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Is there an end to high drug costs in the U.S.?

Medically reviewed by Drugs.com. Last updated on Feb 21, 2025.

It’s no secret that drug costs for people in the U.S are anywhere from two to six times higher than other parts of the world. But why is this, and is it possible to bring costs down, which, by the way, rose again this new year.

Firstly, it is important to acknowledge that there is no single person or company to blame for the current high drug costs. In fact, everybody contributes negatively to drug costs in some way or another. This includes the patient, insurance companies, employers who offer a medical benefit that includes drug coverage, stockholders, legislators, and, of course, the pharmaceutical industry. Cost increases in one area have a flow-on effect in other areas. While big organizations chase the money, the person who benefits the least is the patient.

Countries with much less dysfunctional systems include Australia, Norway, Sweden, and the United Kingdom. All have government policies to lower drug costs, including limiting the profitability of drugs, reference pricing, and promoting the uptake of generics. While this benefits the majority of people living in these countries, there are downsides; most notably for people with rare conditions, whose medicine may not be funded or even available.

From a financial perspective, the impact on global pharmaceutical revenues would be substantial if the U.S were to adopt price regulations like other countries because the U.S. comprises such a massive share of the global revenue. Alternatively, trying to get other countries to increase what they pay for drugs is also difficult to enact, because, well, they can choose to behave individually.

Unfortunately, high drug costs in the U.S. are a complicated problem with no easy or quick solution.

Posted February 2019

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