Medicare Prescription Drug Spending Increases Significantly Due to High Costs

The Centers for Medicare & Medicaid Services (CMS) recently announced that Medicare spending on prescription drugs, under the Medicare Part D Prescription Drug Program, increased more than 17% in 2014, despite a claims increase of only 3%.

The Medicare Part D program, which has 38 million beneficiaries, includes more than 1 million distinct providers. According to the data, doctors wrote more than 1.4 billion prescriptions under Medicare Part D in 2014, totaling more than $121 billion in drug expenses.

“With this data release, patients, researchers and providers can access valuable information about the Medicare prescription drug program,” Niall Brennan, CMS Chief Data Officer said in press release. “Today’s release joins a series of actions the Administration is taking to improve transparency around government data, including the cost of prescription drugs.”

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According to the data, the 10 most prescribed drugs were all generics, while the 10 most expensive drugs were all brand name. The most prescribed drugs were for heart disease treatment. The most expensive drug was Gilead’s hepatitis C treatment Sovaldi with a total cost of more than $3.1 billion in 2014. While Sovaldi accounted for the highest spending of any drug, only 33,028 beneficiaries received the drug. These data suggest that high costs, not volume of claims are the primary driving factor for drug spending increases. Along with Sovaldi, the two subsequently most expensive drugs included the gastroesophageal reflux treatment, Nexium, and the cholesterol treatment, Crestor.

Of the most prescribed drugs, four treated either high blood pressure or high cholesterol. Lisinopril, also known as its brand name equivalents Prinivil and Zestril, was the most prescribed drug, with more than 38 million claims among about 7.4 million beneficiaries.

According to the data, eight companies manufactured the highest priced drugs. --Julie Gould

Reference:

The Centers for Medicare & Medicaid Services. CMS releases new prescription drug cost data [press release]. cms.gov. Published August 18, 2016. Accessed August 22, 2016.