In less than three weeks, Donald Trump will assume office as the
President of the United States. He has mentioned that he wants Medicare (a
national social insurance program) to directly negotiate the price it pays for prescription drugs.
Medicare provides health insurance to Americans aged 65 or more, who
have worked and paid into the system through the payroll tax. It also provides
health insurance to younger people with some disabilities or end-stage renal
disease and amyotrophic lateral sclerosis.
In 2015, Medicare provided health insurance to over 55 million Americans — including 46 million people aged 65 or more, and nine million younger people.
As we flag off the New Year, PharmaCompass
provides insights into drug prices and prescription patterns in the US in order
to help professionals make informed decisions. We believe that the cost of
medicines in the US, which have been a subject of much public outcry and
discussions in the recent years, will continue to be scrutinized during 2017.
Medicare data for 2014
Medicare Part D, also known as the Medicare prescription drug benefit — the program which subsidizes the costs of prescription drugs and prescription drug insurance premiums for Medicare beneficiaries — published a data set (for calendar year 2014) which contains information from over one million healthcare providers
who collectively prescribed approximately US $121 billion worth of prescription
drugs paid for under this program.
For each prescriber and drug, the dataset
includes the total number of prescriptions that were dispensed (including
original prescriptions and any refills), and the total drug cost.
The total drug cost includes the ingredient cost of the medication, dispensing fees, sales tax, and any applicable administration fees. It’s based on the amounts paid by the Part D plan, the Medicare beneficiary, other government subsidies, and any other third-party payers (such as employers and liability insurers).
The total drug cost does not reflect any manufacturer rebates paid to Part D plan sponsors through direct and indirect remuneration or point-of sale rebates. In order to protect the beneficiary’s privacy, the Centers for Medicare & Medicaid Services (CMS) did not
include information in cases where 10 or fewer prescriptions were dispensed.
Top
Ten Drugs by Cost, 2014 [Most expensive for Medicare]
Drug Name
Total Claim Count
Beneficiary Count
Prescriber Count
Total Drug Cost
Sofosbuvir
109,543
33,028
7,323
$3,106,589,192
Esomeprazole Magnesium
7,537,736
1,405,570
286,927
$2,660,052,054
Rosuvastatin Calcium
9,072,799
1,752,423
266,499
$2,543,475,142
Aripiprazole
2,963,457
405,048
130,933
$2,526,731,476
Fluticasone/Salmeterol
6,093,354
1,420,515
281,775
$2,276,060,161
Tiotropium Bromide
5,852,258
1,211,919
253,277
$2,158,219,163
Lantus
Solostar
(Insulin Glargine)
4,441,782
972,882
224,710
$2,016,728,436
Sitagliptin Phosphate
4,495,964
789,828
190,741
$1,775,094,282
Lantus
(Insulin Glargine)
4,284,173
787,077
223,502
$1,725,391,907
Lenalidomide
178,373
27,142
9,337
$1,671,610,362
View the Medicare Part D National Prescriber Summary Report, Calendar Year 2014 (Excel version available) for FREE!
Top
Ten Drugs by Average Cost per Claim, 2014 [Most expensive drugs]
Drug Name
Total Claim Count
Beneficiary Count
Prescriber Count
Total Drug Cost
Average Cost Per Claim
Adagen
13
$1,224,835
$94,218
Elaprase
100
$6,560,225
$65,602
Cinryze
1,820
194
196
$96,155,785
$52,833
Carbaglu
60
$2,901,115
$48,352
Naglazyme
129
$6,189,045
$47,977
Berinert
538
73
68
$25,685,311
$47,742
Firazyr
1,568
269
232
$70,948,143
$45,248
H.P. Acthar
9,611
2,932
1,621
$391,189,653
$40,702
Procysbi
314
41
47
$12,542,911
$39,946
Folotyn
15
$598,210
$39,881
Top
Ten Drugs by Claims, 2014 [Most Commonly Used by Patients]
Generic Name
Total Claim Count
Beneficiary Count
Prescriber Count
Total Drug Cost
Lisinopril
38,278,860
7,454,940
464,747
$281,614,340
Levothyroxine Sodium
37,711,869
6,245,507
416,518
$631,855,415
Amlodipine Besylate
36,344,166
6,750,062
451,350
$303,779,661
Simvastatin
34,092,548
6,768,159
387,651
$346,677,118
Hydrocodone-Acetaminophen
33,446,696
8,005,790
677,865
$676,296,988
Omeprazole
33,032,770
6,707,964
475,122
$529,050,385
Atorvastatin Calcium
32,603,055
6,740,061
419,327
$747,635,818
Furosemide
27,133,430
5,176,582
456,047
$135,710,772
Metformin HCl
23,475,787
4,509,978
364,273
$203,948,989
Gabapentin
22,143,641
4,298,609
486,754
$492,557,255
View the Medicare Part D National Prescriber Summary Report, Calendar Year 2014 (Excel version available) for FREE!
Top
Ten Drugs by Prescribers, 2014 [Most Popular with Doctors]
Generic Name
Total Claim Count
Beneficiary Count
Prescriber Count
Total Drug Cost
Hydrocodone/Acetaminophen
33,446,696
8,005,790
677,865
$676,296,988
Ciprofloxacin HCl
7,253,018
4,926,835
568,201
$46,728,353
Amoxicillin
6,298,980
4,384,899
557,614
$31,193,739
Cephalexin
5,040,219
3,529,303
557,048
$36,987,401
Azithromycin
7,339,954
5,274,010
544,625
$70,699,119
Prednisone
11,032,986
4,505,821
536,108
$86,537,932
Tramadol HCl
14,250,227
4,272,724
515,816
$125,343,514
Sulfamethoxazole /Trimethoprim
4,833,758
3,090,944
500,790
$29,231,511
Gabapentin
22,143,641
4,298,609
486,754
$492,557,255
Amoxicillin/Potassium Clav
3,551,452
2,710,244
478,361
$61,713,432
The findings from CMS
data
The CY 2014 data represented a 17 percent
increase compared to the 2013 data set and a substantial part of the total estimated prescription drug spending (as estimated by the Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation, or ASPE) in the United States — at about US $ 457 billion in 2015, which was 16.7 percent of the overall personal healthcare services.
Of that US $ 457 billion, US $ 328 billion (71.9 percent) was for retail
drugs and US $ 128 billion (28.1 percent) was for non-retail drugs.
The drug pricing process in the US is complex and
reflects the influence of numerous factors, including manufacturer list prices,
confidential negotiated discounts and rebates, insurance plan benefit designs,
and patient choices.
An IMS study found that across 12 therapy classes widely used in Medicare Part D,
medicine costs to plans and patients in Medicare Part D are 35 percent below
list prices.
View the Medicare Part D National Prescriber Summary Report, Calendar Year 2014 (Excel version available) for FREE!
While the CMS does not
currently have an established formulary, Part D drug coverage excludes drugs
not approved by the US Food and Drug Administration, those prescribed for off-label
use, drugs not available by prescription for
purchase in the US, and drugs for which payments would be available under Parts
A or B of Medicare.
Part D coverage
excludes drugs or classes of drugs excluded from Medicaid coverage,
such as:
Drugs used for anorexia, weight loss, or weight gain
Drugs used to promote fertility
Drugs used for erectile dysfunction
Drugs used for cosmetic purposes (hair growth, etc.)
Drugs used for the symptomatic relief of cough and colds
Prescription vitamins and mineral products, except prenatal vitamins and fluoride preparations
Drugs where the manufacturer requires (as a condition of sale) any associated tests or monitoring services to be purchased exclusively from that manufacturer or its designee
Our view
The Medicare program is designed such that the
federal government is not permitted to negotiate prices of drugs with the drug
companies, as federal agencies do under other programs.
For instance, the Department of Veterans Affairs — which is allowed to negotiate drug prices and establish a formulary — has been estimated to pay (on an average) between 40 to 58 percent less for drugs, as opposed to Medicare Part D.
If Trump administration kick starts direct
negotiations on Medicare drug prices with drug companies, 2017 will surely turn
out to be a year for the pharmaceutical industry to remember.
View the Medicare Part D National Prescriber Summary Report, Calendar Year 2014 (Excel version available) for FREE!