Costs Rise for Medicare Part D's Top 10 Drugs with Highest Spend

Federal spending and out-of-pocket costs are steadily increasing for some of the most expensive medications in the Medicare Part D program.

According to a new report, the costs for the drugs with the highest spend in Part D rose almost one-third between 2011 and 2015, even as fewer patients are receiving them.

In a report published in the Journal of the American Geriatrics Society, researchers from the Skaggs School of Pharmacy and Pharmaceutical Sciences at University of California San Diego reviewed the latest publicly available utilization data for Medicare Part D from the Centers for Medicare and Medicaid Services (CMS). Their findings indicate that although fewer patients are using these expensive drugs, costs are on the upswing.

From 2011 to 2015, the amount that Medicare Part D paid for the 10 highest spend medications increased by 32%, from an inflation-adjusted $21.5 billion 2011 to $28.4 billion in 2015, according to the data.

Unless the rising costs are addressed, the researchers project that these drugs could reach $40 billion annually by the end of 2020.

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Despite the increased spending, fewer patients are being treated with these medications. According to the report, the number of patients using at least 1 one of these medications declined 32% over the same time period. The average annual decrease was 7.9%.

Although the drugs on the highest spend list varied each year, some medications appeared frequently. These drugs included several specialty treatments and range from therapies for diseases such as hepatitis C to diabetes.

In 2015, the top 10 drugs were:

1. Lepidasvir/sofosbuvir (hepatitis C)

2. Insulin glargine (diabetes)

3. Rosuvastatin calcium (cardiovascular disease)

4. Fluticasone/salmeterol (asthma and chronic obstructive pulmonary disease [COPD])

5. Tiotropium bromide (COPD)

6. Sitagliptin phosphate (diabetes)

7. Lenalidomide (blood cancers)

8. Esomeprazole magnesium (dyspepsia, gastroesophageal reflux)

9. Pregabalin (epilepsy, neuropathic pain, generalized anxiety disorder)

10. Adalimumab (arthritis, Crohn disease)

For individuals without the benefit of subsidies, the average out-of-pocket cost for 1 of these 10 medications increased from $375 in 2011 to $1366 in 2015, the researchers noted.

The most expensive drug on the list, lepidasvir/sofosbuvir (Harvoni), cost more than $90,000 for the full treatment per user in 2015.

“At the end of the day, fewer patients are receiving the medications that the federal government is spending the most money on and patients are spending more of their own money on these medications,” Jonathan Watanabe, PharmD, PhD, associate professor of clinical pharmacy in the Skaggs School of Pharmacy, said in a press release.

“This is worrisome because our rapidly aging US population means more and more Americans will be using the Medicare system to provide for their pharmaceutical needs,” Jan D. Hirsch, PhD, professor of clinical pharmacy and chair of the division of clinical pharmacy at Skagg School of Pharmacy, said in a press release.

The researchers estimated that the number of Medicare beneficiaries will grow to 81 million in 2030, meaning more patients will continue to be reliant on the program while costs continue to rise.

“One in every $6 in Medicare these days is used on medications,” Dr Hirsch said in the press release. “Spending on expensive, specialty medications is likely to grow with more approved drugs a larger population that require them. Since Medicare Part D is funded by enrollee paid premiums in addition to Congressional appropriates from general revenue, Part D enrollees may expect to face higher premiums on top of increasing co-payments or co-insurance payments.”

Read more about the growth of specialty drug spending here.

Reference

Watanabe JH, Chau DL, Hirsch JD. Federal and individual spending on the 10 costliest medications in Medicare Part D from 2011 to 2015. Health Policy and Economics. 2018. https://doi.org/10.1111/jgs.15443

The Rising Price of Medicare Part D’s 10 Most Costly Medications [news release]. UC San Diego’s website. https://ucsdnews.ucsd.edu/pressrelease/the_rising_price_of_medicare_part_ds_10_most_costly_medications. Accessed July 9, 2018.