CMS Publicizes Costliest Increases for Medicare, Medicaid Drugs

Kerry Dooley Young

May 17, 2018

Medicare and Medicaid have faced persistent double-digit increases in the prices for blockbuster insulin products, as well as notable jumps in the cost of other well-established medicines, including biotech drugs approved in the late 1990s, according to a federal database.

The US Department of Health and Human Services (HHS) on Tuesday posted data for drug spending in Medicare Part B and Part D programs and Medicaid, offering researchers and the public an easy way to study the costs of specific medicines. The new information posted by Centers for Medicare & Medicaid Services (CMS) dates to 2016, when Medicare spent $174 billion, or 23% of the program's budget, on prescription drugs. That is a large increase from 2012, when Medicare spent $109 billion, or 17% of its total budget, on these medicines, CMS said.

"Publishing how much individual drugs cost from one year to the next will provide much-needed clarity and will empower patients and doctors with the information they need," said CMS Administrator Seema Verma in a statement. "As [HHS] Secretary [Alex] Azar has repeatedly pointed out, for years Medicare incentives have actually encouraged higher list prices for drugs, and this updated and enhanced dashboard is an important step to bringing transparency and accountability to what has been a largely hidden process."

In its press release, CMS included examples of some of the most commonly used drugs in Medicare Part B, Part D, and Medicaid. Examples included drugs for which prices had increased at least 5% annually from 2012 to 2016 in Part B and at least 10% annually in Part D and Medicaid.

Table 1. Medicare Part B

  Brand Name Generic Name Annual Growth Rate (2012 - 2016) Average Monthly Spending Per Beneficiary in 2016 Manufacturers
1 Orencia* Abatacept* 17.2% ($22 to $41) $2136 BMS Primarycare
2 Neulasta Pegfilgrastim 8.5% ($2788 to $3869) $1195 Amgen
3 Xolair Omalizumab 8.0% ($22 to $30) $1821 Genentech, Inc.
4 Vaccine Influenza Injection Muscle (Fluzone High-Dose)   6.9% ($30 to $39) N/A  
5 Sandostatin Lar* Octreotide Acetate, mi-Spheres* 6.8% ($123 to $160) $3202 Novartis
6 Prevnar 13 Pneumococcal 13-Valent Vaccine 6.1% ($132 to $167) N/A Wyeth Pharm
7 Remicade Infliximab 6.0% ($63 to $80) $1910 Janssen Biotech
8 Rituxan Rituximab 5.6% ($615 to $765) $1985 Genentech, Inc.
*Multiple brand and/or generic names for a specific HCPCS code.
Brand/generic names unavailable. Name reflects the HCPCS short description.

Table 2. Medicare Part D

  Brand Name Generic Name Annual Growth Rate (2012 - 2016) Average Monthly Spending Per Beneficiary in 2016 Manufacturers
1 Renvela Sevelamer Carbonate 21.6% ($3 to $6) $630 Genzyme
2 Lantus Insulin Glargine, Hum.Rec.Anlog 18.6% ($13 to $25) $209 Sanofi-Aventis
3 Zetia Ezetimibe 18.3% ($5 to $9) $181 Merck Sharp & D
4 Enbrel Etanercept 18.2% ($498 to $972) $2741 Amgen
5 Humira Pen Adalimumab 18.0% ($1019 to $1976) $2835 AbbVie US LLC
6 Lyrica Pregabalin 17.4% ($3 to $6) $205 Pfizer US Pharm
7 Lantus Solostar Insulin Glargine, Hum.Rec.Anlog 14.2% ($14 to $25) $196 Sanofi-Aventis
8 Crestor Rosuvastatin Calcium 13.2% ($5 to $8) $124 AstraZeneca
9 Januvia Sitagliptin Phosphate 12.7% ($7 to $12) $235 Merck Sharp & D
10 Xarelto Rivaroxaban 10.6% ($8 to $12) $202 Janssen Pharm
11 Eliquis Apixaban 10.4% ($4 to $6) $194 BMS Primarycare

 

Table 3. Medicaid

  Brand Name Generic Name Annual Growth Rate (2012 - 2016) Manufacturers
1 Lantus Insulin Glargine, Hum.Rec.Anlog 18.7% ($13 to $25) Sanofi-Aventis
2 Latuda Lurasidone HCl 18.6% ($17 to $33) Sunovion Pharma
3 Lyrica Pregabalin 17.9% ($3 to $6) Pfizer US Pharma
4 Enbrel Etanercept 17.6% ($487 to $933) Amgen
5 Humira Pen Adalimumab 17.5% ($1007 to $1919) AbbVie US LLC
6 Lantus Solostar Insulin Glargine, Hum.Rec.Anlog 14.3% ($15 to $25) Sanofi-Aventis
7 Abilify Aripiprazole 11.4% ($21 to $32) Otsuka America
8 Vyvanse Lisdexamfetamine Dimesylate 11.0% ($5 to $8) Shire US Inc.
Source: CMS

Insulin Price Rises in the Spotlight

HHS Secretary Azar brings a rare understanding of the mechanics of drug pricing to his work at HHS from his time at Eli Lilly & Co, a drugmaker that pioneered insulin sales in the United States. Lilly began marketing insulin in 1923 with an animal-derived insulin. It then brought a biotech version to market in 1982 and introduced a fast-acting insulin in 1996.

Despite this long history of US sales, insulin stands out for notable price increases in the dashboard for Medicare Part D pharmacy plans and Medicaid.

Last week, the Senate held a hearing on the high price of insulin.

CMS highlighted the increase from 2012 to 2016 for Lantus (insulin upglargine), a blockbuster product sold by Lilly rival Sanofi-Aventis. Lantus Solostar is one of Medicare Part D's top expenses, with the dashboard showing 2016 sales of $2.53 billion. More than 1.07 million people who were enrolled in Part D used the drug.

In its press release, CMS noted the 18.6% increase in the annual growth rate in Medicare Part D for Lantus. CMS shows a slightly lower rate, 14.2%, for a newer version of the insulin injection, Lantus Solostar, during this period. There were similar increases reported during this time for Medicaid, CMS said. That trend, though, reversed from 2015 to 2016, with the Part D dashboard showing a 0.40% decrease in the average spending per dosage unit of both forms of Lantus.

The CMS press release did not note the similar — and continuing — increase for the prices for certain Lilly insulin products, but the CMS dashboard did.

There was a 12.7% increase, for example, in the average spending per dosage unit from 2015 to 2016 for Humalog (insulin lispro), Lilly's largest-selling insulin product, with a total increase of 16.3% from 2012 to 2016. The increases for Humalog in Medicaid spending were similar.

Medscape Medical News asked HHS whether Azar, who, according to his official biography, was president of Lilly USA LLC from 2012 to 2017, would like to comment on this increase. Lilly USA is the company's largest affiliate. An HHS representative noted that in a Wednesday speech, Azar had raised concerns about how the operations of pharmacy benefit managers (PBMs) affect drug pricing.

"I have seen how this system, from the perspective of drug manufacturers, makes it nearly impossible to cut list prices," Azar said. "If you want to cut the list price, PBMs have no incentive to do business with you — they actually have a disincentive to putting your drug on their formulary. If you cut the list price during the plan year, the PBM could actually be on the hook for some of the rebate dollars it promised the payer."

The drive to share more data with the public on drug prices is one of the few points of agreement on health policy between the Trump administration and the Obama administration.

Niall Brennan, who served as CMS' influential healthcare data evangelist during the Obama administration, initially launched the drug spending dashboards. On Wednesday, Brennan told Medscape Medical News that he was glad to see that CMS "has finally updated and expanded the data available to consumers, researchers, and journalists.

"The American public has a right to greater visibility into prescription drug prices and price increases," said Brennan, who is now president and chief executive officer of the Health Care Cost Institute, in an emailed statement. "Every day we see more evidence how increases in prescription drug prices are hurting consumers bottom line."

Flat Prices

Drugmakers contend that CMS' Part D dashboard gives an overblown view of pharmaceutical costs, because it focuses on prices for medicines. These prices do not reflect subsequent and significant negotiations, according to the drug industry.

"Specifically, the Part D information focuses on list prices and ignores the market forces at work to hold down costs, and the Medicaid information leaves out mandated and negotiated rebates in the program," said Nicole Long, a spokeswoman for the drugmakers' trade group, the Pharmaceutical Research and Manufacturers of America (PhRMA), in a statement emailed to Medscape Medical News. "As a result, it fails to provide Part D and Medicaid patients with meaningful and helpful information regarding their medicines."

PhRMA has a more positive view of the Part B dashboard, which it says builds on a "transparent, market-based metric" of Medicare's policy of paying a set premium for drugs administered in physicians' offices. Part B payments are based on the reported average sales price (ASP).

The Part B pricing information "supports the conclusion that volume-weighted ASP has been stable and grown less quickly than medical inflation," Longo said in the statement. "In reality, spending on both retail and physician-administered medicines grew just 0.6 percent in 2017 and is projected to grow just 2-5 percent annually between 2018 to 2022."

Still, the Part B dashboard update for 2016 showed notable jumps in costs even for certain well-established products, which have long since moved beyond the initial marketing and ramp-up stage. The CMS press release highlights a 6% increase in the annual growth rate from 2012 to 2016 for Remicade (infliximab) and a 5.6% increase for the cancer drug Rituxan (rituximab).

Both of these biotech drugs have been approved in the United States since the late 1990s. They are two of Part B's biggest expenses, with $1.67 billion spent in 2016 on Rituxan and $1.34 billion on Remicade, according to the CMS dashboard.

Price hikes are far from universal, even among the more costly drugs covered in Part B. CMS reported flat and declining costs for two blockbuster medicines used for serious eye conditions, including macular degeneration.

There was no change in the average spending per dosage unit from 2015 to 2016 for Eylea (aflibercept), and there was a 0.1% decrease from 2012 to 2016.The drug remained at the top of CMS' Part B spending dashboard as a $2.21 billion expense in 2016. CMS reported 210,411 Eylea treatments for that year, at an average cost of $10,497.

The price for an Eylea competitor dropped, according to the Part D dashboard. There was a 2.3% decrease in the average spending per dosage unit for Lucentis (ranibizumab) from 2015 to 2016. Part D plans spent $1.044 billion on the drug; 106,408 treatments cost an average of $9814.

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