Researchers at the Yale School of Public Health (YSPH) estimate that the United States could reduce its annual spending on outpatient prescription drugs by $184 billion—a 51% decrease—if domestic prices were aligned with those in other high-income nations.
The findings come as Congress is considering strategies to lower prescription drug costs. One option, proposed by Senator Bernie Sanders of Vermont, is the Prescription Drug Price Relief Act of 2025, which would cap U.S. prices at the median price in Canada, France, Germany, Japan, and the United Kingdom.
The study, conducted by the Yale Center for Infectious Disease Modeling and Analysis (CIDMA) and published in the research journal Proceedings of the National Academy of Sciences, examined prices and utilization for more than 8,000 prescription medications across all major U.S. payers.
“Our analysis reveals how excessively Americans are overpaying for the same medicines available at much lower prices in other high-income countries,” said Alison Galvani, director of CIDMA and the Burnett and Stender Families Professor of Epidemiology at YSPH. “By bringing U.S. prices in line with international standards, we could cut national drug spending in half while easing the enormous financial burden placed on patients.”
More than 70% of widely used branded medications are priced at least four times higher in the U.S. than in comparable countries. This disparity is particularly stark for several essential chronic-disease treatments, including diabetes medications, which exceed international reference prices by more than fivefold.
Projected savings would be substantial under the proposed pricing system. Private insurers would save $82.2 billion annually, Medicare $70.5 billion, and Medicaid $12.9 billion, according to the study. Patients would see out-of-pocket spending decline by nearly 40%, a significant benefit for seniors, individuals with chronic conditions, and uninsured Americans who are often charged full list prices.
“These savings translate directly into improved public health,” Galvani said. “Lower drug costs expand access to treatment, increase continuity of care, and reduce medical debt.”