Why the U.S. Still Pays Twice as Much for Prescription Drugs

The U.S. government has taken a major step by negotiating drug prices under the Inflation Reduction Act, aiming to reduce the costs for people on Medicare. However, a recent review by Reuters reveals that even with these negotiations, Medicare will still pay at least twice as much as other high-income countries, including Sweden, Australia and Canada for the same medications.

For example, in 2026, a 30-day supply of the diabetes drug Farxiga will cost those on Medicare $179, while people in Sweden pay just $35.

“In the U.S. we’ve always accepted that we are the country that overpays relative to the rest of the world,” Stacie Dusetzina, professor of health policy at Nashville’s Vanderbilt University, told Reuters.

This discrepancy highlights the complex pricing system in the U.S., where pharmaceutical companies often raise prices annually. Unlike other countries with centralized systems for negotiating drug prices, the U.S. has historically allowed drugmakers to set higher prices due to market demand and competition.

Experts note that although the U.S. pays more, it often gains earlier access to new treatments, as was the case with COVID-19 vaccines. Yet, critics argue that the U.S. system disproportionately affects patients who rely on expensive medications for chronic conditions.

More drugs will undergo price negotiations each year, potentially leading to greater savings for Medicare beneficiaries. But for now, the gap between U.S. and international drug prices remains.

Have you or a loved one faced high prescription medication costs? Share your experience with us!