Published April 5, 2026 · Updated monthly
Why Drug Prices Keep Going Up: A Data Breakdown
US prescription drug prices are the highest in the world and have risen faster than inflation for decades. Americans pay 2-3x more than patients in other developed countries for the same medications. Using CMS Medicare Part D data, we identify which drugs are rising fastest and explain the systemic factors driving costs higher.
Drugs With the Biggest Price Increases
| Drug | Condition | Cost/Claim | YoY Change |
|---|---|---|---|
| Mounjaro | Diabetes | $673 | +312.4% |
| Wegovy | Obesity | $820 | +185.6% |
| Ozempic | Diabetes | $685 | +72.5% |
| Rinvoq | Autoimmune Diseases | $3,498 | +56.3% |
| Skyrizi | Autoimmune Diseases | $4,475 | +42.8% |
| Rybelsus | Diabetes | $428 | +38.7% |
| Dupixent | Autoimmune Diseases | $2,819 | +35.2% |
| Calquence | Cancer | $10,105 | +34.2% |
| Verzenio | Cancer | $5,628 | +32.1% |
| Farxiga | Diabetes | $266 | +31.5% |
| Keytruda | Cancer | $18,176 | +28.6% |
| Kisqali | Cancer | $7,621 | +28.5% |
| Vraylar | Mental Health | $383 | +26.3% |
| Repatha | High Cholesterol | $757 | +24.6% |
| Erleada | Cancer | $8,308 | +24.6% |
Five Systemic Reasons Prices Keep Rising
1. No Government Price Negotiation (Until Now)
Unlike every other developed country, the US historically prohibited Medicare from negotiating drug prices directly with manufacturers. The Inflation Reduction Act of 2022 changed this — Medicare can now negotiate prices on select high-cost drugs starting in 2026. But the scope is limited to 10-20 drugs per year, and the full impact will take a decade to materialize.
2. Patent Protection and Evergreening
Brand-name drugs have 7-14 years of effective patent life after approval. During this period, manufacturers face no price competition and can raise prices freely. Many companies extend exclusivity through "evergreening" — filing additional patents on formulations, dosing methods, or delivery mechanisms. Our Generic Watch tracks when these protections expire.
3. The PBM Middleman System
Pharmacy Benefit Managers (PBMs) negotiate between drug makers, insurers, and pharmacies. Manufacturers set high list prices, then offer rebates to PBMs for formulary placement. This creates a system where the list price (what you pay at the counter) stays high even when the net price (after rebates) is lower. The rebate system incentivizes higher list prices because larger rebates mean more revenue for PBMs.
4. Limited Generic Competition in Specialty Drugs
The most expensive drugs are increasingly biologics — complex molecules that cannot be easily replicated. Biosimilar development is slower and more expensive than traditional generic development, meaning brand-name biologics face less competitive pressure. The FDA has approved numerous biosimilars, but market adoption remains slow due to rebate contracts and prescribing habits.
5. Inelastic Demand
Patients cannot stop taking life-saving medications because the price goes up. This inelastic demand gives manufacturers pricing power that does not exist in normal consumer markets. When insulin prices triple, patients pay — or ration their doses. This dynamic is most acute for drugs with no therapeutic alternatives.
What Is Changing
Several reforms are beginning to bend the cost curve: Medicare price negotiation (IRA), $35 insulin cap for Medicare patients, inflation-based rebates (manufacturers must pay back Medicare if prices rise faster than inflation), and the $2,000 out-of-pocket cap for Medicare Part D starting in 2025.
Track prices, compare alternatives, and check generic availability for any drug on DrugPrice.
Frequently Asked Questions
Yes. Over the past two decades, brand-name drug prices have risen 4-7x faster than general inflation. Many individual drugs see annual price increases of 5-10%, even without any change to the product.
Other countries use government price controls, reference pricing, and direct negotiation. The US has historically allowed market-based pricing with no government negotiation (until the IRA). The result: Americans pay 2-3x more than Canadians or Europeans for the same drugs.
For some drugs, yes. Medicare can now negotiate prices on 10-20 high-cost drugs per year, with the first negotiated prices taking effect in 2026. The IRA also caps insulin at $35/month for Medicare patients and penalizes manufacturers who raise prices faster than inflation.
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