Drug Pricing

Effective January 1, 2023, out-of-pocket costs for insulin are capped at $35 per monthly prescription among Medicare Part D enrollees under the Inflation Reduction Act (IRA). A similar cap takes effect in Medicare Part B on July 1, 2023.

High prescription drug costs are a leading concern among Americans. Americans pay higher prices for prescription drugs than any other country in the world, with prescription drug prices in the U.S. more than 2.5 times as high as those in other similar high-income nations.

Prescription drug price increases create affordability challenges for patients and for the government. This report tracks drug price changes from 2016-2022. There were 1,216 products whose price increases during the twelve-month period from July 2021 to July 2022 exceeded the inflation rate of 8.5 percent for that time period. The average price increase for these drugs was 31.6 percent.

Key FindingsPolicy discussion surrounding U.S. prescription drug prices focuses on whether prices in the United States are too high or appropriate relative to the benefits that they offer to patients.

Drug shortages are a persistent public health problem in the United States and in other countries. Shortages can have important implications for the health care systems and pharmacies that purchase, store, and dispense drugs and for the patients who rely on the availability of drugs to treat and prevent disease.

The United States relies on the interactions of private entities – drug manufacturers, health plans and pharmaceutical benefit managers (PBMs) - to achieve value by negotiating prices, operating formularies and implementing other benefit management strategies. The U.S. does not establish or negotiate prices for prescription drugs, as do some other countries. A critical part of the U.S.

Insulin prices have increased dramatically over the past decade in the United States. This report presents results from international price comparisons of insulins using a price index approach.

This Report responded to a request from the House and Senate Committees on Appropriations.

The Secretary of Health and Human Services (HHS) has been directed to submit a drug pricing report containing information requested by the House Committee on Appropriations.

The prices charged by drug manufacturers to wholesalers and distributors (commonly referred to as exmanufacturers prices) in the United States are 1.8 times higher than in other countries for the top drugs by total expenditures separately paid under Medicare Part B. U.S. prices were higher for most of the drugs included in the analysis, and U.S.