Spiraling Prescription Drug Costs Pummel Medicare in 2014
Source: Wall St. Journal (12/22/2015 )
A new study study released by the Centers for Medicare and Medicaid Services, sure to fuel the raging debate over drug pricing, found that increases of 100 percent or more in prescription drug costs per unit in a single year contributing to higher U.S. consumer spending.
The study identified at least five drugs that were covered under Medicare’s Part D drug benefit and had increases of 100 percent or even more from 2013–2014. Top of the list: pain reliever Vimovo, a drug whose cost-per-unit skyrocketed more than 500% after Horizon Pharma PLC purchased rights to the drug from AstraZeneca. Vimovo was one of the drugs highlighted in an April Wall Street Journal article about drug makers buying old products and substantially raising prices. Medicare-Part-D spending on Vimovo rose to $38.9 million in 2014 from $7.3 million in 2013, CMS said.
A Horizon spokesman said Vimovo is “a clinically differentiated, proprietary formulated medicine that meets an unmet medical need.”
The 2014 drug-price information was part of a new online database, the “Medicare Drug Spending Dashboard,” detailing 80 drugs that ranked the highest by total Medicare spending, spending per member or by percentage price increase. CMS said the drugs account for 33% of all Medicare Part D spending, and 71% of all spending on prescriptions by Medicare Part B, which covers drugs administered in doctor’s offices and outpatient clinics.
CMS said it released the dashboard, which it plans to update on a regular basis “to provide additional information, increase transparency and address the affordability of prescription drugs.” It follows a November forum about rising drug costs that was sponsored by the U.S. Department of Health and Human Services. Medicare spending on prescription drugs accelerated during 2014, rising 16.9 percent versus 9.5 percent growth in 2013, CMS said.
The new data emerge amid a rising debate over drug pricing. Cancer doctors have complained that the high costs of new drugs don’t seem to be tied to the benefits provided by the drugs. Presidential candidates Bernie Sanders, Hillary Clinton, and Marco Rubio have criticized drug prices on the campaign trail. A U.S. Senate committee recently held a hearing about companies that have dramatically raised prices after acquiring older drugs.
According to CMS, about 540 drugs covered by Medicare Part D had increases in cost-per-unit of at least 25% during 2014. The figures for drugs covered by Part D do not reflect manufacturers’ rebates or other price concessions because CMS is barred from publicly disclosing rebate information for Part D.
In addition to Vimovo, other drugs with big increases in costs per unit included Captopril and Digoxin, both used for cardiovascular conditions.
Price hikes were less dramatic among drugs covered by Medicare Part B. CMS said there were 96 drugs with increases in cost-per-unit of at least 10% from 2013 to 2014. The drug with the biggest increase was cyanocobalamin, an injected form of vitamin B12 that is made by multiple companies, the cost per unit of which 12/22/2015 program-business news rose 78%.
Drugs with the highest Medicare spending included the antipsychotic Abilify, the hepatitis C treatment Sovaldi, the cancer treatment Rituxan, and the cholesterol-lowering drug Crestor.