Medicare Part D Spending Spikes 77% Even With Prescriptions Down 17%

Medicare spending and out-of-pocket costs on brand-name drugs is up despite a decrease in prescriptions, a government watchdog says. The Department of Health and Human Services' Office of Inspector General found (PDF) that Medicare spending on brand-name drugs jumped 77% from 2011 to 2015. That spike in spending occurred even with a 17% decrease in...
Prescription Drugs and Money image
Despite a decrease in prescriptions, Medicare Part D spending for brand-name drugs is up big time. (TaxRebate.org.uk)

Medicare spending and out-of-pocket costs on brand-name drugs is up despite a decrease in prescriptions, a government watchdog says.

The Department of Health and Human Services' Office of Inspector General found (PDF) that Medicare spending on brand-name drugs jumped 77% from 2011 to 2015. That spike in spending occurred even with a 17% decrease in prescriptions for such drugs.

Part D spending accelerated six times faster than inflation, the OIG also found. A report released earlier this year by Sen. Claire McCaskill, D-Mo. showed brand-name drug prices have jumped by 12% each year from 2012 to 2017.

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"Generally, plan sponsors base their pharmacy reimbursement amounts on the prices that manufacturers set for their drugs," the watchdog said. "Increasing manufacturer prices for brand-name drugs may result in increasing costs for Medicare and its beneficiaries, especially those beneficiaries who need access to expensive maintenance drugs."

RELATED: Consumers could get dinged by Trump's Part D push

After accounting for manufacturer rebates, the watchdog found that brand-name drugs still increased by 62% during the same time frame.

Consumers have also felt the pinch of higher costs in their wallet.

The number of people who paid more than $2,000 in out-of-pocket costs nearly doubled during the five-year period, according to the OIG.

The report comes as the Trump administration attempts to tackle high drug prices, which could include pushing some Part B drugs into Part D. Recent analysis found that policy change could mean higher out-of-pocket spending for beneficiaries.

Source: www.fiercehealthit.com