--- title: This Is Why the U.S. Pays More for Prescription Drugs Than Other Countries description: Americans often pay more for prescription drugs than citizens of much richer countries, according to a Wall Street Journal investigation. authors: - name: Denver Nicks url: https://money.com/author/denver-nicks/ at_money_since: 2015 articles: 60 covers: - Personal Finance - Banking - Business - Career Advice - Credit Cards - Economy and Politics - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Pets - Retirement - Shopping - Taxes social: - https://x.com/DenverNicks - https://plus.google.com/105122198911201917932 former_staff: true published: '2015-12-01T15:20:41.000Z' modified: '2015-12-01T15:20:41.000Z' section: Personal Finance tags: - doctors - Drugs - health insurance - Healthcare - Medicare - norway - Pharma - pharmaceutical - pubdesk word_count: 313 canonical: https://money.com/prescription-drug-prices-america/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![186651237](https://img.money.com/2015/12/186651237.jpg) With multiple stakeholders, closely guarded trade secrets, and confidential rebates at play, the costs of pharmaceutical drugs in the U.S. are notoriously difficult to pin down. But what’s clear is that Americans usually pay far higher prices than patients in other advanced countries. The [*Wall Street Journal*](http://www.wsj.com/articles/why-the-u-s-pays-more-than-other-countries-for-drugs-1448939481) compared prices for 40 top branded drugs in Norway, England, and Ontario, Canada with the prices for the same drugs covered by Medicare Part B in the U.S., for which prices are made public. Prices in the U.S. were higher than prices in Norway for 93% of the drugs surveyed. Prices were higher in the U.S. than in England for all but one drug surveyed. In Ontario, prices were lower than in the U.S. for 28 or the drugs surveyed, while U.S. prices were higher for only two drugs (not all drugs are covered by all plans). Much of the considerable difference in pricing from country to country is the result of the bargaining power of big, state-run health insurance systems, like Norway’s, compared to the relatively weaker bargaining position of American doctor’s and health insurance systems. America's Medicare, for instance, is barred by law from negotiating drug pricing. Healthcare systems in other countries are also more willing to set hard price caps on drugs and to deny coverage for drugs deemed insufficiently cost effective. As a result of the substantially inflated prices for drugs in the U.S., Americans effectively subsidize research and development for new drugs worldwide, but that’s not all. Americans also pay for pharmaceutical firms’ large budgets for consumer advertising, which is not allowed in Europe, reports the *Journal*. Higher American prices also account in part for the fact that big pharma firms tend to be very profitable enterprises—pharma and biotech firms in the S&P 1500 earn an average profit margin more than twice the average for all companies in the index. \[[WSJ](http://www.wsj.com/articles/why-the-u-s-pays-more-than-other-countries-for-drugs-1448939481)\] ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/prescription-drug-prices-america/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Personal Finance", "item": "https://money.com/personal-finance/" }, { "@type": "ListItem", "position": 3, "name": "Expenses", "item": "https://money.com/expenses/" }, { "@type": "ListItem", "position": 4, "name": "This Is Why the U.S. Pays More for Prescription Drugs Than Other Countries" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/prescription-drug-prices-america/#webpage", "url": "https://money.com/prescription-drug-prices-america/", "name": "This Is Why the U.S. Pays More for Prescription Drugs Than Other Countries", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2015-12-01T15:20:41.000Z", "mainEntity": { "@id": "https://money.com/prescription-drug-prices-america/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/prescription-drug-prices-america/#breadcrumb" }, "dateModified": "2015-12-01T15:20:41.000Z" }, { "@type": "Article", "headline": "This Is Why the U.S. Pays More for Prescription Drugs Than Other Countries", "articleSection": "Personal Finance", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2015/12/186651237.jpg", "width": 498, "height": 345, "caption": "186651237" } ], "author": [ { "@type": "Person", "name": "Denver Nicks", "url": "https://money.com/author/denver-nicks/", "@id": "https://money.com/author/denver-nicks/#author", "image": "https://img.money.com/2012/09/09_1165862081.jpg?quality=85&w=640&h=640&crop=1", "sameAs": [ "https://x.com/DenverNicks", "https://plus.google.com/105122198911201917932" ] } ], "publisher": "https://money.com/#organization", "datePublished": "2015-12-01T15:20:41.000Z", "description": "Americans often pay more for prescription drugs than citizens of much richer countries, according to a Wall Street Journal investigation.", "abstract": "Americans often pay more for prescription drugs than citizens of much richer countries, according to a Wall Street Journal investigation.", "@id": "https://money.com/prescription-drug-prices-america/", "inLanguage": "en-US", "dateModified": "2015-12-01T15:20:41.000Z", "wordCount": 313, "keywords": [ "doctors", "Drugs", "health insurance", "Healthcare", "Medicare", "norway", "Pharma", "pharmaceutical", "pubdesk" ], "about": [ { "@type": "Thing", "name": "Personal finance", "sameAs": [ "https://en.wikipedia.org/wiki/Personal_finance" ] }, { "@type": "Thing", "name": "Expense", "sameAs": [ "https://en.wikipedia.org/wiki/Expense" ] } ] } ] } ```