Top 60 U.S. Brand Name Drug Prices 75% Lower Internationally, According to Rand Corporation Study

Written by Gabriel Levitt, MA | Posted February 05, 2021 | Updated February 16, 2023

The Rand Corporation has released an impressive study showing that brand name drugs cost far more in the United States than in other countries – on average 344% more. For those of you looking for a methodologically strong analysis of international drug prices and a history of related studies, this is the report for you. In looking at all drugs, brand and generic, the percentage goes down to 256%. That’s because, as the report shows, generic drugs in the U.S. were found to be priced at 86% of those in other countries. The report was based on drug prices from 2018.

The report’s title is very descriptive of its contents: “International Prescription Drug Price Comparisons: Current Empirical Estimates and Comparisons with Previous Studies”

Explaining the report’s approach in the simplest terms: it accomplishes its main objectives by creating price indices for 32 member countries of the Organisation for Economic Cooperation and Development (OECD) and comparing them for all drugs, brand name and generic. That’s the report’s main focus. It has additional results for other categories, notably biologic drugs and the top 60 drugs in terms of sales. For biologics, which are generally the most expensive prescription products, U.S. prices are on average 295% the international price. For the top 60 drugs by sales, U.S prices are on average 394% higher.

Using some simple math, let’s turn these numbers into percentage savings figures that Americans, who are angry about high drug prices, want to know about. The average savings for brands is 71%; for all drugs (brand and generic), the savings is 61%; for generics, 19% (because U.S. generics are usually cheaper); the average savings for biologics is 66%; and, for the top 60 drugs by sales, 75%.

Rand Corporation – United States vs. International Drug Prices

Category of Analysis U.S. Premium International Savings
Brand Drugs 344% 71%
Overall 256% 61%
Generic Drugs 84% -19%
Biologics 295% 66%
Top 60 Drugs by Sales 394% 75%

It’s that last figure to which I turn my attention now. A key research point of the report is that it is the first substantive, methodologically rigorous analysis of international drug price comparisons in ten years. In short, this deep dive is long overdue. I agree, but other reports in the interim have shown strikingly if not identical results:

In 2019, the Congressional House Ways and Means Committee released a report comparing U.S. prices to those in 11 high-income countries and found that the average savings was 75%! The Committee report looked at the top 79 drugs by sales sold in Medicare. The top 60 drugs by sales category from the Rand report were likely included among these 79 drugs. Those were based on ex-factory prices, meaning the prices charged by drug manufacturers paid by wholesalers, for example.

PharmacyChecker.com looked at online retail prices for those drugs included in the Committee’s reports that are available for sale through retail mail order internationally and found the average potential savings were 72%.

The pharmaceutical industry flacks have already criticized this report for using drug company list prices, which do not include the rebates provided to third parties, most notably pharmacy benefit managers, referred to as net prices. Big Pharma thinks that’s not fair! Here’s a retort. The report actually DOES address net prices and includes an estimate of the price differentials based on additional analysis. Compared to net prices for brand name drugs U.S. prices are still 230% higher than the average of OECD countries. That’s without doing similar adjustments for net prices in any of the other countries. Furthermore, there are about 35 million uninsured and tens of millions more underinsured Americans who are potentially subject to the list price without rebates, so let’s stop pretending that list prices don’t matter.

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Sylvia S.on Nov 6, 2022

I apologize to be writing on the review page
I am a pensioner, from South Africa. I'm looking for the best price for Xarelto. The state hospital prescribed Warfarin. I am totally allergic to warfarin

Please can you advise which is affordable to a pensioner.

Regards

Date of experience: November 6, 2022

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Date of experience: October 15, 2021

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Date of experience: December 9, 2020

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Date of experience: December 8, 2020

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I feel safe ordering from a pharmaceutical company outside of the U S because the prescription I am using is exactly the same as those sold in the U S, however, the price is totally different. What I had paid in the U S for 90 pills listed at almost $500. For which I have been paying $72. From a Canadian company for 5 or 6 years now, the price includes shipping and is sometimes negotiable.

Date of experience: December 7, 2020

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I am happy to see the entities that are endorsed by you. But I did have a horrendous experience with Canadian Pharmacy with my latest order. After switching the location from which my order was to be chipped, the order was and still is being held by US Customs. They did give me a replacement order which I finally did receive but that order was submitted MUCH later than it should have been. Bottom line, I waited OVER THREE MONTHS for my med to finally be delivered and that cost me more money to piece meal samples from my doc and out of pocket for short term needs. And, the order I did receive cost me MORE for FEWER tablets. I know Covid-19 played a part in this fiasco but the supplier simply DID NOT PREFORM!

Date of experience: August 19, 2020

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