Prices on 200 Drugs Surged 50% in a Year, Medicare Data Show

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By Madi Alexander

Aug. 29 — Medicare Part D prescription drug spending rose 17 percent between 2013 and 2014, with about 200 drug prices rising by more than 50 percent in that time period. The number of claims—each time someone fills or refills a prescription—increased by 3 percent, topping more than 1.4 billion claims in 2014.

Bloomberg BNA analyzed the cost of 2,968 brand-name and generic drugs covered under Medicare Part D between 2013 and 2014. Medicare Part D subsidizes the costs of prescription drugs and prescription drug insurance plans for about two-thirds of Medicare recipients. The program includes about 38 million people and covered $121.4 billion worth of drugs in 2014.The Centers for Medicare & Medicaid Services released the data Aug. 18 (See previous story, 08/19/16).

The soaring cost of prescription drugs has recently sparked outrage among lawmakers, consumers and medical professionals, leading some to call for congressional intervention.

Six of the top 10 most costly drugs in 2014 had double-digit increases in the cost per individual claim.

AstraZeneca’s acid reflux drug Nexium topped the list in terms of cost in 2013, but was bumped to second in 2014 by Gilead Sciences’ Sovaldi—a hepatitis C treatment.

Nexium cost about $352 on average per claim in 2014, up about 14 percent from the previous year. Despite a slight decrease in Nexium claims, Part D paid out $133 million more in 2014 than in 2013. Part D spending on Nexium totaled nearly $2.7 billion in 2014.


Data are not available on cost per dose or cost per pill, nor do the data account for rebates or discounts negotiated between manufacturers and Part D plan sponsors. Bloomberg BNA examined the cost per claim and cost per person of medications, as well as changes in number of claims or individual beneficiaries.

The Pharmaceutical Research and Manufacturers of America (PhRMA), a group that represents name-brand pharmaceutical makers, said Aug. 18 that the Part D data are “misleading” and don't “accurately represent what Medicare pays for prescription drugs” because the data exclude discounts and rebates.

Still, dramatic price hikes likely aren’t substantially offset by discounts and rebates, John Rother, president and CEO of the National Coalition on Health Care (NCHC), told Bloomberg BNA. The NCHC is a nonpartisan nonprofit that includes 80 organizations such as medical societies, businesses, unions, health care providers, insurers and consumer groups.

“Basically the pattern is that if there’s a 50 percent increase in the list price, there’s also a 50 percent increase passed down to the consumer,” Rother said.

PhRMA didn't return a request for comment.

Generic, Branded Drugs Rise in Price

Name-brand medications weren’t the only ones to increase in cost. Generic drugs, which can sometimes have only one U.S. manufacturer, also rose in price.

The generic painkiller combination oxycodone-acetaminophen, for example, more than tripled in cost between 2013 and 2014. The average cost per claim rose to more than $50, up from about $15 in 2013.

Overall Part D spending for oxycodone-acetaminophen rose to $469.8 million from $84.3 million—a difference of $385 million. Claims for the generic painkiller also increased by about two-thirds in 2014 from the year before.

The price of generic anti-depressant drug amitriptyline increased two-fold in price per claim, costing Part D an additional $23.8 million in 2014—nearly double what Part D paid altogether for amitriptyline in 2013. While the drug’s average cost per claim is about $12, there were fewer claims and fewer people taking amitriptyline in 2014.

Vimovo, a branded arthritis pain reliever, rose to $794 from $123 per claim—more than a five-fold jump. Medicare Part D paid out $38.8 million for Vimovo in 2014, up from $7.3 million in 2013, despite an overall decrease in the number of claims between 2013 and 2014.

Horizon Pharma PLC bought the U.S. rights to Vimovo from AstraZeneca in late 2013 and began marketing the drug a few months after. AstraZeneca’s net revenue for Vimovo was $25.2 million in 2012, according to securities filings. Horizon Pharma’s net revenue for Vimovo was $166.7 million in 2014.

A spokesman for Horizon Pharma said in an e-mail that 66 percent of Part D claims for Vimovo had a copayment of $25 or less in 2014. Horizon didn't comment on what drove up Part D spending on Vimovo by more than 400 percent.

The cost per claim for Targretin, a brand-name skin cancer drug, more than doubled—up to more than $16,000 from about $7,300 per claim. Valeant Pharmaceuticals International, Inc. acquired the U.S. rights to Targretin for $65 million from Eisai Inc. in February 2013.

Valeant didn't return a request for comment.

Big Pharma Under Fire

Pharmaceutical companies have recently been the subject of criticism for what some are calling unnecessary price hikes.

Sen. Chuck Grassley (R-Iowa), chairman of the Judiciary Committee, sent a letter Aug. 22 to Mylan Pharmaceutical Inc. asking for details about the pricing of its epinephrine auto-injector, EpiPen.

Grassley said the 400-percent rise in cost since 2007 “has caused significant concern among patients.” He requested information on Mylan’s cost analysis for the EpiPen, along with information on Mylan’s advertising budget and patient assistance programs.

Democratic presidential nominee Hillary Clinton also criticized Mylan for hiking the price of its EpiPen, calling the move “outrageous” and “troubling.”

Medicare Part D paid about $268 per claim for a two-pack of EpiPen injectors in 2013. The cost per claim rose to $357 in 2014—an increase of about 33 percent. Part D spending on the EpiPen two-packs jumped to $87.5 million in 2014 from $62.2 million the previous year.

A two-pack of EpiPen contains about $1 worth of epinephrine.

Drug Discounts

Mylan announced Aug. 25 that it would be doubling the eligibility for its patient assistant program, though the drug maker has not lowered the overall list price of EpiPen.

The company also said it would reduce EpiPen’s patient cost by offering a savings card, which will cover up to $300 of the $600 cost, to people who had previously been paying the full list price.

Sen. Susan Collins (R-Maine), chairman of the Senate Special Committee on Aging, issued a statement Aug. 25 criticizing Mylan’s decision to issue discount cards instead of lowering the price.

“While patient assistance programs help some consumers afford the skyrocketing prices of drugs like the EpiPen, they do not assist anyone who participates in government health care programs like the Children's Health Insurance Program (CHIP,) Medicaid, Medicare, and other federal health insurance programs,” she said in the statement.

One limitation keeping drug manufacturers from offering discounts to people in federal insurance programs is the anti-kickback statute, which prohibits companies from offering coupons to use for drugs paid for by Medicare or Medicaid.

Copay coupon cards are only available to patients with non-government insurances plans, which discourages the use of high-cost brand drugs over less expensive generics. But even if Medicare and Medicaid patients were eligible for copay coupons on name-brand drugs, Rother said they likely wouldn’t help everyone who has to pay a high copay.

“Very few people get help through patient assistance programs,” he said. “In theory they’re a good way to help people, but they reach very few people.”

To contact the reporter on this story: Madi Alexander in Washington at

To contact the editor responsible for this story: Kendra Casey Plank at

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