Linking US drug prices to those in other nations could halve costs, study finds

Prices for brand-name drugs in particular are higher in the USA compared with other high-income countries, most of which regulate drug prices. However, inconsistent availability of data on net prices (ie, prices after rebates and other discounts) complicates international comparisons of drug prices, according to new research.

Linking the cost of prescription drugs in the USA to the prices paid in other high-income countries could have reduced American spending for the drugs by at least half in 2020, according to a new RAND Corporation  study.

Modeling a proposal that would cap US prices at 120% of what is paid in six other nations, researchers found that such a move would have cut US spending on insulins and 50 top brand-name drugs by 52% during 2020 – a savings of $83.5 billion. These savings are on top of already-lower US “net” prices after rebates negotiated between drug firms and insurers.