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Innovation Ecosystem

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Where’s the Drug Dollar Going?

The path of a prescription medicine from a manufacturer to a patient involves multiple stakeholders and impacts what patients pay at the pharmacy.

In fact, half of every dollar goes to someone who did not make the medicine.

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A distorted U.S. one dollar bill is shown with a digital grid overlay and a gradient color scheme transitioning from orange, green, red, to blue, suggesting a fusion of technology and currency.
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25%

PBMs, Insurers, and Other Supply Chain Entities

$170 billion in rebates, discounts, fees and other payments from biopharmaceutical companies went to these middlemen in 2023.

12%

Government Statutory Rebates and Fees

Biopharmaceutical companies paid $79 billion in legally required rebates, discounts and fees to government programs. The IRA will further increase this spending.

10%

340B Provider Markups and 340B Pharmacy Margin

The largest share of 340B costs is driven by hospital markups—where big tax-exempt hospitals markup drugs up to 7x or more.

3%

Commercial Patient Cost Sharing Assistance

Biopharmaceutical manufacturers provide billions in assistance to help patients pay their out-of-pocket costs for medicines. Yet, insurers and PBMs keep at least one-fifth of cost-sharing assistance for themselves.

Explore the 2025 Follow the Dollar Report.

Smart Policies Protect America’s World-Leading Biopharmaceutical Innovation Ecosystem

Policies enacted over the last few decades have shaped an American ecosystem that encourages risk-taking, rewards innovation and turns ideas into medicines.

A healthier future requires not only a commitment to strengthening our world-leading innovation ecosystem but also common sense reforms that put an end to insurer and PBM abuses, fix the IRA, reform the 340B hospital markup program and ensure patient assistance goes to patients.

EXPLORE OUR POLICY AGENDA FOR A HEALTHIER AMERICA

Generics and biosimilars drive patient and system savings

Our intellectual property system balances innovation and affordability, resulting in a robust pipeline of new medicines and broad access to lower-cost generics and biosimilars. Widespread use of generics and biosimilars keeps costs low; in 2023, the U.S. saved $445 billion by using generics and biosimilars.

Today, 90% of prescriptions in the U.S. are filled with generics, and the average patient copay for a generic medicine is $6.

LEARN HOW GENERICS REDUCE COSTS

IP protections fuel competition and patient choice

America’s strong intellectual property framework fuels competition and the development of transformative treatments.

The average time until three medicines were available within a class in the United States fell from ~15 years to ~2 years.

Graph showing average time for three same-class medicines to go to market decreased by 13 years

Americans have more treatment options than anywhere else in the world

U.S. leadership in global biopharmaceutical innovation has led to Americans having the fastest access to new medicines and more treatment options.

Most medicines launched first

Americans have access to 85% of new medicines, compared to less than 40% for Europeans, on average.

Highest share of new medicines available

Nearly 3 out of 4 new medicines are available to U.S. patients first.

Fastest access to new medicines

Patients in other OECD countries wait an average of 3.4 years longer than U.S. patients for their government health plans to cover new medicines.

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"We need to be innovating and staying abreast of all the potential that science has to offer. That’s why I think that ensuring there are policies that maintain innovation is so critical.”

Sandra Milan

Vice President, Project Team Leadership, Molecular Oncology, Genentech

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Innovation Ecosystem Reinforces American Leadership

Our world-leading innovation ecosystem is critical to maintaining our country’s leadership in biopharmaceutical innovation and supporting patient access to new medicines.

EXPLORE OUR INVESTMENT IN AMERICA
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Our Work in Action

To maintain America’s global leadership, we need to support the next generation of innovation in medicine.

View All Case Studies
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Statins and Generics Lower Costs and Provide Additional Treatment Options for Patients

Discover how the development of innovative statins and the availability of generics have reduced both near- and long-term system costs while improving patient outcomes.

Read case study
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Brand-to-Brand Competition Shapes Therapeutic Classes

Learn more about how healthy competition can make cutting-edge therapies more affordable, giving patients better access to the treatments they need while driving innovation forward.

Read case study
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CAR-T Therapy Revolutionizing Cancer Treatment

Learn how CAR-T therapy is revolutionizing cancer treatment by using reprogrammed T-cells to target and destroy cancer cells.

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HIV Therapies Add 20 Years and Cut Infections

Learn more about how preventive and prophylactic HIV therapies increase lifespans by approximately 20 years and reduce new infections.

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