A report from the Office of the Inspector General finds the following:
- Total reimbursement for all brand name drugs in Part D increased 77 percent from 2011 to 2015, despite a 17 percent decrease in the number of prescriptions for these drugs.
- After accounting for manufacturer rebates, reimbursement for brand name drugs in Part D still increased 62 percent from 2011 to 2015.
- Part D unit costs for brand name drugs rose nearly 6 times faster than inflation from 2011 to 2015.
- The percentage of beneficiaries responsible for out of pocket costs of at least $2,000 per year for brand name drugs nearly doubled across the 5-year span.
WHAT WE CONCLUDE
Our findings show that although there were fewer prescriptions for brand name drugs in 2015 than in 2011, increases in Part D unit costs for brand name drugs led to greater overall Medicare Part D spending and higher beneficiary out of pocket costs for these drugs. Generally, plan sponsors base their reimbursement amounts on the prices that manufacturers set for their drugs. Therefore, 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.
The complete report can be seen online: https://oig.hhs.gov/oei/reports/oei-03-15-00080.asp