Drug prices in the US are nearly five times higher than in similarly developed countries, according to a new study.
Researchers looked at 10 drugs that were just negotiated by US government officials to bring down the cost for older Americans with arthritis, psoriasis, leukemia, heart failure and diabetes.
Aside from insulin, all the drugs studied remained more expensive in the US than in the UK, Germany, Australia, Switzerland, Canada and France.
For example Jardiance, a diabetes drug made by German-based company Boehringer Ingelheim, cost $197 per month in the US which is 4.8 times higher than the cost in Australia.
These findings come after the Biden Administration’s Inflation Reduction Act gave Medicare – the government’s health program for seniors – the power to negotiate drug prices with pharmaceutical companies. They officially started that program earlier this year with the ten drugs analyzed in the new study.
Dr Jared Ross, the president of Emergency Medical Services, Education & Consulting, told DailyMail.com the findings showed that this move was largely ‘symbolic.’
Dr Ross said: ‘I think everyone knew that this wasn’t going to have major impacts, but this was so that we could show both from the politician side as well as from pharma side that they were trying to to change this, or at least giving the outward impression of changing it.’
Of the ten prescriptions studied, at least three are manufactured by US companies, yet aren’t any cheaper for US consumers.
This includes Xarelto, which is manufactured by Johnson and Johnson to treat Type 2 diabetes; Eliquis, which is manufactured by Bristol Myers Squibb and Pfizer to treat Atrial fibrillation; and Enbrel which is manufactured by Amgen to treat rheumatoid arthritis.
Vivek Ramaswamy, a republican politician recently tapped by President Elect Donald Trump to co-head the Department of Government Efficiency, recently pinned the problem of extortionate drug prices in the US on bureaucracy at the FDA.
He said the organization ‘erects unnecessary barriers’ and requires more testing of drugs from other nations, which ‘stops patients from accessing promising therapies’ and raises costs.
Dr Ross agreed that the time it takes to bring a drug to market can contribute to its cost, but claimed the issue is more complex than that.
In other countries, they also have stricter patent regulations, price controls and a stronger willingness to negotiate drug prices. These factors keep drug prices lower, he said.
In the US, without these controls, Dr Ross said companies are able to price their drugs with less oversight, and consumers have to pay the price that is listed when there is only one option for treatment on the market.
Dr Ross added: ‘What we don’t have is we don’t we don’t have a free market, and the [drug] negotiations were an attempt at an appearance of free market.’
All these add together to create a significant difference in US healthcare compared to other countries.
Even after adjusting for inflation, spending on prescription drugs has steadily increased in the country since 1960s. Medical debt is the number one reason for bankruptcy in the country.
Ramaswamy is set to run Department of Government Efficiency alongside businessman Elon Musk under President Elect Trump
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Researchers from the London School of Economics and Political Science led the study, though it also included contributors from US schools.
Their results were published in the Journal of the American Medical Association.
They gathered data on US drug prices from the Centers for Medicare and Medicaid Services (CMS) and the other countries using a database from a company called IQVIA, which tracks life sciences industry data.
The study focused on newly negotiated drug prices created by the Inflation Reduction Act.
The IRA added a stipulation that asked Medicare to set upper limits on the price of common prescription drugs.
After setting a ceiling, they’re also able to negotiate the prices of drugs based on how they compare to alternatives.
CMS officials started with ten drugs, and published their findings in August 2024.
These included Stelara, Enbrel, Entresto, Imbruvica, Eliquis, Xarelto, Jardiance, Januvia, Farxiga and NovoLog/Fiasp.
The renegotiation caused the maximum price to decrease by as much as 42 percent.
Stelara, an injection that treats Crohn disease, psoriasis and ulcerative colitis, will cost about $4695 per 30 days of treatments in the US.
In Australia, the cost is about 250 percent less – representing $1341 for 30 days of treatments. In the UK it costs $1291.
Enbrel, an injection that treats rheumatoid arthritis costs about $2355 per 30 days of treatments. By comparison, it costs about $754 in Australia and $851 in the UK.
Jardianace, a blood-sugar lowering drug that treats Type 2 diabetes costs about $197 per 30 days of treatments.
That’s a 488 percent increase from Australia where the drug costs $33 and a 316 percent increase from the UK where the drug costs $50.93.
Jardiance is a drug that works to lower blood sugar, and is helpful in managing some of the symptoms of Type 2 diabetes. With the new negotiations, it costs about $197 per month in the US, compared to $50 in Germany and $67 in Canada.
The only drug that was set near, or lower, than other countries in price was NovoLog/Fiasp, an insulin drug used in managing diabetes. Last year, the price of the drug was capped after widespread complaints over price gouging.
In the US, a one month supply of the drug is $8.96, compared to $5.44 in Australia, $7.38 in the UK and $11.09 in Germany.
Though the study authors noted that drug prices were still consistently higher in the US, they said: ‘The gap between US and non-US prices narrowed for all drugs.’
Still, Dr Eric Arzubi, the ZEO of Frontier Psychiatry, told DM.com, the changes made in the new CMS negotiations aren’t significant enough.
He said: ‘While the study shows an average decrease in US drug prices, they remain up to 4 times higher compared to those from other industrialized countries. I’m not sure we can call that a win.’
In order to drive drug prices down in the US, he said, the government would need to be more willing to negotiate with companies to drive down prices – for everything from drugs to dialysis care.
Dr Ross said: ‘Unfortunately, and for better or for worse, we have a healthcare system and a healthcare mentality in the US, where no price is is too expensive for care.’
In addition, more strictly enforcing patent laws could encourage more drugs to enter the market, driving the price down of original formulations and making prescriptions more affordable overall.
Finally, in other countries, he said, they utilize price controls, which the US largely lacks.
