U.S. Drug Prices Remain Significantly Higher Than Canada's, Even After Accounting for Discounts

Washington D.C. – A recent social media post has reignited discussions surrounding the vast disparities in prescription drug pricing between the United States and Canada, highlighting the often-overlooked impact of "list-to-net discounts" in the American pharmaceutical market. According to a tweet by user Crémieux, an unnamed diagram initially suggested U.S. prices were "825% of Canada's," a figure the user then clarified to be significantly altered by these discounts.

The tweet elaborated that, in reality, "America pays 145% of Canadian gross prices" after factoring in the U.S. discount structure. It further suggested that Canada itself "achieves a roughly ~25% discount," leading to a comparative U.S. price of "~193%" relative to Canada's net prices. This perspective underscores the complexity of international drug price comparisons, where published list prices often do not reflect the actual cost paid by various stakeholders.

Recent analyses consistently demonstrate that U.S. drug prices, particularly for brand-name medications, are substantially higher than those in other developed nations. A 2024 report by the U.S. Department of Health & Human Services (HHS) Assistant Secretary for Planning and Evaluation (ASPE), based on 2022 data, found that U.S. manufacturer gross prices for all drugs were 278% of prices in 33 OECD comparison countries combined. For brand-name originator drugs, this disparity widened, with U.S. gross prices reaching 422% of those in peer nations.

The ASPE report specifically noted that U.S. gross prices were 229% of Canada's for all drugs. While direct net price comparisons are challenging due to confidential rebates, the report estimated that after adjusting for U.S. rebates and other discounts, brand-name drug prices were still 308% of prices in other countries. Similarly, a December 2024 JAMA Network study comparing Medicare-negotiated prices for 10 top drugs found that, on average, these prices were 2.8 times higher than the average in 11 wealthy OECD countries, including Canada. For instance, the U.S. initial net price for Stelara was 5.1 times higher than Canada's.

These findings reinforce the argument that while U.S. list prices are dramatically higher, the intricate system of rebates and discounts does reduce the final cost. However, even with these adjustments, the U.S. continues to pay significantly more for prescription drugs than its northern neighbor and other comparable nations, prompting ongoing debate among policymakers and healthcare advocates.