AARP Identifies the Top 25 Expensive Medicare Part D Drugs Prior to Price Negotiations

Prescription drug prices for Medicare Part D enrollees have skyrocketed, with some medications experiencing price increases of over 700% since their introduction, according to a new study by AARP. These price hikes have put a significant financial burden on both patients and taxpayers.

Among the top 25 brand-name drugs that accounted for the highest Medicare Part D spending in 2021, Lantus, an insulin medication, saw its price surge by 739% since 2000, while Enbrel, a drug therapy for autoimmune diseases, increased by 701% since 1998. On average, these drugs more than tripled in cost since entering the market.

In 2021, over 10 million Medicare Part D enrollees relied on these drugs to treat serious conditions such as diabetes, cancer, arthritis, and autoimmune diseases. The total cost to the Medicare program for these medications reached a staggering $80.9 billion in just one year.

To address this issue, Medicare will begin negotiating prescription drug costs under the Inflation Reduction Act, penalizing companies that increase prices faster than the general inflation rate. By September 1, the Centers for Medicare & Medicaid Services will announce the first 10 drugs selected for negotiation. AARP’s analysis aims to highlight the significant impact that drug negotiations can have on lowering costs for patients and taxpayers.

The study revealed that almost all of the top 25 drugs experienced annual price increases that far exceeded general inflation rates. For example, while general inflation increased by 71% during a specific period, Lantus’ price increased by a staggering 739%. The longer these drugs were on the market, the more their prices rose, with drugs available for fewer than 12 years experiencing a 58% increase, while drugs on the market for 20 or more years saw a 592% increase.

Leigh Purvis, senior director of health care costs and access at the AARP Public Policy Institute, criticized the unjustifiable price increases by drug companies. These price hikes can have a significant impact on individuals, forcing them to make difficult trade-offs between necessities like food and medications.

Patients using Medicare prescription drug plans typically take four to five prescription drugs per month. With the increasing reliance on co-insurance plans, where patients pay a percentage of a drug’s price rather than a fixed copay, patients’ out-of-pocket costs are directly affected by drug companies’ pricing decisions.

The study found that the median price of new brand-name drugs is approximately $200,000. Even a small percentage increase in drugs starting at that price can translate into thousands of dollars more for patients.

A recent study by KFF revealed that 73% of people, regardless of political party, support government regulation of prescription drug prices. The majority of respondents favored several actions to lower prices, highlighting the shared concern among consumers and taxpayers regarding drug companies’ pricing practices.

Under the Inflation Reduction Act, Medicare has the authority to negotiate prices directly with drug companies. The rebates will be based on drug sales and the extent to which drugs covered under Medicare Part B and D exceed inflation. The Congressional Budget Office estimates that inflation-based rebates will result in billions of dollars in deficit reduction and lower commercial drug prices.

However, the effectiveness of rebates in controlling prescription drug prices remains uncertain. Drug companies may choose to pay the penalties to continue increasing prices, undermining the impact of the new law. AARP is prepared to defend the Inflation Reduction Act against any attempts to weaken or overturn it.

AARP hopes that this study serves as a wake-up call for all Americans who are skeptical about the importance of lowering drug prices. The skyrocketing costs driven by drug price increases will ultimately affect everyone through higher taxes, cuts to public programs, or both. The organization is dedicated to advocating for affordable prescription drugs and ensuring that individuals do not have to make difficult decisions between their health and other essential needs.

Original Story at www.dallasnews.com – 2023-08-11 11:00:07