Prescription Drug Prices Around the World

If you walk into a pharmacy in Boston, Berlin, or Toronto with the same prescription in your hand, you won’t pay the same price. In some places, your insurer picks up almost everything. In others, you’ll face a deductible, percentage-based coinsurance, and maybe a surprise bill at the register.

This article looks at what people actually pay for prescription drugs around the world — focusing on retail pharmacy prices and out-of-pocket costs — and why the same pill can have wildly different price tags depending on where you live.

We’ll look at:

• How researchers compare drug prices internationally

• Which countries spend the most on medicines

• How big the U.S. price gap really is

• Concrete examples of pharmacy prices across borders

• How cost-sharing rules change what patients pay

• The policy tools countries use (and the reforms underway)

1. How do you even compare prescription drug prices across countries?

Before we dive into numbers, it’s worth pausing on methodology, because comparing drug prices is surprisingly messy.

1.1 List prices vs. what the system actually pays

There are several “prices” for any one drug:

• List price / wholesale acquisition cost (WAC) – a catalog price set by manufacturers; often the highest number.

• Invoice / gross price – what a wholesaler or large buyer pays the manufacturer.

• Net price – what the manufacturer actually keeps after confidential rebates and discounts.

• Pharmacy claim price – the amount initially paid to the pharmacy, before clawbacks/rebates.

• Patient out-of-pocket – co-pays, coinsurance, or full price if uninsured.

Most international comparisons rely on manufacturer list or invoice prices, because net prices and rebates are usually secret. A major 2024 RAND analysis used 2022 IQVIA data on manufacturer prices across 34 countries, and then adjusted U.S. prices downward in sensitivity analyses to approximate net prices — but even then, the U.S. remained substantially higher.

1.2 Retail vs hospital drugs

This article focuses on retail pharmaceuticals — the medicines you pick up at a community pharmacy. In OECD countries, retail drugs account for about one-sixth of all health spending and are the third largest category after inpatient and outpatient services.

High-cost cancer infusions and many biologics dispensed in hospitals are increasingly important, but they’re often billed through hospital budgets rather than retail pharmacies and are trickier to compare.

1.3 Currencies, PPP, and “per capita”

Researchers usually standardize prices in two ways:

• Currency & PPP – convert to U.S. dollars and adjust for differences in purchasing power parity (PPP), so $1“buys” roughly the same real basket of goods in each country.

• Per-capita spending – total retail drug spending divided by population, which captures both prices and how much people use medicines.

On top of that, price-index methods (like those used by RAND) fix a common “basket” of drugs to isolate price differences from differences in the mix of drugs used.

With that context in mind, we can start asking: who pays the most?

2. Who spends the most on medicines?

On a per-person basis, the United States is firmly at the top of the pack.

According to the OECD’s Health at a Glance 2025, average per-capita spending on retail pharmaceuticals across OECD countries was USD 766 (PPP-adjusted) in 2023. The U.S. was way above that.

Table 1 – Retail pharmaceutical spending per person, 2023 (PPP-adjusted)

Source: OECD Health Statistics 2025. Figures are PPP-adjusted and reflect net spending on retail pharmaceuticals (including wholesale/retail margins and VAT).

A few takeaways:

• The U.S. spends more than double the OECD average on retail drugs per person and over four times Denmark’s level.

• Other high spenders like Germany and Switzerland are still far below U.S. levels, despite universal coverage and tighter price controls.

• Lower-spending countries (Denmark, Chile, Estonia) may shift more medicines to hospital budgets or restrict coverage, which partly explains their lower retail totals.

Per-capita spending also combines prices and utilization. So the next question is: how much of this gap is about higher prices?

3. How much more do U.S. patients pay for medicines?

3.1 The 2.78× headline gap

The updated RAND analysis using 2022 data found that across all prescription drugs:

• U.S. prices averaged 2.78 times the prices in 33 comparison countries. 

In other words, for every $1 other high-income countries pay for a given basket of drugs, the U.S. system pays about $2.78.

The gap is not uniform:

• For brand-name drugs, U.S. prices were estimated at about 4.2 times those in peer countries, even before adjusting for rebates.

• For unbranded generics, U.S. prices are actually lower — about 33% less than in other countries on average.

This neatly captures the U.S. paradox: America is very good at making generics cheap and widely used, but brand-name drugs are dramatically more expensive, and that’s where most spending is.

In the U.S.:

• ~90% of prescriptions filled are generics,

• but they account for only about one-fifth (~20%) of total drug spending.

Brand-name and specialty drugs are the budget-busters.

3.2 Per-capita spending: U.S. vs peers

Looking at overall spending in 2019 (latest comparable year at the time), a Peterson–KFF analysis found that:

• The U.S. spent $1,126 per person on prescription medicines,

• Comparable high-income countries spent $552 per person on average.

Both insurer payments and out-of-pocket spending per capita were higher in the U.S. than in any peer country. 

3.3 A concrete blockbuster example: Ozempic

For headline drugs like Ozempic (semaglutide), price gaps are striking. A 2025 summary of international Ozempic prices drawing on Peterson–KFF data reported that as of 2023:

• A monthly Ozempic prescription cost about $936 in the U.S.

• The same medicine cost around $83 in France.

That’s more than 11 times higher on the U.S. list price basis – a huge difference for patients facing coinsurance or no coverage.

4. Real-world pharmacy receipts: U.S. vs Canadian prices

While the RAND and OECD work focus on system-level prices, it’s also useful to look at what individual patients see at the pharmacy counter.

One illustrative (if imperfect) source is cross-border online pharmacies that advertise their prices alongside “average U.S. price” comparisons. CanadaDrugsDirect, a licensed Canadian mail-order pharmacy, publishes a small table comparing its listed prices to estimated U.S. retail prices for selected brand-name drugs.

These are not official national averages, but they do align with broader findings: brand-name drugs are often several times cheaper in Canada than in the U.S.

Table 2 – Sample advertised prices: Canada online vs average U.S. retail (US$)

* Saving = (U.S. price – Canadian listed price); percentages are approximate.

*Source: CanadaDrugsDirect price comparison table, accessed 2026. Prices shown in U.S. dollars and may reflect promotional pricing; “U.S. price” column is that site’s estimate of average retail prices at U.S. pharmacies.

Again, these examples are not a comprehensive sample. They focus on expensive branded drugs where cross-border savings are large. But the pattern is consistent with more rigorous research: U.S. brand-name drugs are often several times more expensive than those in Canada and other OECD countries. 

5. Sticker price vs. patient price: what do people actually pay?

List and invoice prices tell you what the system pays, not what the person at the counter pays. Out-of-pocket spending depends on:

• Insurance coverage (public, private, none)

• Benefit design (deductibles, co-pays vs coinsurance)

• Price caps and safety nets

• Whether the drug is on a “preferred list” or special tier

5.1 Out-of-pocket spending in the U.S.

In the U.S.:

• In 2019, per-capita out-of-pocket spending on prescribed medicines was about $164, with insurers paying another $963 per person — both the highest among peer countries.

• A 2025 KFF poll found that about 21% of U.S. adults said they did not fill a prescription in the past year because of cost, and about 15% said they cut pills in half or skipped doses due to cost.

Cost-related non-adherence is especially common among people with lower incomes. In a Commonwealth Fund international survey of adults with lower income, about 50% of U.S. respondents said they skipped needed medical care or prescriptions due to cost, versus just 12–15% in Germany, the U.K., Norway, and France.

5.2 Older adults: U.S. vs other high-income countries

For older adults, who use more medicines:

• A 2024 Commonwealth Fund survey found older Americans were more likely than peers in other high-income countries to spend $2,000+ out-of-pocket on health care in a year, and more likely to report skipping care due to cost.

• In most surveyed countries, less than 5% of older adults reported skipping prescription medicines due to cost, but U.S. older adults did so at roughly double that rate.

Zooming out, IQVIA estimated that Americans spent about $98 billion out-of-pocket on prescription drugs in 2024, a 25% increase over five years, even as average prescription prices themselves remained relatively flat.

5.3 How other countries shield patients

Most high-income countries expose patients to some cost sharing, but with tighter protections:

• Across OECD countries, governments and compulsory insurance fund around 60% of retail pharmaceutical spending, with households directly paying most of the rest. In France and Germany, public schemes cover more than 80% of retail drugs.

• In England, most outpatient prescriptions are subject to a flat per-prescription charge — but around 90% of prescriptions are actually exempt (for children, older adults, those with low income or certain chronic conditions) and there is an annual cap on drug copayments.

• In Norway, copayments for pharmaceuticals can exceed $50 per prescription, but annual out-of-pocket costs for covered services (including drugs) are capped at around $260 (in U.S. dollar terms at the time of the study).

• In Germany, there is a cap on total health-care out-of-pocket spending (including drugs) at 1–2% of household income, with many drugs free of charge for certain groups.

• In Canada, most public and private drug plans require some cost sharing, but many provinces use income-based caps for catastrophic cost protection.

The big contrast is that U.S. plans — especially for people under 65 — often combine high deductibles, tiered formularies, and coinsurance (a percentage of the drug’s price). For expensive specialty drugs, a 20% coinsurance on a $1,000 medication is $200 every month; in a country with a flat €10 co-pay and an annual cap, the same medicine might be effectively free after a certain point.

6. Why are prices and out-of-pocket costs so different?

Broadly speaking, international differences come from:

1. How countries regulate and negotiate prices

2. How they reward innovation

3. How they design cost-sharing rules for patients

6.1 Price regulation and negotiation

Many high-income countries use some combination of:

• External reference pricing – benchmark to prices in other countries; often set a ceiling price based on the lowest or average price in a reference basket.

• Health technology assessment (HTA) – agencies like NICE (U.K.) or IQWiG (Germany) evaluate cost-effectiveness and clinical value and recommend a price range or decide whether a drug is covered at all.

• National or single-purchaser negotiation – a central authority (or a small number of large payers) negotiates with manufacturers, often leveraging the threat of not listing a drug.

• Mandatory discounts and clawbacks – automatic rebates if sales exceed certain levels or if drug prices rise faster than inflation.

These tools tend to compress price variation and keep brand-name prices lower.

The U.S. is historically different:

• Multiple private and public payers each negotiate separately.

• Until recently, Medicare (the largest public purchaser) was barred from negotiating prices directly for outpatient drugs.

• There has been no nationwide reference pricing or single price-control framework.

That’s starting to change (see Section 7), but the legacy is a system where brand-name prices are much freer to rise, with manufacturers setting launch prices and increasing them annually.

6.2 Market structure and generics

Generics and biosimilars are where the U.S. looks relatively good:

• U.S. generic competition tends to be intense once patents and exclusivities expire, driving generic prices down.

• The high U.S. “generic fill rate” (around 90% of prescriptions) helps offset some costs — but, as noted, cannot overcome the huge gap in brand-name prices.

In some countries, generics are less aggressively discounted, but brand-name prices are more tightly constrained from the start. The result: less dramatic generic savings, but also fewer extreme brand-name price spikes.

6.3 Benefit design and cost-sharing

Different countries use cost sharing for different reasons:

• To discourage unnecessary use (economic “skin in the game”)

• To shift some costs from public budgets to individuals

• To target subsidies toward poorer or sicker patients

But there’s a key design question: flat co-pays vs percentage coinsurance, and whether there’s a cap.

• Flat co-pays (e.g., €5 per prescription) make patient costs predictable and decouple patient price from drug list price, especially if caps or exemptions apply.

• Coinsurance ties patient costs directly to list prices, which is why a U.S. patient can feel every percentage increase in the sticker price.

International evidence suggests that carefully designed, capped co-payments can modestly reduce unnecessary use without causing major harm, whereas high, uncapped coinsurance and deductibles more often lead to skipped medicines and worse outcomes, particularly among lower-income patients.

7. International benchmarking comes to U.S. policy

One of the biggest trends of the last few years is the explicit use of international prices as a benchmark for U.S. drug payment — something that used to be politically off-limits.

Recent developments include:

• Inflation Reduction Act (IRA, 2022) – gave Medicare authority to negotiate prices for a growing list of high-spend drugs. Analyses of the first 10 drugs selected show U.S. list prices are about three times higher than in peer countries, leaving room for substantial negotiated reductions.

• Medicare drug price negotiations and Ozempic – Medicare has now negotiated lower prices for a first wave of 15 high-cost drugs, with price cuts between 38% and 85%, and a new Medicare price for Ozempic near $274 per month, down from a prior list price close to $1,000.

• CMS pilot programs using international benchmarks – new pilot programs (GLOBE and GUARD) will benchmark Medicare payments for certain Part B and Part D drugs to prices in economically similar countries, with the explicit goal of cutting older adults’ out-of-pocket costs.

• Medicaid “Generous Model” – a new U.S. initiative allows states to pay no more than the price of selected peer countries (e.g., the U.K., France, Germany, Canada, Japan) for some drugs, in exchange for standardized coverage terms and extra manufacturer rebates.

• Most-favored-nation style targets – federal policy has set “most-favored-nation” pricing targets, basing U.S. prices on the lowest price in a basket of OECD countries with similar GDP per capita, at least for some high-cost brand-name drugs without competition.

At the same time, manufacturers are warning that aggressive international referencing could reduce incentives for innovation and may lead them to delay launches or demand higher prices in other countries to avoid undercutting the U.S. market — a concern already surfacing in parts of Europe.

Still, the overall direction is clear: international price benchmarks are becoming part of the U.S. toolkit, bringing its policy environment closer to what many other countries have used for years.

8. What does all this mean for patients?

From a patient’s perspective, three overlapping realities matter:

1. System-level prices – how much the health system pays for medicines.

2. Insurance design – how that spending is split between public budgets, insurers, and individuals.

3. Household finances – what a missed prescription actually means for health and well-being.

A few practical implications:

• In the U.S., high list prices for brand-name drugs mean coinsurance can be punishing, especially for people with chronic conditions or on multiple branded therapies.

• In many other OECD countries, more aggressive price regulation and annual caps on out-of-pocket expenses shield patients from these extremes, though sometimes at the cost of slower access to new drugs or tighter coverage rules.

• Even in wealthy countries, low-income patients are vulnerable: surveys consistently show much higher rates of cost-related non-adherence in low-income groups, particularly in the U.S., Australia, Canada, and New Zealand.

From a policy perspective, the international comparisons suggest that:

• Brand-name prices, not generic prices or unusually high use, are the main driver of U.S. spending differentials.

• Net prices matter – but even when U.S. prices are adjusted for rebates, they remain substantially higher than peers in most analyses.

• Benefit design is policy – caps on annual drug out-of-pocket spending, smarter cost-sharing for high-value medicines, and income-based protections make a big difference to what patients see at the till.

9. Bottom line

International comparisons of prescription drug prices can get technical fast — PPP adjustments, price indexes, gross vs net prices, and sector splits. But behind the jargon is a remarkably simple story:

• The U.S. pays far more for prescription drugs than other high-income countries, especially for brand-name medicines.

• Patients in the U.S. face higher out-of-pocket costs and are more likely to skip medications because of price.

• Other countries typically combine tougher price regulation, central negotiation, and explicit out-of-pocket caps, which translate into lower prices at the pharmacy counter.

• Recent U.S. reforms are starting to import those ideas — especially international benchmarking — but the system is still in transition.

For patients, what matters most is whether they can afford to fill the prescription their clinician writes. International data make one thing clear: policy choices about pricing and cost sharing show up directly at the pharmacy counter, in real people’s decisions to fill, split, or skip their medicines.