racket and Unaffordable Care Act of 2010. (Kucinich was the last, showstopping holdout and he buckled.)

        As for recent crops of Congressional Progressive Caucus reps, not a single one of them was willing to extort a floor vote on Medicare for All out of Nancy Pelosi as a condition of reelecting her Speaker — ostensibly because losing an initial floor vote would “set the movement back” and not because it would force everyone to go on record in front of their constituents and donors.

        Anyway, the next time you hear a Democrat claim how passionately they believe in Medicare for All, treat it the same as if they were promising every child in America a killer dirt bike and a pony. Even if they do believe in it deep, deep inside, they’re too terrified of a de facto criminal syndicate (“Big Health”) that makes over $1.25 trillion a year in price-gouging and middleman skim alone to attempt to actually fight for it. And the only way to overcome that is to make them more terrified of us than they are of Big Health, and to make Big Health more terrified of us than of losing their world-class-ripoff protection and extortion rackets. I’ll leave it to your imagination to picture what that’s going to take.

        1. Yves Smith Post author

          You are either wildly misinformed, or a Green, or both. The Greens are a joke of a party, internally divided and dysfunctional. It’s not a platform for anything. Sanders could have run as an independent but recognized 1. that merely getting on the ballot in 50 states would take a huge amount of effort that would come out of the same kitty as general campaigning and 2. an independent or Green candidate would get zero attention from the mainstream media and would never break out of low single digit votes.

          Look at how RFJ, Jr. who is polling extremely well v. Biden now, universes better than Sanders did when he started in 2016, has the Kennedy brand going for him, and knows he has zero chance of becoming the Dem candidate due to superdelegates and the Dems refusing to allow debates, is insisting on running as a Dem, not as third party candidate. That should tell you everything you need to know about the viability of your Green scheme.

          I am sick and tired of Sanders bashing. He was and is an independent senator from a small state. Individual Senators have little power save for getting pothole issues in their state addressed. You appear to operate under the delusion that Sanders could perform miracles. Get a grip. Your whining that he could not meet your elevated expectations is your issue, not his. This country will never move to any single payer system. Look at how Medicare is being privatized, FFS. So stop wishing for unicorns and being angry that Sanders won’t enable your pet desires.

          1. bernie

            I actually believe, especially now, that a 3rd party is viable, as long as the leadership is genuine.

            Sanders appeared genuine, but i don’t think many believe he was, at this point.
            Kucinich wouldn’t have voted for increased weaponry to Ukraine, or supported war efforts. Nor advocating for such 100% swamp creatures like Clinton or Biden.

            Had Sanders been genuine, i think, a switch to the Greenies , might have attracted an awful lot of us disaffected voters. Most had no choice in the previous elections. We can’t even have have the League of Women voters run the debates anymore. Sanders just didn[‘t have conviction. Thats apparent now.

            I recall, when Perot gave Americans an alternative. He garnered, i believe, 20% of the vote. And times are a lot worse now.

            Whatever the 3rd party is, its important its ESTABLISHED, and it needs leadership and a genuine leader. A Debs-like character. I don’t know if Kennedy is a Henry Wallace or not. But if he is really interested in change, he will jump ship and give people a choice. The democrats are a sinking ship. JMO

    2. Jorge

      Assuming that he did not want to give up and retire, what else should he have done instead?

  4. BeliTsari

    Poynter Institute style libertarian “fact-checking” scams, kinda took over many of the journalistic, non-conforming lefty blog-aggregators Bezos’ Prop’RNot & Google destroyed ProPublica, Intercept, CounterPunch & CommonDreams, right as COVID, China & Ukraine needed to be obfuscated, lied & gaslit for Lincoln Project, CAP, CFR, Atlantic Council & United Democracy Project told us who we could install to feed on PASC indentured gig-serfs? If you try to investigate, online. You’re sent TO the libertarian website’s page? The notion that we’d been able to inform our choices about COVID in ’20 & find SOME truth about Biden’s war to save fracking, in 2022 and NOW, you can’t even BUY shit, anywhere but Amazon & 3-4 billionaires’ totally BS agitprop machines have ALL our UWS Manhattan neighbors stumbling around like “Dawn of the Dead” meets “They Live,” reciting blatant, utter falsehood, they’ve been informed they believe, unquestioned.

  5. East Dadeville

    The Kaiser Family Foundation is a U.S. non-profit organization. The self-identified non-partisan KFF grew out of the Kaiser Family Foundation but is no longer a foundation, It conducts research, polling and engages in public health information campaigns. It is a site identified as promoting up to date information on health policy.

    On Friday, May 19th, KFF Health News using Politifact. a self-identified “fact-checking” outfit 1) correctly quoted Senator Bernie Sanders’ statement, made on CNN last month, ““We pay by far the highest prices in the world for prescription drugs, in some cases [emphasis added]10 times more than the people of any other country,” and correctly reports that 2) “[w]hen Sanders said that Americans “pay by far the highest prices in the world for prescription drugs,” he was on target, but 3) Sanders “. . . 10 times more” [related to insulin prices] figure is off. ” netting Sanders the HFF-Health News-Politifact judgement that he has uttered a half-truth [emphasis added]”. They note, “. . . [M]ost people don’t actually pay manufacturer prices.”

    In terms of KFF Health News-Politifact, what are we to make of listed manufactured prices? Because of the number of drugs such companies offer with manufactured price information that is far more widely inaccurate or in Politifact Truth-O-Meter terms, outright falsehoods, this significantly overshadows the Senator’s “10 times greater” claim, highlighting Yves criticism of the nature and use of today’s “fact checking” aggression.

    Given that drug manufacturers have an army of workers pricing, promoting and selling drugs, many through other corporate intermediaries, a U.S. senator such as Sanders has by comparison a very small staff to monitor things like a variety of studies cited in the KFF Health-News-Politfact piece as well as other areas of legislative concern, it appears to be a David-Goliath face-off. And KFF Health News-Politifact by omission sides with Goliath.

    For market-focused devotees, price is considered to contain critical information for buyers, consumers and the like. But clearly in the case of drug manufacturers, the manufacturer price doesn’t provide the requisite information. And for end users, some of whom are voters, they have no individual bargaining power. Instead there are a bevy of private and public intermediaries whose contribution to drug price determination is often very obscure. And relying on a by no means unified array of contesting professional managerial class experts to enlighten doesn’t have a remarkable record of penetrating and correcting the high noise-to-information ratio of the current “information age.” How to penetrate this is left up to sites like Naked Capitalism, their attentive readers, some of who may promote creative oppositional strategies.

    1. Laura in So Cal

      I also wonder how much of drug costs are associated with using newer more expensive drugs that may or may not be better than older and cheaper drugs. All the drug advertising on tv encourages a certain type of person to ask for the new drugs by name from their doctor. I’m apparently odd in my own personal rule of thumb that I won’t touch a drug, medical treatment, vaccine, etc unless it has been available for at least 10 years.

  6. Jeremy Grimm

    Though comparison of drug prices between the u.s. and other nations is starkly telling of the remarkable gouging Big Pharma inflicts on the u.s. public — I think it were well to also look at the size and number of profit margins between the production of drugs and their delivery to a patient. Even if u.s. prices were 10 times less than prices in other nations I believe those prices might still be far too high based on old-fashioned notions of a ‘reasonable’ margin of profit. How much does it cost ot make and distribute a given drug? How much is rentier profit for a newly patented drug — considering the extent that the u.s. government pays for or heavily subsidizes much of the basic science that goes into drug discovery and development. How much payola, advertising, and marketing money is spent to push a drug whose efficacy and associated side-effects fall far short of obviating the utility of that new drug. And to my thinking — most damning — why are drugs treated as if they were best created and allocated by a Market when every principle of old-school economics argues that goods like medicines and services like medical care are not commodities which should ever be allocated by a Market?

  7. Carla

    The first header in this article is a dead giveaway: “It’s complicated.”


    Kaiser Health News and everyone associated with them should be ashamed of this dreck.

    On the other hand, I have sadly and reluctantly come to agree with Jeff’s comment that Bernie’s “endorsement of Biden validated all that is wrong with Sanders. Just another stooge fundraising off of people’s frustrations with corrupt government systems.”

  8. Skk

    I’ve given up proselytizing about this. I have a Medicare Part D prescription plan chosen carefully. While some pills, eg metformin, lisinopril are indeed $0, others like brilinta, farxiga, kerendia, xxxx cost over $500 per month each ( until one gets past the donut hole ).So I just get them from India at, yup, a 1/10 of the cost. I remind myself of the character from Catch22, but Orr.

  9. Piotr Berman

    The chart from 2019 is a textbook example of misleading the public with manipulation of the y axis. Y is the deviation from the median price, and the scale starts at -200%. As some of you may know, prices are not likely to drop lower than 100% of the median, negative prices occur here and there, e.g. in spot markets of natural gas, but they hardly occur with medications. A more natural choice would be to have X axis at -100%, i.e. zero price, and guiding horizontal line at 0, i.e. median price, and yet better it would be to display price divided by the median. When you look at the aggregate of “branded and generic drugs”, USA is at 400% of the median, while 4 countries seem to be at 20-60%, so prices in USA are at least six time higher. As this is reflected differently for different medical formulae, there should be galore of 10-fold differences.

    What it shows is that competition on the drug market is artificially reduced in USA, and to a lesser degree, in UK too. Once the competition is artificially reduced, companies deploy “non-price” tricks to gouge the consumers and their insurance plans. I experienced one such trick personally, and another by comparing Epipen prices in Poland and USA.

    My personal experience is with acyclovir that I need occasionally, and because of herpes simplex outbreaks, however rare, I keep in my medicine drawer. Few years ago I neglected to sign for medication coverage and I had a need for acyclovir as I got an outbreak and the tube in the drawer was very much out of date. I used out of date ointment and requested a prescription. To my surprise, the prescription was for 15 g of ointment and even with CVS discount (quite hefty!) it was 50 dollars. As the out of date ointment showed effect, I asked the nurse of my doctor to change the prescription to 5 g of cream that was available. Kaboom! the price, with the discount and generic, was 200 dollars. Mind you, “outbreak” consists of several sores on a small area, goes away in few days if medicated, it is VERY HARD to use all 5 g in two years, i.e. before the tube is out of date.

    I did web research about prices in Poland. 5 g tube of acyclovir cream costs 4 dollars, over-the-counter. BTW, the producer is a tiny cosmetics company making “natural” beauty products. Inert components in a cream are the same in a beauty cream and medicated cream, the technology of making the cream is the same, and the requirements of purity and sterility are the same. But it seems that a company like that has no chance in US market.

    Currently, by mail order you can get 15 g tube for 20 dollars in USA, but so the price ratio SEEMS to be 20/12 = 1.66, but since one needs 5 g only, it is 5.

    Few year ago, the price of Epipen was doubled to 300 dollars. In similar web comparison check in Poland, it was 75 dollars there NOT COVERED BY INSURANCE. What was covered were pre-packaged syringes with pre-dosed epinephrin for 16 dollars (you need pairs in both cases). Epipen is a gadget that contains pre-dosed syringe with epinephrin that you stick to your thigh and press the button. A Polish person not willing to shell 75 dollars would need to unrap the syringe, jab into his/her thigh and press, something that 95-99% of the population can easily do. Mind you, in all those cases, the cost of epinephrin in a dose is 1 dollar. Thus you have appearance of US price being “only” four times higher while (at the time) it is actually 19 times higher.

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