The Ever-Increasing Cost of Medicare Drugs

Five out of the ten drugs that cause the most spending for government insurance plan Medicare Part D have been chosen by the Biden White House for price negotiations. They are blood thinners Eliquis and Xarelto, diabetes medications Jardiance and Januvia as well as blood cancer treatment Imbruvica. Data analyzed by KFF shows that the five drugs have seen government spending under Medicare increase by between 28 percent and a whopping 429 percent over the course of four years. Jardiance and Eliquis (+152 percent) saw the biggest increases, which is significant since the latter drug is also the single most expensive for Medicaid's senior prescription drug insurance program at a cost of $12.6 billion in 2021, the latest year for which data is available. Spending increases for the top 10 most expensive drugs accounted for more than half of total expenditure increases in the Medicare segment between 2018 and 2021. While the number of users of these drugs increased, so did their prices in many instances, according to KFF. New prices are scheduled to go into effect 2026.

A total of ten drugs out of the 50 spendiest for the government program will see their prices re-negotiated, also including heart medication Entresto, arthritis drug Enbrel and a treatment for Crohn's disease, Stelara, as well as another diabetes drug, Farxiga, and insulin products by company Novo Nordisk marketed as Fiasp and NovoLog. Interesting about the list released this morning is that products by ten different drugmakers were picked, also including Johnson & Johnson, AbbVie, Merck and Bristol-Myers Squibb.

The basis for the re-negotiations was created in 2022 as part of the Inflation Reduction Act. Lawsuits by affected producers are expected as are lower prices that Medicare is expected to push through due to its power as one of the largest buyers of prescription medication in the United States.