Jun 16, 2021 - Health

Higher prices drove up Medicare drug spending, advisers say

A white Eliquis box with yellow Eliquis tablets spread out underneath the box.
Medicare spent $7.3 billion on blood thinner Eliquis in 2019, before rebates. Photo: Daniel Acker/Bloomberg via Getty Images

The amount Medicare spent on drugs that are dispensed at pharmacies increased 26% from 2013 through 2018, members of the Medicare Advisory Payment Commission wrote in their new annual report.

Why it matters: MedPAC members put the spotlight on pharmaceutical companies, attributing "nearly all of the growth ... to higher prices rather than an increase in the number of prescriptions filled by beneficiaries."

Between the lines: Medicare Part D plans, which are operated by health insurers and pharmacy benefit managers, say they save taxpayers money by negotiating rebates and discounts from drug manufacturers in exchange for putting drugs on their approved coverage lists.

  • And drug companies say the volume of prescriptions often leads to bigger spending totals.

Yes, but: Rebates and prescription fill rates did not offset the price growth, which MedPAC members said was due to "both higher prices of existing products and high launch prices of new drugs." A new Health Affairs study also said a large share of Medicare drug spending is going toward "ultra-expensive" drugs.

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