U.S. drug prices remain the world’s highest despite bipartisan efforts to reduce costs, revealing systemic challenges and entrenched industry practices.
At a Glance
- Americans pay up to 3 times more for prescription drugs than citizens in countries like France
- The Trump and Biden administrations have both introduced measures to cap prices and expand Medicare negotiation
- Pharmacy Benefit Managers (PBMs) face growing scrutiny for obscuring real drug costs
- International reference pricing and PBM reform are among leading policy proposals
- Fragmented U.S. healthcare system limits negotiating power compared to single-payer systems abroad
Prescription Pain: A National Burden
Americans are routinely charged the world’s highest prices for prescription drugs, with some medications costing up to $798 in the U.S. compared to $67 in France, according to the Commonwealth Fund. This staggering price gap has become a rare point of bipartisan consensus in Washington, with both the Trump and Biden administrations pushing for reform. Yet, despite high-profile efforts, costs for consumers remain largely unchanged.
Watch a report: Why Americans Pay More for Prescription Drugs.
Former President Donald Trump signed multiple executive orders, including a “Most Favored Nation” policy that sought to tie U.S. prices to the lowest rates available in other developed countries. He also piloted an insulin cap program and mandated that Medicare rebates benefit patients directly. Meanwhile, President Joe Biden’s Inflation Reduction Act of 2022 marked a watershed by giving Medicare the authority to negotiate drug prices for the first time.
Transparency and Turf Wars
A key barrier to meaningful reform lies in the opaque practices of Pharmacy Benefit Managers (PBMs)—middlemen that negotiate drug prices on behalf of insurers but whose rebate structures often remain hidden from the public. These entities have been accused of distorting prices and pocketing savings meant for consumers. Senator Chuck Grassley has introduced bipartisan legislation demanding greater PBM transparency.
Calls to regulate PBMs have intensified alongside broader efforts to restructure the supply chain. “Pharma executives are on Capitol Hill today. They should be asked 1 question. Why do Americans pay, on average, 2.5 times more for the same prescription drugs than people in other countries?” tweeted public policy advocate Charles Rotter.
Lessons from Abroad
Countries like France, Canada, and Australia keep drug prices low through centralized price negotiations and strict value assessments. These systems are not without drawbacks—some experience slower access to new drugs and occasional shortages—but they underscore the power of unified bargaining.
Still, the U.S. remains structurally different. Its fragmented healthcare landscape, dominated by a mix of private insurers and limited federal negotiation, gives drugmakers more leverage. Expanding Medicare’s negotiating authority and establishing international reference pricing are among the proposals currently gaining bipartisan traction.
BREAKING: President Trump just signed an Executive Order that “will substantially reduce prescription drug prices… [by tying costs] to what other countries pay.”
Path to Reform
Experts argue that solving the drug pricing crisis will require more than isolated policy wins. Proposals include:
- Expanding Medicare negotiations beyond the limited list authorized under current law
- Requiring PBM transparency to expose hidden rebates and kickbacks
- Evaluating the entire drug supply chain to uncover profit bottlenecks
- Implementing reference pricing, pegging U.S. costs to an international average
As momentum builds, one fact is undeniable: the current system is failing American patients. With pharmaceutical innovation thriving, the challenge remains ensuring that its benefits are affordable and accessible to all—not just to those who can pay top dollar.
