Estimating US savings on outpatient prescription pharmaceuticals from international reference pricing
A Comprehensive Analysis of International Reference Pricing Policy
Projected Annual National Savings for the U.S.:
$184 Billion
If outpatient prescription drugs were priced comparably to those in Canada, France, Germany, Japan, and the U.K.
Our findings, based on an analysis of utilization and global price differentials for over 8,000 drugs, demonstrate the substantial fiscal and equity gains achievable through aligning U.S. prices with international benchmarks.
Savings Across Major Payers
Medicare
62% Reduction
The largest relative saving due to historically elevated baseline drug costs, offering a path to long-term fiscal sustainability for the program.
Medicaid
35% Reduction
Though relatively smaller due to existing statutory rebates, this still represents considerable absolute savings for a program serving low-income individuals.
Private Insurers
51% Reduction
Realizing the largest absolute savings ($82.2 Billion), reflecting the current fragmentation and limited collective bargaining power of private payers.
Patient Out-of-Pocket Savings
38.9% Reduction
Annual out-of-pocket spending for patients and families would be substantially reduced, fostering greater medication adherence and health equity.
Cost Relief for Critical Chronic Conditions
The financial burden of managing common, long-term chronic conditions would be markedly reduced under international reference pricing, with an overall pharmaceutical cost reduction of 39.5 to 83.3%.
Diabetes Mellitus
Atrial Fibrillation
Heart Failure
Hypothyroidism
COPD
ADHD
Major depressive disorder
Key Drug Disparities
Over 70% of commonly prescribed branded drugs exhibit a significant price disparity exceeding 75%, notably sitagliptin (92.5%), insulin aspart (89.2%), and fluticasone/salmeterol (88.9%), underscoring the massive overspending on widely used treatments.
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"Estimating US savings on outpatient prescription pharmaceuticals from international reference pricing"
Yang Ye, Abhishek Pandey, Meagan C. Fitzpatrick, Lilia Potter-Schwartz, Carolyn Bawden, Bilori Bilori, Burton H. Singer, Alison P. Galvani. Estimating US savings on outpatient prescription pharmaceuticals from international reference pricing, Proc. Natl. Acad. Sci. U.S.A. 123 (2) e2520871122, https://doi.org/10.1073/pnas.2520871122 (2026).