CMS BLOG
November 14, 2016
By: Andy Slavitt, Acting CMS
Administrator, Niall Brennan, CMS Chief Data Officer, Tim Gronniger, CMS Deputy
Chief of Staff
Updated
Medicare and Medicaid Drug Spending Dashboard
The increased costs of prescription
drugs are one of the most critical items for American families. The development
of high-value prescription drugs has improved the health and wellbeing of
millions of Medicare and Medicaid beneficiaries. The continued investment in
innovation is critical to unlock the treatments for many diseases such as
cancer and Alzheimer’s, and help us better manage our chronic conditions like
diabetes, heart disease and depression, providing significant benefits to
patients across the country.
However, in order to have the
maximum impact on these innovations, medications must also be affordable and
accessible. In the last several
months, we have heard about rapidly increasing prices for Epi-Pen, the rising
lockstep cost of insulin medications, and the practice of some companies hiking
prices by combining two cheaper products into one, higher-priced drug.
In order to provide a better sense
of the frequency and pervasiveness of these increases, last year CMS published
a new
interactive tool that tracks the price of drugs purchased for Medicare
beneficiaries. This tool allows the public to view drugs in Medicare Part B and
D with high spending on a per user basis, high
spending for the program overall, and those with high unit cost increases in
recent years. Individual entries contain helpful graphs on trends for specific
drugs over the last five years, as we see below for a drug that helps to
control high blood sugar.
This year, we are not only updating
that tool with more current information, but are adding two important new
pieces of information. First, we are adding information on drugs purchased for
Medicaid beneficiaries, which totals another $57 billion in spending in 2015.
Second, in an effort to provide more precise information, this year we are
adding some high level information on rebates provided by drug manufacturers to
offset some of the high drug costs in Medicare.
Overall, there is significant
growth in spending on prescription drugs, representing a significant burden. In
2015, total prescription drug costs were estimated to have been $457
billion, or 16.7 percent of personal health care spending. This is up from
$367 billion, or 15.4 percent of personal health care spending in 2012. With
annual growth expected to average 6.7
percent annually through 2025, we can expect increasing costs to continue
to put pressure on families and programs that cover prescription drugs.
Because Medicare and Medicaid
beneficiaries often live on low- and fixed-incomes, the high and rising cost of
certain drugs takes a significant toll on them. And prescription drug
costs don't only hit American seniors, people with disabilities, and low-income
families; they also have a significant impact on taxpayers.
·
Total
costs for Medicare Part D above the catastrophic limit increased
by 85 percent to a total of $51 billion from 2013 to
2015, before accounting for rebates. Medicare pays 80
percent of the costs above the catastrophic limit.
·
An
estimated 25 percent of the increase in Medicaid spending on prescription drugs
between 2013 and 2014 was due to increased utilization, while 75 percent was
due to increases in price.
The updated online dashboard tool presents information for three categories of Medicaid prescription drugs: drugs with high spending for the program overall, those with high spending on a per-prescription fill basis, and those with high unit cost increases in recent years. The dashboard provides trend analyses as well as additional detailed information on each drug, such as drug spending, number of prescription fills, brand and generic name, uses, and the name of the manufacturer.
For Medicare, this dashboard presents 80 drugs using 2015 data that met the criteria described below: 40 drugs provided through the Medicare Prescription Drug Program under Part D and 40 drugs administered by physicians and other professionals in the Medicare fee-for-service program under Part B. Products have been selected from each respective program based on three criteria: the top 15 drugs in total program spending; 15 drugs with both very high per-user spending and significant program spending; and 10 drugs with very high unit cost increases. For all drugs included on the list, the dashboard displays relevant spending, utilization, and trend data and also includes consumer-friendly information on the drug product descriptions, manufacturer(s), and clinical indications.
For both Medicare and Medicaid, the dashboard also provides information on the availability of Evidence-based Practice Center (EPC) reports from the Agency for Healthcare Research and Quality when available for a drug.
We encourage you to explore this information,
which adds to the growing amount of data available. There are a number of
highlights and some examples below.
Key Findings – Medicaid
·
Highest total spending on a single drug changed in 2015 with
Harvoni, the brand name Hepatitis C virus treatment, overtaking Abilify (a
brand name treatment for schizophrenia, depression, and other illnesses ),
which was the drug with the highest total spending in Medicaid from 2011 to
2014.
·
Joint impact to Medicare and Medicaid. The top two Medicare
Part D drugs -- Harvoni, the highly-effective brand name Hepatitis C
therapy; and the diabetes management treatment and insulin pen, Lantus
--also made it into the top five Medicaid drugs in terms of total spending.
Each were associated with more than $1 billion in Medicaid spending.
·
Impact of unit increases. Ativan, a brand name drug to
treat anxiety, had an average unit cost increase of
1,264 percent between 2014 and 2015. There were five other
drugs that had unit cost increases of more than 300 percent. In total,
Medicaid spending on these 20 drugs with unit cost increases more than doubled
from $146 million in 2014 to $486 million in 2015.
·
Among
Medicaid drugs with the highest cost per prescription fill,
Advate, the brand name hemophilia treatment that prevents deadly bleeding
episodes in adults and children, had an average cost per fill of $20,828 and
was associated with total program spending of $354 million.
·
Dashboard drug lists may not include drugs covered in the
news today.
EpiPen, for example, does not appear in the top 20 Medicaid drug
price increases or spending because its large prices increases occurred prior
to this year. However, CMS data shows that Medicare and Medicaid spending on
EpiPens rose by more than 500 percent from 2011 to 2015.
Of the 20 drugs with the highest per-unit cost increases in Medicaid, nine were generic drugs. Those products had increases in price ranging from 140 percent to nearly 500 percent between 2014 and 2015.
Key
Findings – Medicare
·
The
five Medicare Part D drugs with highest total drug spending
each accounted for more than $2 billion in gross spending in Part D
in 2015. The five drugs with the highest total Medicare Part B spending in 2015
are the same as 2014 and combined they totaled more than $7 billion in
spending.
·
Among
the Part D drugs with the highest unit cost, the chemotherapy
agent that treats leukemia and other cancers, Gleevec, had a per user cost of
$81,152 and was associated with total program spending of $1.2 billion.
·
The
brand name drug Glumetza that manages high blood sugar had an average unit cost
increase of 381 percent in Part D between 2014 and
2015. There were three other drugs that had increases of more than
200 percent.
·
Among
Part B drugs, the brand name treatment for multiple sclerosis and Crohn’s
disease Tysabri had a per user cost of $39,767 and total program
spending of $288.8 million.
·
The
generic chemotherapy drug Mitomycin that treats stomach, pancreatic, and other
cancers, had an average unit cost increase of 163 percent
in Part B between 2014 and 2015, and there were six products that had unit cost
increases of more than 20 percent.
Rebates in the Medicare Program
These data do not include rebate information that Medicare may receive from pharmaceutical manufacturers because federal law restricts the release of this information. But, for the first time, we are able to provide an aggregated summary of Medicare Part D manufacturer rebate information for calendar year 2014 for several broad categories of brand name drugs [https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-Prescription-Drugs/2014_PartD_Rebates.html].
In total, more than $16 billion in
manufacturer rebates for brand name drugs were collected by Medicare Part D
plans in 2014 for an average rebate of 17.5 percent. Among the Medicare
Part D brand name drugs listed in the 2014 dashboard, the average manufacturer
rebate was 17.8 percent. Twenty-two of these drugs accounted for a total
of $6.6 billion in rebates. As reported by the HHS Office of Inspector General,
it has been found that drug rebates in the Medicare Part D program are
generally lower compared to other payors. Part of the reason for this is that
Medicare cannot harness its full purchasing power to negotiate for rebates
across all Part D plans. We believe releasing this information, even at
this higher level, helps to shed new light on the relationship
between drug pricing and overall program costs.
Concluding Point
We know that millions of Americans
have come to rely on these prescription drugs to manage their chronic
conditions or to treat serious illnesses. Maintaining access to those
medications is the reason we believe informed dialogue on how to manage costs
and cost increases are so important.
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