Drug Prices Have Increased Faster Than Inflation for 50% of all meds Drugs Covered by Medicare
Fact, the goal of the Build Back Better Act (BBBA) has stalled in the Us Congress and House. However, the people’s demand for legislation to lower prescription drug costs is not going to go way. More so, current worries of inflation has taken hold. The House-passed BBBA would allow the federal government to negotiate cheaper medication prices in Medicare. In addition, the BBBA would also cap Medicare beneficiaries’ out-of-pocket drug costs. This would fall under Part D. In addition, it would also cap monthly insulin costs. Furthermore, it would make drug companies pay rebates to the federal government. To sum up, when annual increases( inflation) in drug prices for Medicare and private insurance exceed the annual CPI (consumer Price Index).
Sponsored By Med-Q Mediction Compliance Systems
Price Increases were higher than Inflation for 50% of Drugs Covered by Medicare in 2021
Half of all Part D covered drugs (51 percent of 3,433 drugs) and nearly half of all Part B covered drugs (49 percent of 570 drugs) had price their prices raised higher than inflation between July 2020 and July 2021, which was .98%.
Among the 1,986 Medicare-covered drugs with price increases above the rate of inflation in 2020, one-third (670 pills) had price increases of 7.3 percent. This was way more than the current annual CPI increase.
The key prescription drug proposals included in the BBBA would:
- Allow the federal government to negotiate prices for some high-cost drugs covered under Medicare Part B and Part D
- Require inflation rebates to limit annual increases in drug prices in Medicare and private insurance
- Cap out-of-pocket spending for Medicare Part D enrollees and other Part D benefit design changes
- Limit cost sharing for insulin for people with Medicare and private insurance
- Eliminate cost sharing for adult vaccines covered under Part D
- Repeal the Trump Administration’s drug rebate rule
The Congressional Budget Office estimates a net federal deficit reduction of $83.6 billion over 10 years (2022-2031) from the drug inflation rebate provisions in the BBBA for Medicare and private insurance. Actual savings would depend in part on the degree to which drug price increases exceed the inflation rate. In periods when inflation is running low, as it was in 2019-2020, even relatively modest drug price increases would trigger inflation rebates. But in periods of high inflation, as it is currently, only more sizable drug price increases would trigger rebates. In the absence of Congressional action on prescription drug proposals, rising drug prices are likely to continue to pose affordability challenges for many people.
Among drugs covered under Part D, 15 percent, had price increases of over 7.5 percent. In addition, between 2020 and 2021. 12 percent, over 1,100 drugs, had price increases above the rate of inflation but below 7. 7 percent. In addition, 4.9 percent (293 drugs) had price increases below inflation. And 42.7 percent (1,455 pills) had price reductions. Remember, for medications to work, they must be taken as prescribed. A Med-Q pill box with alarms is Americas #1 pill dispenser with triple alarms. Prevents over dosing and forgetting.
For Part B drugs, 17.5% (112 drugs) had price increases of over 7% . This is even more between 2019 and 2020. Fact, 31% (169 medications) had price increases above inflation. However, it was styill below 7.5%. A 6.45 percent had price increases below inflation. Finally, they remaining 45% (283 drugs) had small price decreases.
Across all Part D drugs with price increases greater than inflation, the median price increase was 5.6%; for Part B, the median price increase was 5.4%.
Prices Rose Faster Than Inflation for the 20 Top-Spending Drugs . This price increase will apply to in Both Part B and Part D in 2020
In terms of drugs with the highest total spending, 22 of the top 26 Part D drugs and 17 of the top 26 Part B drugs had price increases well above inflation
Figure 2: Price Increases for the Top 20 Medicare Part D and Part B Drugs by Total Spending in 2020
Among the 25 drugs covered by Medicare Part D with the highest total gross spending (not accounting for rebates). Over 25 percent had price increases greater than inflation in 2020. This includes the top 3 drugs by total spending in 2020. For excample, Eliquis, a blood thinner used by almost 3 million Americans were hit with a 6.1% price increase. Another example, Revlimid. Taken for multiple myeloma. Used by nearly 45 thousand people. This had a 6.7 percent cost increase. Anotyhe example is Xarelto. Thjis is a blood thinner used by 1.45 million Americans. This had a 4.25 percent increase.
Among the 25 drugs covered by Medicare Part B with the highest total spending, 16 had price increases greater than inflation in 2020 (Table 2). This includes 2 of the top 3 drugs by total spending in 2020: Keytruda, a cancer treatment used by nearly 59,000 beneficiaries in 2020, with a 3.3% price increase in 2020; and Prolia, a treatment for osteoporosis used by nearly 600,000 beneficiaries in 2020, with a 4.7% price increase in 2020.
While drug price inflation based on changes in spending per dosage unit may appear relatively modest in dollar terms for many of the top spending drugs, administration or use of most of these drugs requires multiple dosage units. This means that a relatively small price change per dosage unit can translate to a large change in overall spending per claim.
- For example, the $50 increase (6.5%) in the average spending per dosage unit for Revlimid translates to an increase of more than $1,000 per claim (from $15,178 in 2019 to $16,237 in 2020) and nearly $12,000 in higher total costs per user in 2020 compared to 2019 (from $110,713 to $122,432). (Although these total spending amounts for Part D drugs do not account for rebates, for many higher-cost specialty drugs with less competition, like Revlimid, rebates are likely to be quite low.)
- Similarly, while the price per dosage unit for the Part B drug Keytruda increased by only $1.44 (3.3%) between 2019 and 2020, from $43.87 to $45.31, this price increase contributed to an increase of nearly $750 in average spending per claim (from $9,102 in 2019 to $9,843 in 2020) and an increase of nearly $6,000 in average spending per user (from $53,745 in 2019 to $59,642 in 2020).
Annual increases in drug price increases can translate to higher Medicare spending and higher out-of-pocket drug costs by patients. Higher out-of-pocket spending occurs when beneficiaries are required to pay coinsurance, or a percent of the drug’s price – which is common for many brand-name Part D drugs and standard for all Part B covered drugs in the form of a 20% coinsurance requirement.
