That headline may seem unbelievable, but it’s true.

Our latest Unleash Prosperity study from Senior Fellow Tomas Philipson and two of his University of Chicago colleagues finds that even though other rich countries free-ride off of American consumers and pay less for new brand name drugs, most foreigners actually pay more than we do overall because they have access to fewer generics and they pay more for generics than we do.

This finding has huge implications for the Trump administration’s efforts to end foreign free-riding, as the authors explain:

The U.S. pattern supports both affordability and innovation by combining aggressive generic pricing with value-based pricing for brands. While the U.S. accounts for less than 25% of global GDP, it generates about 75% of global pharmaceutical profits, effectively subsidizing R&D for the rest of the world.

Foreign countries suppress branded prices while protecting generic drugs from competition, leading to higher system-wide costs.

Our findings suggest that adopting American-style reforms – higher brand prices with more competitive generic markets – could reduce free riding without increasing total drug spending abroad. Exporting the U.S. model through the trade agreement offers a viable solution.