Why Prescription Drug Prices Are So High in the United States

Every year, millions of Americans face a brutal choice: pay for their medicine or pay for rent. It’s not a hypothetical. It’s real. A woman in Ohio skips her insulin doses every other day because her co-pay is $400 a month. A veteran in Texas cuts his heart medication in half to make it last. These aren’t outliers-they’re symptoms of a broken system. The U.S. spends more on prescription drugs than any other country in the world, yet Americans don’t get better outcomes. They just pay more.

The Same Pill, Three Times the Price

Take Galzin, a drug used to treat Wilson’s disease. In the United States, it costs $88,800 a year. In the United Kingdom? $1,400. In Germany? $2,800. That’s not a mistake. It’s not a pricing error. It’s the norm. The exact same pill, made in the same factory, shipped in the same box, sold at a markup of over 1,500% just because it’s sold in America.

This isn’t rare. The White House confirmed in November 2025 that Americans pay more than three times what people in other developed countries pay for the same brand-name drugs-even after factoring in manufacturer discounts. And it’s not just old drugs. The newest treatments for obesity and diabetes, like Ozempic and Wegovy, were priced at over $1,000 a month in 2024. By late 2025, after five deals announced by the White House, those same drugs dropped to $350 a month. That’s a win. But it’s also proof that those prices weren’t based on cost-they were based on what the market would bear.

Why Can’t the Government Negotiate?

Here’s the thing: in nearly every other developed country, the government sits down with drugmakers and says, “This is what we’ll pay.” Canada, Germany, France-they all negotiate. The U.S. doesn’t. Not for Medicare, not for Medicaid, not for most public programs.

The Medicare Modernization Act of 2003 made it illegal for Medicare to negotiate drug prices directly with manufacturers. That law was passed with bipartisan support. At the time, the argument was that private insurers would handle the negotiating. But that didn’t happen. Instead, a new layer of middlemen stepped in: Pharmacy Benefit Managers, or PBMs.

PBMs were supposed to be the good guys. They were hired by insurers to get discounts. But over time, they became powerful players in their own right. Many now own pharmacies, manage insurance plans, and even have stakes in drug manufacturers. Their business model? The higher the list price of a drug, the bigger the rebate they get. So they push for higher prices-even if it means patients pay more out of pocket.

It’s a system designed to reward complexity, not affordability.

Who’s Really Making Money?

The pharmaceutical industry claims high prices are needed to pay for research and development. That sounds fair-until you look at the numbers.

The U.S. has less than 5% of the world’s population. But according to the White House, it accounts for 75% of global pharmaceutical profits. That means the rest of the world is effectively subsidizing American drug prices. Drug companies make more money from U.S. sales than from every other country combined.

And it’s not just the big names. Even small biotech firms with single drugs on the market can charge tens of thousands of dollars a year. Why? Because they own the patent. And in the U.S., patent protections are long, broad, and easy to extend-sometimes through minor tweaks to a drug’s formula just before the patent expires. This is called “evergreening.” It’s legal. It’s common. And it keeps prices high.

What’s Changed? Not Much

There have been attempts to fix this. The Inflation Reduction Act of 2022 was supposed to be the turning point. It gave Medicare the power to negotiate prices for a small number of high-cost drugs. In 2026, that list includes 10 drugs. That’s it. And even that power was weakened by the 2025 budget reconciliation bill, which experts say will cost Medicare at least $5 billion more than originally projected.

The Act also introduced a rule: if a drug’s price rises faster than inflation, the manufacturer must pay a rebate to Medicare. That saved money on 64 drugs in early 2025. But it doesn’t stop companies from raising prices before the cap kicks in. And it doesn’t help people who don’t have Medicare.

Meanwhile, the White House announced five new deals with drugmakers in late 2025, claiming they brought prices “in line with other nations.” Ozempic dropped from $1,000 to $350. Wegovy followed suit. But these are voluntary deals. No law requires them. The companies could raise prices again tomorrow. And they have.

Senator Bernie Sanders’ September 2025 report found that 688 prescription drugs increased in price since President Trump took office-even after he publicly promised to lower costs. That’s not a glitch. That’s the system working as designed.

Who Gets Hurt?

The people paying the most aren’t the insurance companies. They’re the patients.

In 2025, 1.5 million Medicare beneficiaries were paying more than $2,000 out of pocket for their prescriptions. That’s before the new $2,000 annual cap under the Inflation Reduction Act kicks in fully. For many, that cap is life-changing. But for others, it’s too little, too late.

Patients with cancer, rare diseases, or endocrine disorders are hit hardest. These are called “specialty drugs.” They make up less than 2% of prescriptions but over 50% of drug spending. In 2024, IQVIA reported that specialty drugs drove an 11.4% spike in U.S. drug spending. And that trend is accelerating.

A growing number of people are rationing their meds. Skipping doses. Cutting pills in half. Going without. The Centers for Medicare & Medicaid Services (CMS) says this isn’t just a financial problem-it’s a public health crisis.

What’s Next?

There’s no easy fix. The system is built on layers of profit, legal loopholes, and powerful lobbying. Drugmakers spent over $400 million on lobbying in 2024 alone. That’s more than any other industry.

Some proposals are gaining traction. Senator Sanders’ Prescription Drug Price Relief Act would tie U.S. prices to those in other major countries. It’s simple. It’s direct. And it’s blocked by the same interests that benefit from the current system.

Others want to break up PBMs or force full price transparency. The HHS announced in September 2025 that new rules requiring real-time drug pricing information will be rolled out in 2026. That could help patients compare prices before they fill a prescription. But without price controls, it’s just a flashlight in a dark room.

The truth is, the U.S. could fix this tomorrow if it chose to. It could let Medicare negotiate. It could cap prices based on international benchmarks. It could ban rebate systems that reward high list prices. But political will is the missing ingredient.

For now, the system stays the same. And Americans keep paying the price.

What You Can Do

If you’re paying high prices, you’re not powerless.

• Use GoodRx or SingleCare to compare cash prices across pharmacies. Sometimes the cash price is lower than your insurance co-pay.
• Ask your doctor about generic alternatives. Many brand-name drugs have cheaper, equally effective generics.
• Check if your drug is on the Medicare Part D Low-Income Subsidy list. You might qualify for extra help.
• Call your drugmaker. Many have patient assistance programs that offer free or discounted meds if you meet income requirements.

It won’t fix the system. But it might keep you alive until it does.