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 two to four 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 two to four 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.