U.S. Insulin Prices Nine Times Higher Than Other Wealthy Nations

Pharmaceutical Information

Author: RAND Corporation
Published: 2024/02/01
Publication Type: Reports and Proceedings - Peer-Reviewed: Yes
Contents: Summary - Introduction - Main - Related

Synopsis: Gross price of insulin in the U.S. is over 9 times higher than 33 high-income comparison nations and prescription drug prices are 2.78 times higher. Insulin prices in the U.S. have been increasing for many years and are substantially higher than in other middle and high-income nations. Insulin is a drug most commonly used to control blood sugar levels in people who have insulin-dependent diabetes.

Introduction

Study 1: Insulin Prices in U.S. Are Nine Times Higher Than In Other Wealthy Nations

The gross price of insulin in the U.S. is more than nine times higher than in 33 high-income comparison nations, depending on type of insulin, some U.S. prices can be even higher, according to a new RAND report.

Main Digest

Although the cost differences of insulin between the U.S. and other nations varied depending on the comparison country and the type of insulin, U.S. prices were always higher - often five to 10 times higher - than those in other countries. The new report updates findings from earlier RAND work about U.S. insulin prices.

After accounting for rebates and other discounts often offered by drug manufacturers, the price of a unit of insulin remained 2.3 times higher in the U.S. than in comparison nations, according to the study.

"Insulin prices in the U.S. have been increasing for many years and are substantially higher than in other middle and high-income nations," said Andrew Mulcahy, the study's lead author and a senior health economist at RAND, a nonprofit research organization.

Insulin is a drug most commonly used to control blood sugar levels in people who have insulin-dependent diabetes. The drug is sold in many different forms, with different chemical properties and different duration of effects.

Insulin list prices in the United States have increased dramatically since the early 2010s. For example, one federal analysis found that the average U.S. wholesale-acquisition price for rapid-acting, long-acting, and short-acting insulin increased by 15% to 17% per year from 2012 to 2016.

Medicare enrollees' financial exposure to out-of-pocket spending for insulin is changing dramatically. Under the Inflation Reduction Act, insulin cost-sharing will be capped at $35 per month beginning in 2024. Congress also is considering proposals to extend the cap to individuals with employer or individual market coverage.

RAND researchers compiled their estimates of international insulin prices by examining industry standard IQVIA MIDAS data on insulin sales and volume for 2017 through 2022, comparing the U.S. to 33 nations that belong to the Organisation for Economic Co-operation and Development (OECD).

The analysis presents separate comparisons using manufacturer gross prices, which may be more relevant to U.S. patients without drug coverage or otherwise paying out of pocket for insulin, and estimated manufacturer net prices after applying rebates paid by manufacturers.

The report presents volume and sales by type of insulin separately for the United States and 33 comparison OECD countries.

Researchers found that U.S. manufacturer gross prices per 100 international units of insulin were on average 9.71 times those in OECD comparison countries combined. After estimating gross-to-net discounts for insulins, U.S. net prices remained 2.33 times of those in comparison countries combined.

U.S. manufacturer gross prices ranged from 4.57 times those in Mexico to 37.99 times those in Turkey. Comparisons of U.S. insulin prices to prices in other countries were fairly constant from 2017 through 2022.

Study 2: US Prescription Drug Prices Are 2.78 Times Those In Other Wealthy Nations

Prescription drug prices in the U.S. are significantly higher than in other nations, with prices in the U.S. averaging 2.78 times those seen in 33 other nations, according to a new RAND report.

The gap between prices in the U.S. and other countries is even larger for brand-named drugs, with U.S. prices averaging 4.22 times those in comparison nations.

The RAND study found that prices for unbranded generic drugs - which account for 90% of prescription volume in the U.S. - are about 67% of the average cost in the comparison nations.

The new report updates findings from earlier RAND analysis about U.S. drug prices. That analysis compared 2018 manufacturer gross drug prices in the U.S. with other nations using a price index approach.

The new report uses updated information through 2022. It also includes additional analysis that focuses on price comparisons for biosimilars and changes in price comparison results over time.

"These findings provide further evidence that manufacturers' gross prices for prescription drugs are higher in the U.S. than in comparison countries," said Andrew Mulcahy, lead author of the study and a senior health economist at RAND, a nonprofit research organization. "We find that the gap is widening for name-brand drugs, while U.S. prices for generic drugs are now proportionally lower than our earlier analysis found."

The RAND analysis provides the most up-to-date estimates of how much higher drug prices are in the U.S. compared to other countries in the Organisation for Economic Co-operation and Development (OECD).

Researchers calculated price indexes under a wide range of methodological decisions. While some sensitivity analyses lowered the differences between U.S. prices compared to those in other nations, under all the scenarios examined overall prescription drug prices remained substantially higher in the U.S.

The analysis used manufacturer gross prices for drugs because net prices -- the amounts ultimately retained by manufacturers after negotiated rebates and other discounts are applied -- are not systematically available. Even after adjusting U.S. prices downward to account for these discounts, U.S. prices for brand name drugs remained more than three times higher than those in other countries.

RAND researchers compiled their estimates by examining industry standard IQVIA MIDAS data on drug sales and volume for 2022, comparing the U.S. to 33 OECD nations. The data include most prescription drugs sold in the U.S. and comparison countries.

Across all 33 comparison countries, U.S. drug prices ranged from 1.72 times the prices in Mexico to 10.28 times prices in Turkey.

Researchers estimated that across all of the OECD nations studied, total drug spending was $989 billion in 2022. The U.S. accounted for 62% of sales, but just 24% of the volume.

Recent estimates are that prescription drug spending in the U.S. accounts for more than 10% of all health care spending. Retail prescription drug spending in the U.S. increased by 91% between 2000 and 2020, and that spending is expected to increase by 5% annually through 2030.

Study 1 - About the Insulin Prices in US Are Nine Times Higher Than In Other Wealthy Nations Study

The study was sponsored by the Office of the Assistant Secretary for Planning and Evaluation in the U.S. Department of Health and Human Services.

The report, "Comparing Insulin Prices in the United States to Other Countries: Results from a Price Index Analysis," is available on the website of the U.S. Department of Health and Human Services. Other authors of the report are Daniel Schwam and Nate Edenfield.

Study 2 - About the US Prescription Drug Prices Are 2.78 Times Those In Other Wealthy Nations Study

The study was sponsored by the Office of the Assistant Secretary for Planning and Evaluation in the U.S. Department of Health and Human Services.

The report, "International Prescription Drug Price Comparisons Estimates: Using 2022 Data," is available on the website of the U.S. Department of Health and Human Services and on www.rand.org Other authors of the report are Daniel Schwam and Susan L. Lovejoy.

RAND Health Care promotes healthier societies by improving health care systems in the United States and other countries.

List of Generic Equivalents for Brand Name Drugs

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This peer reviewed publication was selected for publishing by the editors of Disabled World due to its significant relevance to the disability community. Originally authored by RAND Corporation, and published on 2024/02/01, the content may have been edited for style, clarity, or brevity. For further details or clarifications, RAND Corporation can be contacted at rand.org. NOTE: Disabled World does not provide any warranties or endorsements related to this article.

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