Tags: Medicare | Part D | prescriptions | costs

Small Number of Drugs Account for Large Share of Medicare Costs

By    |   Friday, 01 May 2015 09:52 AM

Medicare spends more than $100 billion annually on prescription drugs and, in 2013, the 10 most expensive medicines accounted for almost 5.5 percent of the total spending of Medicare Part D, according to data released by the federal government on Thursday.

As part of an effort to increase transparency, the Centers for Medicare and Medicaid Services (CMS) published a wealth of data containing information from over one million distinct healthcare providers who collectively prescribed approximately $103 billion in prescription drugs and supplies paid under the Part D program, which began in 2006 and pays for a portion of the prescription drug costs for approximately 36 million elderly and disabled Americans.

"This transparency will give patients, researchers, and providers access to information that will help shape the future of our nation's health for the better. Beneficiaries' personal information is not available; however, it's important for consumers, their providers, researchers, and other stakeholders to know how many prescription drugs are prescribed and how much they cost the healthcare system, so that they can better understand how the Medicare Part D program delivers care," said acting CMS Administrator Andy Slavitt.

According to CMS, the 10 most commonly prescribed drugs were all generic and accounted for between 21.0 million and 36.9 million claims. The total costs for each drug ranged from $145 million to $911 million.

Conversely, the most expensive drugs constituted a much larger percentage of overall spending, despite being used by far fewer individuals.

According to an analysis of the data by The Wall Street Journal, of the nearly 3,500 drugs prescribed in 2013, approximately 400 medicines (with a cost of $3,000 or more per beneficiary) cost the program almost $26.5 billion, and accounted for 26 percent of the program's total spending but just 1 percent of claims.

The 10 most expensive pharmaceuticals all were brand-name and cost $18.78 billion in 2013, with the costliest drug being Nexium, which is used to treat heartburn and acid reflux.

In 2013, claims for Nexium cost $2.5 billion for 1.5 million Medicare patients. Although Nexium was approved for over-the-counter sales in 2014, Medicare paid 32.3 million claims for its generic version, omeprazole, at a cost of $643 million in 2013, the Journal reported.
The data also showed some variation of costs that exist between the states.

Rhode Island and Nebraska had the most claims per Medicare beneficiary, averaging 4.6 per patient, while Delaware had the lowest number, with the average number of claims per beneficiary at 3.3, according to an analysis of the data conducted by Kaiser Health News (KHN).

Despite expressing support for CMS' "efforts to increase transparency," the Pharmaceutical Research and Manufacturers of America (PhRMA) contended data could be misleading and did not accurately represent actual Medicare Part D spending.

"However, the Medicare Part D cost data released today are misleading and an inaccurate representation of actual Medicare Part D spending. Significant price negotiation exists in Part D and results in rebates of as high as 20 to 30 percent for branded medicines. These savings are not reflected in the data," said PhRMA president and CEO John J. Castellani in a statement issued Thursday.

Castellani said that rebates played a significant role in keeping Medicare Part D spending below original estimates.

"As with all data, it is important to look at these numbers in context. As released, these data and analyses may be confusing to beneficiaries, making it difficult for them to better understand how care is delivered under the Part D program," he added.

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Medicare spends more than $100 billion annually on prescription drugs and, in 2013, the ten most expensive medicines accounted for almost 5.5 percent of the total spending of Medicare Part D.
Medicare, Part D, prescriptions, costs
Friday, 01 May 2015 09:52 AM
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