Read Advisory Board's take on this story
CMS on last week unveiled updated drug pricing dashboards that significantly expands the amount of data available Medicare and Medicaid drug spending and list prices.
Medicare 101: Download our cheat sheets for Parts A through D
Details on drug dashboards
CMS first launched the dashboards under former President Barack Obama. The dashboards contained 2014 and 2015 data for several drugs that met certain criteria, such as high total spending. According to CNN Money, the data are most often used by journalists, nonprofits, and researchers examining drug price trends.
According to CQ Health, CMS' update expands the original dashboards to include the majority of drugs covered under Medicare Part B, Medicare Part D, and Medicaid. The redesigned dashboards display the percentage change in drug spending per dosage unit from 2012 through 2016.
As part of the dashboard, CMS also provided a summary of manufacturer rebates under Medicare Part D.
CMS Administrator Seema Verma during an interview with the Washington Post said CMS updated the dashboards to more clearly demonstrate how prices for drugs have changed over time. Verma said, "So you'll be able to see whether there's been a double-digit increase or a triple-digit increase or, in some cases, a quadruple-digit increase."
Dashboards show increases in Rx drug prices
The dashboards show Medicare in 2016 spent 23%—or $174 billion—of its total budget on all prescription drugs, up from 17%—or $109 billion—in 2012.
According to Politico's "Pulse," the updated dashboards also show that the prices of dozens of drugs covered by Medicaid and Medicare more than doubled from 2015 to 2016, while several drugs covered under Medicare Part D experienced triple-digit price increases. For instance, the data show the average per-dose cost of Evzio—a brand name version of the opioid overdose reversal drug naloxone—increased more than 500% from 2015 to 2016. Medicare Part D spent more than $40 million on the drug in 2016, CQ Health reports.
CMS in a release announcing the dashboards highlighted 27 drugs that accounted for $39 billion in Medicaid and Medicare spending in 2016 and had experienced significant annual increases in spending per dosage unit from 2012 to 2016. Among the Medicare Part B drugs—those administered in doctor's office or hospital—the data show the rheumatoid arthritis drug Orencia had the largest annual price growth rate at 17.2%, with Medicare spending $2,136 per beneficiary each month in 2016. Among the Medicare Part D drugs, the kidney disease drug Renvela had the largest annual price growth rate at 21.6%, with Medicare spending $630 per beneficiary each month in 2016.
Among Medicaid covered drugs, the data show the diabetes drug Lantus had the largest annual price growth at 18.7%.
Several industry experts praised CMS' decision to release more pricing data. Niall Brennan, former Chief Data Officer at the CMS, in a tweet wrote, "Congrats on the new dashboard, and on including more drugs—but to say that year over year prices changes are available for the first time is false—it was included in previous dashboards and you can download the previous data."
However, the Pharmaceutical Research and Manufacturers of America (PhRMA) raised concerns that the data could be misleading because it focuses on list prices. He said, "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." PhRMA added, "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% annually between 2018 to 2022" (Williams, CQ Health, 5/15 [subscription required]; Porter, HealthLeaders Media, 5/15; Diamond, "Pulse," Politico, 5/16; Luhby, CNN Money, 5/15; CMS release, 5/15).
Advisory Board's take
By Jessica Liu, Practice Manager, Health Care Industry Committee
Increasing drug price transparency is an interesting idea, but it's not new. There are already a number of states, including Oregon, California, and Vermont, that have passed laws requiring drug makers to publicize the prices of high-cost drugs and drugs that have increased significantly in price. However, so far, there is no evidence that price disclosure has an impact on drug pricing.
If you look at specific cases that have garnered intensive media attention, the results are mixed at best. For example, in 2015 Martin Shkreli, former CEO of Turing Pharmaceuticals, was publically shamed after increasing the price of Daraprim from $13.50 to $750. The company refused to lower the list price and instead offered a discount to hospitals purchasing in bulk.
Similarly, drug maker Mylan came under intense scrutiny in 2017 for increasing the price of EpiPens to $609 for a two-pack. According to a recent New York Times article, the price remains the same eight months later.
CMS' updated drug pricing dashboards are unlikely to shine as intense a spotlight on individual drug makers as these two examples. Therefore, they're even less likely to influence pricing. Still, CMS' push to update these dashboards represents an important milestone in the public conversation about drug prices and value.
Learn more: 6 ways your pharmacist can reduce costs and improve quality
From improving medication adherence to reducing hospital-acquired infections, pharmacists can play a significant role in critical organizational goals.
Our infographic outlines six pharmacist-led practices that can help improve patient outcomes and reduce overall health care spending. Download it now to get details about each practice, examples of how your peers put them into action, and the resulting impact on quality, safety, and cost reduction.
Download the Infographic
Next in the Daily Briefing
'You have cancer. Or maybe not': Inside one woman's experience with cancer's darkest unknowns