Medicare Part D spending spikes 77% even with prescriptions down 17%

Prescription Drugs and Money image
Despite a decrease in prescriptions, Medicare Part D spending for brand-name drugs is up big time. (TaxRebate.org.uk)

Medicare spending and out-of-pocket costs on brand-name drugs is up despite a decrease in prescriptions, a government watchdog says.

The Department of Health and Human Services' Office of Inspector General found (PDF) that Medicare spending on brand-name drugs jumped 77% from 2011 to 2015. That spike in spending occurred even with a 17% decrease in prescriptions for such drugs. 

Part D spending accelerated six times faster than inflation, the OIG also found. A report released earlier this year by Sen. Claire McCaskill, D-Mo. showed brand-name drug prices have jumped by 12% each year from 2012 to 2017. 

"Generally, plan sponsors base their pharmacy reimbursement amounts on the prices that manufacturers set for their drugs," the watchdog said. "Increasing manufacturer prices for brand-name drugs may result in increasing costs for Medicare and its beneficiaries, especially those beneficiaries who need access to expensive maintenance drugs."

RELATED: Consumers could get dinged by Trump's Part D push

After accounting for manufacturer rebates, the watchdog found that brand-name drugs still increased by 62% during the same time frame. 

Consumers have also felt the pinch of higher costs in their wallet. 

The number of people who paid more than $2,000 in out-of-pocket costs nearly doubled during the five-year period, according to the OIG.

The report comes as the Trump administration attempts to tackle high drug prices, which could include pushing some Part B drugs into Part D. Recent analysis found that policy change could mean higher out-of-pocket spending for beneficiaries. 

Suggested Articles

Once flu season begins, Americans will be confronted with two contagious viruses simultaneously. Flu vaccinations are more important than ever before.

We take a look back at health insurers' financial performance, including soaring profits, in Q2.

Employment growth in the healthcare industry cooled off in July as the sector added fewer jobs than in June as COVID-19 continues to spread.