Many international drug price comparisons conclude that the U.S. has the highest prescription prices in the world. However, these studies typically focused only on brand-name drugs, which represent just 7% of prescription sales volume in the U.S. This analysis evaluates whether the U.S. truly has higher drug prices by examining both brand-name and generic drugs across six developed countries: the U.S., Canada, Germany, the United Kingdom, France, and Japan.

We compare the volume-weighted average prescription net prices in the public sectors of the sampled countries. The analysis found that the U.S. public-sector prescription net prices are 18% lower on average than those in the peer countries. This challenges the common viewpoint that the U.S. drug prices are universally higher. We found that this outcome is driven by three key factors in the U.S.: the strong negotiating power of public programs, the large volume of generic drugs, and the low price of generic drugs..