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New Medicare List of Most Expensive Drugs Shows Massive Price Hikes

Harvoni had highest total spending in 2015

The Centers for Medicare and Medicaid Services (CMS) has released new data identifying prescription medications that had sharp price increases and those that accounted for its largest total spending in 2015. Total prescription drug costs for 2015 were estimated to have been $457 billion, or 16.7% of personal health care spending. This is up from $367 billion, or 15.4% of personal health care spending, in 2012.

“With annual growth expected to average 6.7% through 2025, we can expect increasing costs to continue to put pressure on families and programs that cover prescription drugs,” said Andy Slavitt, acting CMS administrator.

According to the CMS report, the highest total spending on a single drug changed in 2015, with Harvoni (ledipasvir/sofosbuvir, Gilead), the brand-name hepatitis C virus treatment, overtaking Abilify (aripiprazole, Otsuka), a brand-name treatment for schizophrenia, depression, and other illnesses, which was the drug with the highest total spending in Medicaid from 2011 to 2014. Spending on Harvoni jumped from $94.7 million in 2014 to $2.2 billion in 2015.

The top two Medicare Part D drugs—Harvoni and the diabetes insulin pen Lantus (insulin glargine, Sanofi-Aventis )––also made it into the top five Medicaid drugs in terms of total spending. Each was associated with more than $1 billion in Medicaid spending.

Lorazepam, a generic drug to treat anxiety, had an average unit cost increase of 1,264% between 2014 and 2015, according to the report. Five other drugs had unit cost increases of more than 300%. In total, Medicaid spending on 20 drugs with unit cost increases more than doubled from $146 million in 2014 to $486 million in 2015.

Among Medicaid drugs with the highest cost per prescription fill, Advate (Baxter Healthcare), the brand-name hemophilia treatment that prevents deadly bleeding episodes in adults and children, had an average cost per fill of $20,828 and was associated with total program spending of $354 million.

Mylan’s controversial EpiPen did not appear in the top 20 Medicaid drug price increases or spending because its large price increases occurred prior to this year. However, CMS data show that Medicare and Medicaid spending on EpiPens rose by more than 500% from 2011 to 2015.

Of the 20 drugs with the highest per-unit cost increases in Medicaid, nine were generic drugs. Those products had price increases ranging from 140% to nearly 500% between 2014 and 2015.

The five Medicare Part D drugs with the highest total drug spending each accounted for more than $2 billion in gross spending in Part D in 2015. The five drugs with the highest total Medicare Part B spending in 2015 were the same as in 2014, and combined they totaled more than $7 billion in spending.

Among the Part D drugs with the highest unit cost, the chemotherapy agent that treats leukemia and other cancers, Gleevec (imatinib mesylate, Novartis), had a per-user cost of $81,152 and was associated with total program spending of $1.2 billion.

The brand-name drug Glumetza (metformin, Salix Pharmaceuticals), which manages high blood sugar, had an average unit cost increase of 381% in Part D between 2014 and 2015. Three other drugs had increases of more than 200%.

Among Part B drugs, the brand-name treatment for multiple sclerosis and Crohn’s disease, Tysabri (natalizumab, Biogen Idec), had a per-user cost of $39,767 and total program spending of $288.8 million.

The generic chemotherapy drug mitomycin, which treats stomach, pancreatic, and other cancers, had an average unit cost increase of 163% in Part B between 2014 and 2015, and six products had unit cost increases of more than 20%. 

The role of price increases in rising U.S. prescription-drug costs has become a hot political issue. In September, Heather Bresch, chief executive at Mylan, was called to testify before Congress to explain her company’s steep price increases for the EpiPen, an emergency epinephrine autoinjector to counter severe allergic reactions.

Sources: CMS Blog; November 14, 2016; and Wall Street Journal; November 14, 2015.

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