A case where bigger isn’t better – Americans’ Rx spending vs. the rest of the world

January 19, 2017

America’s per capita spending in prescription drugs is more than double the average of our peers and the highest in the world. In 2013, per capita spending was $858 for the U.S. and $400 for 19 other industrialized nations, including France, Canada, Japan, Germany and Iceland. Those figures come from an August 2016 report by the Journal for the American Medical Association.

This map illustrates the differences among several countries, with Iceland at the low end at $304 per capita, to Canada, which comes in second to the U.S., at $647 per person.


The JAMA report finds that drug prices are higher in the United States because “the U.S. health care system allows manufacturers to set their own price for a given product,” whereas countries with nationalized health care negotiate with drug makers for lower costs.

Further, the report contends that market forces fail to effectively drive down prices over time, in part, because of obstacles to competition. Patent laws give drug makers market exclusivity for years – even decades —  while backlogs and regulatory hurdles delay the approval and sale of generic drugs.

What can you do if your prescription drug costs are sky high? Voices for Affordable Health offers five ways to lower your costs here.