Experts keep telling us that the economy is improving, but that’s not how it feels for too many Americans. Politicians frequently lament stagnating wages and too few jobs—big problems, to be sure—but downplay another common financial concern: increasing costs that make it difficult for people to get by.

More than half of Americans surveyed for a recent Pew Trust analysis reported worrying about their finances during the past year and felt financially insecure. Topping their list of worries was a lack of savings and not having enough money each month to pay the bills.

Some categories of expenses were causing the most sleepless nights.  No surprise that for parents of kids under 18, paying for college was their biggest worry, plaguing 73 percent of parents in this Gallup poll. Healthcare is another big concern. Forty-two percent of those surveyed by the Kaiser Family Foundation reported it was difficult to afford health care, and those with lower incomes faced the biggest challenge.

Rising health insurance premiums under ObamaCare are part of this story. The New York Times warned this summer, “health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more.” That’s thousands of dollars extra that families will have to come up with next year, and these increases come on top of years of steady hikes in premiums.

Americans are even more worried about affording prescription drugs. In fact, this tops the list of health care concerns for many Americans. People looking at tiny pills understandably wonder why they cost so much. Of course, it’s not the ingredients that make up any tablet that drive up the price tag. Rather, the price is set to recoup the considerable investment in research, development, and testing that comes before the drug could be brought to market. And those costs are huge: According to the Tufts Center for the Study of Drug Development, the process of developing and gaining approval for a new drug on average costs a staggering $2.6 billion.

And that’s for the average drug. Some are even more expensive to develop, and therefore even more costly. For example, many drugs in the news these days are biological drugs, which are created from living cells. The good news is that they are curing deadly diseases; the bad news is that they are so expensive that they can be unaffordable for many patients.

But there’s more good news. After a drug maker’s patent expires, competitors can enter the market, which helps bring costs down and expand access. For biological drugs, this competition comes after a twelve year exclusivity period and in the form of biosimilars, which are essentially like the generic drugs that compete with chemically-based medicines.

We are currently witnessing how this competition process succeeds. In the past few months, the first generic counterparts to biological drugs made it to market. The Federal Trade Commission estimated biosimilars would be between 10-30 percent less expensive than their brand-name counterparts. As a result, drugmakers facing this new competition are cutting prices. Analysts estimate this will reduce spending on biologics my more than $40 billion over the next decade.  This is savings I have seen first-hand in Europe, where biosimilars were on the market 10 years ahead of the U.S. An IMS Health study examined competition in Europe, and from 2006 to 2013, the median reduction was 35 percent.

This competitive process ensures that more people have more access to better treatments and cures, but also preserves businesses’ incentive to invest in the development of the next round of life saving cures. U.S. policymakers ought to take this European lesson to heart. After all, the lack of meaningful competition is also what drives up the cost of health insurance premiums, as onerous government regulations restrict companies’ ability to offer unique products and services to consumers. In fact, bad government policy that distorts that the market is at the heart of many of our most pressing financial concerns, including soaring college costs and housing prices.

Better policies and creating real competitive markets are the best way to bring down prices—and ultimately help give American families more piece of mind.