Amid mounting tension over prescription drug costs, the Centers for Medicare & Medicaid Services has posted a new online database to provide information on agency spending for medicines. And the tool revealed substantial increases in costs for many drugs in the Medicare Part D program, which contributed to an overall increase in health care spending in 2014.
For instance, the database noted at least five drugs where the cost per unit rose more than 100 percent from 2013. Leading the list was the Vimovo painkiller, which rose in cost more than 500 percent after Horizon Pharma bought the pill from AstraZeneca (AZN). And five Medicare Part D drugs each accounted for more than $2 billion in spending, led by the Sovaldi hepatitis C treatment at more than $3 billion.
Last year, Medicare spending on medicines rose 15 percent, to $143 billion, a CMS spokesman said. Overall, US spending on medicines rose 12 percent last year.
The database, which CMS calls a dashboard, captured data on 80 drugs covered by the Part D and Part B programs. Part D drugs are taken by patients themselves while Part B drugs are those administered in a doctor’s office or clinic. Details are provided on spending per Medicare member, high spending for the program overall, and those drugs with high unit cost increases in recent years.
These 80 medicines represent 33 percent of all Part D spending and 71 percent of Part B drug spending in 2014, or $55 billion of the more than $143 billion in Medicare prescription drug spending in 2014, according to a CMS summary. For those keeping track, prescription drug spending in Parts D and B was 14 percent of total Medicare spending in 2014, up from 11 percent in 2010.
We should note, however, that the dashboard does not provide the net prices paid to drug makers or the rebates that these companies frequently offer to health insurance plans and prescription benefit managers, which administer drug benefits for employers, government agencies and unions, among others.
The dashboard arrives amid growing controversy over rising pharmaceutical prices. The issue has become the focus of congressional hearings, is a hot topic on the presidential campaign trail, and increasingly has been lamented on social media, especially after Martin Shkreli derided his critics after buying a decades-old, life-saving medicine, and jacking up the price by 5,000 percent.
The Obama administration took advantage of the uproar last month by holding a day-long forum to discuss pricing concerns. Among those on hand were pharmaceutical and insurance executives, federal and state health officials, and consumer advocates, among others. The dashboard is a bid by CMS to shed more light on pricing, which is a confusing topic for most everyone but industry insiders.
“We realize the dashboard doesn’t provide a complete picture, but still believe that, by sharing this information and allowing people to analyze the data, we can increase the knowledge around drug spending and support efforts that are evaluating whether public dollars are being spent most effectively,” CMS Acting Administrator Andy Slavitt wrote in a blog to introduce the database.
By posting the data, Slavitt added that CMS hopes to prompt other agencies and companies to release complementary data about medicines — such as clinical effectiveness, formulary placement, comparative effectiveness, and discounts and rebates — that would “promote a more complete understanding of value and patient affordability.”
Here are some nuggets from the dashboard:
The highest cost drug per user in Part D last year was Sovaldi, the Gilead Sciences (GILD) hepatitis C treatment, at $94,056. Rounding out the top five are the antipsychotic Abilify from Bristol-Myers Squibb; GlaxoSmithKline’s (GSK) Advair Diskus asthma treatment Advair Diskus; AstraZeneca’s Crestor cholesterol lowering pill ; and the Nexium acid reflux medication from AstraZeneca.
For Part B, spending per member was highest for Remodulin, which is sold by United Therapeutics (UTHR) and used to treat pulmonary arterial hypertension, at $133,845 in 2014. The five drugs that generated the highest net spending were Regeneron Pharmaceuticals’ Eylea and Roche’s (RHHBY) Lucentis for macular degeneration; Amgen’s (AMGN) Neulasta chemotherapy medication; Johnson & Johnson’s (JNJ) Remicade treatment for rheumatoid arthritis and other ailments; and Rituxan cancer treatment, which is marketed by Roche and Biogen (BIIB).
There were 540 drugs in Part D where unit cost increases exceeded 25 percent, and the spending totaled $13.7 billion, or 11 percent of total Part D expenditures. There were also 267 Part D drugs where per member spending exceeded $10,000 and that worked out to $26.2 billion, or 22 percent of all program spending, according to the CMS dashboard.
Other Part D drugs that experienced big increases in cost per unit were Captopril for high blood pressure, which rose more than 300 percent, and Digoxin for heart failure, which jumped about 300 percent.