Price Hikes Drove Medicare Prescription Drug Spending, Says CMS

By Jill Drachenberg, Managing Editor, AHC Media

Medicare paid $137.4 billion for prescription drugs in 2015, with $8.7 billion going toward significant price hikes, according to Drug Spending Dashboard data released by the Centers for Medicare & Medicaid Services (CMS). CMS chooses drugs for the dashboard based on high spending per user through Medicare and high spending per prescription fill through Medicaid, drugs with high total spending, and drugs with significant price hikes.

Hepatitis C drug Harvoni and diabetes drug Lantus led the pack, as Medicare spent $11 billion total on those prescriptions. Lantus costs have nearly tripled over the last five years, from $1.5 billion in 2011 to $4.4 billion in 2015. Costs for generic malaria treatment hydroxychloroquine sulfate increased 370% between 2014 and 2015; type 2 diabetes drug Glumetza jumped 380% in the same time period.

Medicaid also experienced huge drug price hikes. Costs for antiparasitic drug Daraprim — whose price infamously skyrocketed under former Turing Pharmaceuticals CEO Martin Shkreli — soared from $2.2 million in 2014 to $15.7 billion in 2015. Antianxiety drug Ativan skyrocketed 1,264% in the same time period.

The data, however, have limitations: The costs do not include any rebates, as CMS is prohibited from sharing those numbers. In 2014, the average rebate was 17.5% for brand-name drugs in Medicare Part D plans.