New Medicare data show steep increases in drug prices

By Shelby Livingston and Art Golab | December 7, 2016
The CMS on Wednesday released data on the price history of 5,000 prescription drugs over five years, shedding light on the fastest rising source of healthcare costs in recent years.

“The reason it’s important is not to use it as a cudgel, but to get away from the world of anecdotes” surrounding drug price hikes, Andy Slavitt said Wednesday during Modern Healthcare’s 2016 Leadership Summit in Chicago.

The drug with the biggest rise in cost per unit in Medicare Part D from 2014 to 2015 was Losartan potassium, a generic version of antihypertensive drug Cozaar, which rose 491% in price to the weighted average cost per unit of $3.22 in 2015 from $1.55 in 2014.

The change in average cost per unit is weighted at the brand and generic level so percent changes don’t manually add up, the CMS noted. The agency also noted that the Part D data don’t reflect manufacturer rebates and other price concessions, which the government is prohibited from disclosing.

The cost of carbamazepine, a generic version of anticonvulsant drug Epitol, jumped 451% to $0.52.

In third place was lisinopril, the generic of ACE inhibitor Zestril, which rose 405% to an average cost per unit of $7.44.

Beta-blocker Atenolol, the generic of Tenormin, soared 383% to $7.78 in 2015.

And fifth, anti-diabetic drug metformin HCL, the generic of Glumetza, rose 381% to $39.10 in 2015.

According to a preliminary analysis of the data by Modern Healthcare, the average price of all Part D drugs sold in both 2015 and 2011 went up 83.6%. For the most common drugs, however—the ones prescribed to more than 4 million beneficiaries in both 2015 and 2011— prices decreased 23.6%. For the drugs that accounted for the most Part D spending—at least $1 billion in both 2015 and 2011—prices increased 59.1%.

The prices for many inexpensive drugs, both common and obscure, went up by more than 1,000%. For example, the average cost of the asthma drug mannitol shot up more than 2,000% over the five-year span, from 3 cents per unit to 74 cents per unit.

In the Medicare Part B program, which pays for drugs administered in outpatient settings and physician offices, the fastest risers in cost from 2014 to 2015 are primarily injections.

Cancer drug mitomycin, grew the fastest at 163% to an average of $58.07 per unit, the CMS data shows. Next, aminophyllin, a bronchodilator, rose 115% to $4.97 in 2015.