Medicare cost of 12 brand-name drugs surged more than 50% over 5 years: 4 things to know

Prices for many of the 20 most commonly prescribed brand-name drugs to Medicare Part D beneficiaries rose nearly 10 times more than the cost of inflation over a five-year period, according to a report released March 26 by Sen. Claire McCaskill, D-Mo.

For the report, minority staff of the Senate Homeland Security and Governmental Affairs Committee approximated the 20 most commonly prescribed brand-name drugs for seniors based on the most recent CMS prescriber data. They determined the most commonly prescribed drugs were Diskus, Crestor, Januvia, Lantus/Lantus Solostar, Lyrica, Nexium, Nitrostat, Novolog, Premarin, Proair HFA, Restasis, Spiriva Handihaler, Symbicort, Synthroid, Tamiflu, Ventolin HFA, Voltaren Gel, Xarelto, Zetia and Zostavax.

The minority staff then examined data from the IQVIA National Sales Perspectives information service to identify sales numbers, weighted prices for the average wholesale acquisition cost and other information for the 20 drugs from 2012-17.

Here are four things to know.

1. The report found prices of the 20 drugs, on average, jumped 12 percent annually during the studied timeframe. That's approximately 10 times the average annual inflation rate, according to Ms. McCaskill.

"Can you imagine if you went to an auto dealership and last year's exact model was being sold at a 20 percent mark-up, and then you went back the next year and it had happened again?" said Ms. McCaskill, the top-ranking Democrat on the Senate Homeland Security and Governmental Affairs Committee. "That's exactly what's happening in the prescription drug industry, where the cost of identical drugs skyrockets year after year."

2. The report also showed prices of 12 of the studied drugs increased by more than 50 percent from 2012-17, and prices of six increased more than 100 percent. It specifically referenced the drug Nitrostat, saying the drug's cost rose by 477 percent from 2012-17. However, a spokesperson for Pfizer said the actual 2017 wholesale acquisition cost for a 100-pill bottle of Nitrostat was $52.19, not $91.76 as the report states. This would make the increase 228 percent over five years, rather than 477 percent. According to CNN, the cost of Zostavax increased 31 percent during the five-year timeframe, making it the studied drug with the lowest increase.

3. Additionally, the report found while 48 million fewer prescriptions were written for the 20 studied drugs over five years, total sales revenue resulting from these prescriptions increased by nearly $8.5 billion from 2012-17.

4. A spokesperson for the Pharmaceutical Research and Manufacturers of America industry group called the report released by Ms. McCaskill "misleading" in a statement to CNN.

"[The report] ignores the robust negotiation that occurs between Medicare Part D plans, middlemen and biopharmaceutical companies," Juliet Johnson, spokesperson for PhRMA, said in the statement. "Negotiated rebates can reduce list prices by as much as 30 to 70 percent for medicines used to treat diabetes, high cholesterol, and chronic respiratory illnesses. Notably, half of the 20 brand medicines in this report are used to treat these chronic conditions."

To read the full report, click here.


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