Surge in Prescription Costs Hits Medicare



The Center for Medicare and Medicaid released information about the 80 most expensive and significant drugs for Medicare in 2014. The Medicare Drug Spending Dashboard was a targeted list of drugs that had a high increase in price in 2014, a large single-patient expense, or were in the top 15 medication expenditures for Part D or Part B. Nothing about the information release is much of a surprise and some of the media reaction can be reduced to a giant digital yawn, but these are jaded media types that are bored by large numbers in entitlement spending.

The information in the data release is revealing in specifics, but not surprising taken as a whole. The administration was keen on releasing the data to provide some political ammunition in the fight against prescription price increases by presidential candidates and in congress. Seeing the many commas in the list of billions and millions of tax dollars spent was not a surprise. As an intellectual concept we know Medicare and Medicaid spend a lot on prescription drugs.

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Prescription drug prices have been a political issue and in the news more so than any time in a decade. This coincides with the actual increase spending on pharmaceuticals which hasn’t been matched since 2002. The overall spending on prescription drugs in the US market has risen about 12%. Medicare has actually seen a steeper rise than the overall spending average.

“According to the Wall Street Journal, the data show that Medicare spending on prescription drugs grew by 16.9% in 2014, up from 9.5% growth in 2013.”

Medicare has been an ATM machine for drug manufacturers since Medicare Part D was passed during the Bush administration. The CMS Drug Spending Dashboard shows that a large portion of the spending for the prescription benefit is condensed into a small number of drugs as part of the whole.

The name brand drug Nexium and its generic alternative accounts for more than $2.5 billion in Medicare spending in 2014. It is the second largest spending total falling short of the number spent on the Hepatitis C cure Solvaldi at $3.1 billion.

If Medicare was able to use data platforms to increase efficiency and allow for negotiating with drug makers, taxpayers would save billions. The CMS “dashboard” is an exercise that increases transparency, but without political will there will never be change. Political change and deployment of digital health tools that can reduce waste need to be the real goals of increased transparency.

You can view the Medicare Drug Spending Dashboard here.