In 2015, Americans spent $1,200 per capita on prescription medications, the highest rate in the world. In the U.S. a 30-day prescription to Xarelto (used to treat blood clots) costs $292, on average – where that same prescription costs just $126 in the UK, $102 in Switzerland, and just $48 in South Africa, according to a 2016 survey by the International Federation of Health Plans. A 28-day supply of Humira, used for Crohn’s disease and rheumatoid arthritis, costs a whopping $2,669 in the US – but just $822 in Switzerland and $1,362 in the UK.
Just why are prescription drug prices so high in the U.S compared to other countries? There are four main reasons.
- No single-payer negotiation. The U.S. doesn’t negotiate prices with pharmaceutical manufacturers like other countries do. In countries where there is single-payer healthcare—in other words where the government pays for most health care costs—those governments have huge negotiating power with pharmaceutical companies to lower prices. In the U.S., a patchwork of private insurers and smaller government programs negotiate prices with drugmakers individually, reducing their bargaining power.
- Little governmental regulation. In many other countries, governments regulate how much a medication can cost. For example, Canada’s Patented Medicine Prices Review Board (PMPRB) requires that a new medication cannot cost more than the median price of the drug in other countries. Countries in the European Union use similar pricing constraints. The U.S. does not impose similar rules, and therefore pharmaceutical companies set the prices for medications at their will, usually the peak of what they think the market will withstand. This leads to high prices, especially for innovative or unique drugs.
- Prices are rising faster than inflation. Pharmaceutical companies not only set the prices for new drugs when they hit the market, they increase the prices of existing drugs too. According to AARP, in 2015, prices for a sample of 268 widely used brand name drugs increased by 15.5%, compared to an inflation rate of less than 1%. Especially for older brand-name drugs and even generics, dramatic increases can occur. Several instances of astronomical price increases have made the news recently, such as EpiPen and Daraprim.
- Lack of research comparing drugs. A recent study in the Journal of the American Medical Association pinpointed the lack of comparative research across drugs as yet another cause for higher drug spending among Americans. While most doctors are sensitive to the fact that their patients want to avoid high drug prices, their primary goal is to treat patients effectively. It is often easy to find medical research about the efficacy of particular drugs, but there is less research comparing brand-name drugs against each other. Without that research, prescribers may be hesitant to prescribe a cheaper drug that they are less familiar with.
If drug prices are making a dent in your wallet, there are ways to save:
- Ask your doctor about cheaper options: Especially once generic versions of drugs are available, there may be less expensive choices out there.
- Use a GoodRx coupon: GoodRx helps you compare drug prices at various pharmacies and provides coupons for the lowest prices for many drugs. Independent researchers found that GoodRx is the best discount service for finding the lowest price.
- Make sure your insurance covers your medication, or go for a different one: Your insurance may not cover a particular drug, but usually it will cover another option for your condition.
- Manufacturer assistance programs or coupons can lower prices: If you’re purchasing a brand name drug, pharmaceutical companies often offer coupons or patient assistance programs. GoodRx highlights manufacturer coupons in the savings tips sections of our drug pages.
- Purchase a 90-day supply: Purchasing a larger supply of your medication can cut costs, as long as you clear it with your insurer. In order to fill a 90-day supply, you need a new prescription from your healthcare provider.
- Cut higher dose pills in half: Sometimes filling a higher dose prescription and cutting pills in half can save money. You’ll need to contact your doctor to get a new prescription and make sure that’s a safe option.
- Use a mail-order pharmacy: Private insurance and Medicare may offer discounts if you fill your prescriptions through their mail-order pharmacies, especially for generic drugs.
- Use an online pharmacy, with caution: Online pharmacies can provide good deals, but be wary of the “too good to be true” offers in the wilds of the internet. Follow these tips to make sure you’re dealing with a reputable online pharmacy.
Special note: Considering crossing the border for your medications? Just know that it is illegal to import pharmaceuticals even for personal use.
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