Dive Brief:
- The Centers for Medicare and Medicaid Services on Tuesday released new data on Medicare and Medicaid drug spending, updating a database that offers a rare look into annual growth rates of prices for prescription medicines.
- Originally established under the Obama administration, CMS' drug spending "dashboard" details how much the government pays for medicines through Medicare Part B and Part D, and whether the list prices for those drugs has risen over time.
- The timing of the update is no coincidence, coming days after President Donald Trump unveiled his long-awaited plan to rein in increasing drug prices. While critics argue few actions in the plan will have an immediate impact, the administration appears ready to use its bully pulpit to publicly call out drugmakers.
Dive Insight:
President Trump has spent over a year criticizing drugmakers for rising prescription drug costs, famously calling out pharma companies for "getting away with murder" in January of 2017. But that had translated into little action until Friday's unveiling of his drug pricing plan.
While the speech — and subsequent comments from other government officials — put rising prices front and center, investors saw little to fear immediately. Shares in biotech and pharmaceutical companies rose just after Trump's speech, in fact, as the president's "blueprint" didn't propose drastic changes to the current system.
Changing how Medicare Part D pays for drugs by expanding the negotiation powers used in Part B could eventually have a real impact, as could reworking the role played by rebates and discounts in the commercial market.
In the short-term, though, drugmakers might feel the most heat from moves aimed at calling public attention to sharp price hikes.
"I can imagine [Donald Trump] is going to be very interested in the next company that takes a price increase not justified by inflation or change in clinical benefit," Department of Health and Human Services Secretary Alex Azar said in a May 14 speech. "I can tell you I wouldn't have wanted to be the one to do that."
CMS' Drug Pricing Dashboard accomplishes much the same goal, just in a less attention-grabbing manner than presidential tweeting. (It's worth nothing, however, that the database had not been updated under President Trump until now.)
Select drugs with high annual increases in spending, Medicare Part B
Drug | Maker | Annual growth rate (2012-2016)* | Avg. monthly spending per beneficiary (2016) |
---|---|---|---|
Orencia (abatacept) | Bristol-Myers Squibb | 17.2% | $2,136 |
Neulasta (pegfilgrastim) | Amgen | 8.5% | $1,195 |
Xolair (omalizumab) | Roche | 8.0% | $1,821 |
Fluzone high-dose (vaccine influenza injection muscle) | Sanofi | 6.9% | N/A |
Sandostatin LAR (octreotide acetate) | Novartis | 6.8% | $3,202 |
*Annual growth rate in spending per dosage unit. SOURCE: CMS Drug Spending Dashboard
In a statement, CMS specifically called out 22 drugs, which had seen particularly steady list price increases between 2012 and 2016.
Bristol-Myers Squibb's autoimmune disease drug Orencia led the way among Part B drugs selected by the agency, while prices of several blockbuster biologics made by Merck & Co., Amgen and AbbVie rose by more than 18% a year during the five-year span.
There is no clearer example of why reform is needed then when our Drug Pricing Dashboards show examples of increases that are double-digit, triple-digit and even quadruple-digit increase. #PQAannual
— Administrator Seema Verma (@SeemaCMS) May 16, 2018
Select drugs with high annual increases in spending, Medicare Part D
Drug | Maker | Annual growth rate (2012-2016)* | Avg. monthly spending per beneficiary (2016) |
---|---|---|---|
Renvela (sevelamer carbonate) | Sanofi | 21.6% | $630 |
Lantus (insulin glargine) | Sanofi | 18.6% | $209 |
Zetia (ezetimibe) | Merck & Co. | 18.3% | $181 |
Enbrel (etanercept) | Amgen | 18.2% | $2,741 |
Humira (adalimumab) | AbbVie | 18.0% | $2,835 |
*Annual growth rate in spending per dosage unit. SOURCE: CMS Drug Spending Dashboard
The dashboard has its limits. Only list prices are documented, as CMS is prohibited from publicly disclosing manufacturer rebates. And, despite comments from CMS Administrator Seema Verma, the database's format is better suited for researchers than it is for consumers.
Other actions are coming, though. On Thursday, the Food and Drug Administration plans to launch a website designed to put on notice branded drugmakers who block competition by limiting access to samples generic drugmakers need to develop copies.