Rising Prescription Drug Costs: New Tool Lets You Explore What’s Happening in Medicare

You've probably heard about – or seen on your drug store receipt – evidence of the rising cost of prescription drugs. Nationwide, spending on drugs increased 12 percent in 2014, higher than in any year since 2002. Sometimes, this is linked to a breakthrough product whose cure comes with a high price tag. Other times, it is the overnight tripling of the cost of a generic drug that has been around for years. This media attention, and the reality for consumers across the country, begs a lot of questions: What are recent cost trends for the prescriptions I take? Why are they so expensive? What drugs are driving Medicare’s spending? Are generic or brand name drug costs growing faster? And what can be done to make needed medicines affordable?

We share your curiosity. Many people may not realize that Medicare is one of the largest purchasers of prescription drugs in the country, so the program has rich data on how much money we’re spending on these drugs. So today, the Centers for Medicare and Medicaid Services is releasing a new online tool to allow the public to explore Medicare prescription drug spending. The tool includes information on a total of 80 drugs: 40 that are covered under the Medicare Prescription Drug Program (Part D) and 40 that are administered by physicians and other professionals. The tool allows you to sort these drugs in different ways, so you can rank them by total spending, spending per person, or by cost increases. It also shows how much the seniors and people with disabilities on Medicare pay for these drugs. The tool launched today provides a look at information on drug spending in the program and by beneficiaries going back five years and also includes helpful charts showing these trends over time.

Increasing transparency and putting data in the hands of consumers, providers, researchers, and other stakeholders is one of the hallmarks of President Obama’s health reform effort. For example, we have already released Medicare data on: payments to individual hospitals for inpatient stays and same-day services; the types of services and procedures performed by physicians and other health care professionals and the payments for those services; and the types of prescriptions these professionals write for medications and durable medical equipment, prosthetics, orthotics, and supplies (e.g., wheelchairs). News organizations and researchers have used this raw information to create consumer-friendly, searchable lists of Medicare health care providers across the country. Today’s tool has done that work already, making it easy to make comparisons and see trends

While this new tool doesn't answer all of the questions surrounding prescription drug spending, it is a jumping off point for further discussions regarding these important issues. There’s more information coming: we plan to add to this information next year with the release of a similar tool for Medicaid prescription drug spending.

You can find the tool here. We hope you enjoy using it – and perhaps learn something new from the information. We know we did.

Some of the key facts:

Highest Total Spend:

Part D - The top Part D drugs with highest total spending (greater than $2 B in 2014) were (in alphabetical order):

• Abilify (treats certain mental/mood disorders)
• Advair Diskus (prevents asthma or lung disease symptoms)
• Crestor (lowers bad and raise good cholesterol)
• Nexium (treats heartburn and other stomach disorders)
• Sovaldi (treats Hepatitis C)

Largest Percent Price Increases:

Part D: Vimovo (a pain reliever), increased more than 500% – from $1.94 to $12.46

Part B: Cyanocobalamin (a Vitamin B-12 injection), increased 78%

Spending Per User:

Part D:

• Humira (treats arthritis symptoms) – more than 50,000 beneficiaries took this drug in 2014; spending per user of approximately $24,000; total spending of $1.2 billion
• Sovaldi (treats Hepatitis C) – about 33,000 beneficiaries took this drug in 2014; spending per user of $94,000; total spending of $3.1 billion

Part B:

• ranibizumab (brand name Lucentis, treats eye conditions) – more than 140,000 beneficiaries used the drug in 2014; spending per user of approximately $9,000; total Part B spending of $1.3 billion

Highest Beneficiary Annual Cost-Sharing:

All Part B drugs (these are the brand names):

• remodulin ($27,192) (treats high blood pressure in the lungs)
• tyvasco ($20,240) (treats high blood pressure in the lungs)
• provenge ($14,533) (treats advanced prostate cancer)
• hizentra ($11,121) (treats immune deficiency)
• yervoy ($9,566) (treats skin cancer: melanoma)

Trends in Medicare Part D Total Spending for the Top 5 Drugs in 2014

Medicare Part B Drugs with Large Increases in Spending per Unit, 2013 to 2014

Cyclophsphamide – treats certain cancers (chemotherapy)

Aminolevulinic Acid HCl – treats certain skin conditions

Thyrotropin alpha – thyroid medication

Sirolimus – prevents rejection of a kidney transplant

To read CMS’ blog post about the launch of today’s tool: http://blog.cms.gov/2015/12/21/medicare-drug-spending-dashboard

To read CMS’ fact sheet about the tool: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-12-21.html

Jeanne Lambrew is the Deputy Assistant to the President for Health Policy. Erin Richardson is a Senior Policy Advisor in the White House Domestic Policy Council.