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Medicare Drug Spending Dashboard

Date
2015-12-21
Title
Medicare Drug Spending Dashboard
Contact
go.cms.gov/media

Medicare Drug Spending Dashboard
Fact Sheet

Prescription drugs are a major contributor to improving patient health as well as a major driver of health care spending. Spending on prescription drugs in the U.S. grew by 12 percent in 2014, faster than in any year since 2002. The Centers for Medicare & Medicaid Services (CMS) is one of the largest purchasers of prescription drugs in the US.

As part of its effort to provide additional information, increase transparency, and address the affordability of prescription drugs, CMS is releasing a new online dashboard to look at Medicare prescription drugs for both Part B and Part D. These categories include drugs with high spending on a per user basis, high spending for the program overall, and those with high unit cost increases in recent years. CMS intends to update this list on a regular basis and release a similar list for Medicaid next year.

To create this list, CMS identified 80 drugs using 2014 data that met the criteria described below: 40 drugs provided through the Medicare Prescription Drug Program under Part D and 40 drugs administered by physicians and other professionals in the Medicare fee-for-service program under Part B. Products have been selected from each respective program area based on the following criteria:

  1. the drug is ranked in the top 15 in terms of total program spending (for either Part B or D);
  2. the drug is associated with a high annual per user spending based on claims data analyses (e.g., greater than $10,000 per user) and is ranked in the top 15 by overall program spending (if a drug already is selected based on (a) it is not eligible to be selected based on (b) criteria); or
  3. the drug is ranked among the top 10 high unit cost increases (if a drug already is selected based on (a) or (b) it is not eligible to be selected based on (c) criteria).

For all drugs included on the list, CMS displays relevant spending, utilization, and trend data and also includes consumer-friendly information on the drug product descriptions, manufacturer(s), and clinical indications. CMS is prohibited from publicly disclosing information on manufacturer rebates, thus the data used to select Part D drugs do not reflect any manufacturers’ rebates or other price concessions.  

One use of this list is to make the trends related to drug spending for beneficiaries and for the programs administered by CMS transparent to providers, consumers and the public. The relatively small set of medications presented as part of this dashboard represents a very large proportion of program spending, including 33 percent of all Part D spending and 71 percent of Part B drug spending in 2014. In addition to the goal of transparency and the potential use of the information to educate the public, the data can be used to spur research and public discussion of how these drug products are being used in Medicare and how they are affecting beneficiary costs.

Part D Dashboard Summary, CY2014.

  # of Drug Products* Total Program Spending Percent of Program Spending
All Drugs 3,761 $121.5B 100%
All Drugs with High Total Program Spending (>$250M) 115 $76.7B 63%
     Top 15 Program Spending Drugs 15 $29.1B 24%
All Drugs with High Per-User Spending (>$10K) 267 $26.2B 22%
     Top 15 Drugs with High Per-User Spending 15 $9.3B 8%
All Drugs with Large Unit Cost Increases (>25%) 540 $13.7B 11%
     Top 10 Drugs with Unit Cost Increases 10 $1.3B 1%
All Drugs Included in Dashboard 40 $39.7B 33%

* Drug Products defined by distinct Brand Name and Generic Name (First Databank), excluding over the counter drugs.

Part B Dashboard Summary, CY2014.

  # of Drug Products^ Total Program Spending Percent of Program Spending
All Drugs 606 $21.5B 100%
All Drugs with High Total Program Spending (>$250M) 21 $12.8B 60%
     Top 15 Program Spending Drugs 15 $11.5B 53%
All Drugs with High Per-User Spending (>$10K) 107 $12.4B 58%
     Top 15 Drugs with High Per-User Spending 15 $3.3B 15%
All Drugs with Large Unit Cost Increases (>10%) 96 $1.3B 6%
     Top 10 Drugs with Unit Cost Increases 10 $0.6B 3%
All Drugs Included in Dashboard 40 $15.4B 71%

^ Drug Products defined by Healthcare Common Procedure Coding System (HCPCS) codes for products with a manufacturer reported Average Sales Price (ASP) and Part B oral cancer drugs (these drugs are not are not included in the ASP).

Trend Charts and Analyses
Charts 1a and 1b below show the trend in total drug spending for the five drugs with the highest Part D and Part B drug spending in 2014, respectively. The top Part D drugs with highest total spending were Abilify, Advair Diskus, Crestor, Nexium, and Sovaldi. All of these drugs had total drug spending greater than $2 billion in 2014, and with the exception of Sovaldi, which was introduced in 2013, these drugs had annual total program spending greater than $1 billion for the past 5 years. The top five Part B drugs with highest total spending were aflibercept, ranibizumab, pegfilgrastim, imfliximab, and rituximab. Each of these drugs contributed more than $1 billion in spending for the Medicare Part B program.

Chart 1a. Trends in Medicare Part D Total Spending for the Top 5 Drugs in 2014.

Chart 1b. Trends in Medicare Part B Total Spending for the Top 5 Drugs in 2014.

Charts 2a and 2b below show the top five drugs with the largest increases in average cost per unit from 2013 to 2014 in the Part D and Part B programs, respectively. The average cost per unit for Vimovo, a prescription form of the pain reliever naproxen, increased from $1.94 to $12.46 – an increase of more than 500percent in the average Part D cost per unit. All five of these Part D drugs had increases in cost per unit of more than 100percent. Among Part B drugs, the medication Cyanocobalamin, an injection of Vitamin B-12, had the largest increase in the average Part B cost per unit at 78 percent.

Chart 2a. Medicare Part D Drugs with Large Increases in Cost per Unit, 2013 to 2014. 

Chart 2b. Medicare Part B Drugs with Large Increases in Spending per Unit, 2013 to 2014.

Charts 3a and 3b below display total annual spending per user by total spending for Part D and Part B drugs, respectively, in 2014. Larger bubbles indicate more beneficiaries utilize the drug. The Part D drug, Humira (used to treat rheumatoid arthritis), had more than 50,000 beneficiaries using it in 2014, with total annual Part D spending per user of approximately $24,000 and total spending of $1.2 billion. In comparison, about 33,000 beneficiaries were using Sovaldi (used to treat Hepatitis C infections) with total annual spending per user of $94,000 and total Part D spending of $3.1 billion. Among Part B drugs, ranibizumab (brand name Lucentis, used to treat macular degeneration symptoms) had 141,606 beneficiaries using the drug in 2014, costing $9,401in total annual spending per user and total Part B spending of $1.3 billion.

Chart 3a. Annual Spending per User by Total Spending for Medicare Part D Drugs: 2014.

Chart 3b. Annual Spending per User by Total Spending for Medicare Part B Drugs: 2014.

FAQ

1.  Does this dashboard tell you what Medicare prescription drug plans paid to pharmacies for drugs?
Answer: Yes - it provides the amount paid by all plans in aggregate, but not by individual plan.

2.  Does this dashboard tell you what Medicare paid to physician offices, hospital outpatient departments, and other suppliers for Part B drugs?
Answer: Yes - it provides the amount paid to these providers in aggregate, but not by individual provider.

3.  Does this dashboard tell you the total amount Medicare spent on a drug net of all price concessions?
Answer: No – any rebates or indirect payments from manufacturers to Part D plan sponsors (or to purchasing intermediaries in Part B) are not reflected in the payment amounts displayed on the dashboard. While CMS has information on rebates and indirect remuneration, the law prohibits CMS from publicly releasing it. Including rebate information in the drug selection process would not substantially change the composition of the medications included.

4.  Does this dashboard tell you how much a physician office or hospital pays to acquire a medication (from a distributor or purchasing organization)?
Answer: No
– the Part B data reflect Medicare payments to physicians and hospitals. Most Part B drug payments are based on the ASP methodology, which by law is determined using manufactures’ sales prices to all purchasers. Although the ASP is net of price concessions, the ASP payment limits used in part B do not necessarily reflect the final price physicians or other providers pay for drugs, particularly for providers who purchase drugs from sources other than manufacturers.

The most recent (CY2016) ASP drug pricing files are available in the related links section of the following CMS webpage: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/2016ASPFiles.html. The payment limits are updated quarterly. Older price files are also available via links on the webpage.  

5.  Does this dashboard tell you anything about beneficiary cost sharing payments?
Answer: Yes
– Average beneficiary cost sharing is displayed separately for beneficiaries with and without the low-income subsidy in Part D.

6.  Does this dashboard tell you how much a drug costs for every beneficiary?
Answer: No
– Part D cost sharing for any particular beneficiary will depend on the exact plan in which the beneficiary is enrolled. While generally Part B cost sharing is 20 percent of the Medicare allowed amount, it also will depend on any supplemental insurance the beneficiary holds.

7.  Is the total drug spending amount what a Medicare beneficiary actually pays?
Answer: No – The total drug cost includes the amounts paid by the Medicare Part B or Part D programs as well as Medicare beneficiary payments, government subsidies, or any other third-party payers. Part D drug costs do not reflect any manufacturers’ rebates or other price concessions.

8.  Does this dashboard tell you anything about the performance of pharmacy benefit managers or health plans in negotiating rebates or managing utilization?
Answer: No

9.  Does the dashboard tell you about spending by Medicaid, the VA, or commercial payers on these medications?
Answer: No

Input
CMS is reviewing these medications to better understand the characteristics of their use in the Medicare population. We welcome input from physicians, pharmacists, patients, manufacturers, researchers, and others to inform our understanding. CMS asks input from external partners for with insight and analysis to help us understand how drug these products are being used in the Medicare population, and to provide feedback to help make sure patients are getting the best value from these important therapies. To that end CMS has established an email box to receive comments from all interested parties: druglistinput@cms.hhs.gov. CMS is particularly interested in comments regarding the value of information contained in the list; gaps in clinical knowledge about products on the list; and other types of information CMS and others could release that would support improved public understanding of the use and value of medications in Medicare and other health insurance programs.   

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