Spending increases in Medicare's Part D program appear to be due to a single force: A recently introduced class of drugs to fight hepatitis C.
Medicare spending to combat that disease reached $4.5 billion last year--a more than 15-fold increase in expenditures compared to the $286 million that was spent in 2013, according to an article by the nonprofit group ProPublica, which noted that the spending is unlike anything Part D has seen before.
It also dwarfed the $1.2 billion spent by state drug programs on hepatitis C during the first nine months of 2014. Medicare will pay for the treatment if it's considered medically necessary and has been approved by the Food and Drug Administation.
Private payers were more grudging in their coverage, providing the medications only when the patient had advanced liver disease, according to the article.
Gilead distributes most of the treatments for hepatitis C in the form of two drugs, Harvoni and Sovaldi. Gilead charges about $1,000 per pill, and treatment requires a 12-week regimen. The medicine cures hepatitis C more than 90 percent of the time, but the pharmaceutical giant has come under pressure to lower its prices.
"This spike in hep C-related costs is not a blip. It's a harbinger for a developing and unsustainable trend in system-wide drug spending. Specialty pharmaceuticals, once used to treat rare conditions, are now becoming common treatments for far more prevalent chronic conditions like diabetes and cancer," said John Rother, chief executive officer of the National Coalition on Health Care, in a statement. That organization launched the Campaign for Sustainable Drug Pricing last year in an attempt to keep rising drug costs in check.
However, some clinicians note that the benefits of the new drugs far outweigh their costs.
"Curing hepatitis C will likely go on to prevent liver cancer, go on to prevent patients needing liver transplantation, go on to save healthcare dollars down the road. It's upsetting that there's been so much negative publicity for such a positive breakthrough in medicine," Adam Peyton, M.D., a liver specialist at the University of Miami Health System in Florida, told the publication. He spent $13.5 million on hepatitis C prescriptions for his patients last year.