OBJECTIVES

To examine the pricing and spending trends of ultra-expensive drugs, focusing on Medicare Part D drugs from 2012 through 2017.

METHODS

This was a descriptive retrospective analysis using Medicare Part D Prescription Drug Event data from 2012 to 2017. Based on the annual average spending per beneficiary per drug, we stratified drugs into four cost categories. These were drugs costing: 1) more than the annual gross domestic product per capita ( “ultra-expensive drugs”); 2) more than the annual average social security benefits of all retired workers; 3) more than the Medicare Part D spending threshold for specialty tier; and 4) others. We estimated the change in the number of drugs, beneficiaries, mean spending per beneficiary per drug, and total spending on drugs for each cost category.

RESULTS

: Between 2012 and 2017, the number of ultra-expensive drugs identified went from 23 (1.1% of the total number of drugs covered by Medicare Part D in that year) to 110 (3.8%). The number of beneficiaries using these drugs grew from 12,906 (0.005% of the total beneficiaries) in 2012 to 267,934 (0.07%) in 2017, and total spending on these drugs jumped from $874 million (1.1% of the total Part D spending) in 2012 and $21,940 million (14.5%) in 2017. In comparison to the 25-fold increase in spending on ultra-expensive drugs between 2012 and 2017, spending on non-specialty drugs increased 1.4-fold (2.6-fold in drugs costing more than average social security benefit; 2.8-fold in specialty tier).Thirty-eight drugs (35%) out of 110 ultra-expensive drugs in 2017 became ultra-expensive through price increases.

CONCLUSIONS

: The growth in ultra-expensive drugs dwarfed the growth of other drugs in Medicare Part D utilization and spending metrics. Although fewer than 0.1% of Medicare Part D enrollees used ultra-expensive drugs, spending on these drugs accounted for nearly 15% of total Medicare Part D spending in 2017.