Europeans pay very different prices for medicines depending on their country, but overall, they spend far less than the United States. In 2022, the U.S. spent $617 billion on medicines, nearly three times more than 24 European countries combined, which spent about $233 billion.
One reason for this difference is how drug prices are set. In Europe, governments negotiate directly with drug companies to lower prices, often considering what other countries pay. These negotiations are usually secret, which some experts say can actually keep prices high.
In contrast, the U.S. government generally does not negotiate drug prices, allowing companies to charge much more.
Within Europe, spending on medicines varies widely. For example, Switzerland spends about €525 per person annually on drugs, while Croatia spends only €262.
Different countries use different methods to decide prices: England and Sweden focus on how cost-effective a drug is, while Germany looks at how much a new medicine improves patient health compared to existing treatments.
Drug prices in Europe have been rising recently. In Germany, costs increased by 11.5% in hospitals and 2.6% in pharmacies over the past decade.
Health experts warn that rising prices are putting pressure on national health budgets, which mostly pay for medicines, though some costs fall on patients through fees or extra insurance.
Despite these challenges, experts say European health systems have little room to pay even higher prices. If U.S. policies push drug prices up globally, it could disrupt Europe’s efforts to keep medicines affordable.
In summary, Europe’s lower drug prices come from government negotiations and cost controls, but prices still vary a lot between countries. The U.S. pays more because it lacks these strong price controls, leading to much higher spending on medicines overall.
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