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Drug price increases that exceed inflation are costing Medicare Part D billions
Drug price increases that exceed inflation are costing Medicare Part D billions
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Spotlight (AARP Public Policy Institute)
- Author(s):
- Purvis, Leigh, author
- Contributor(s):
- AARP (Organization), issuing body.
Public Policy Institute (AARP (Organization)), issuing body. - Publication:
- Washington, DC : AARP Public Policy Institute, June 2021
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Drug Costs
Inflation, Economic
Medicare Part D -- economics
Medicare Part D -- trends
Prescription Drugs -- economics
United States - Genre(s):
- Technical Report
- Abstract:
- It has been 15 years since the creation of the Medicare Part D prescription drug benefit. Research indicates that the program has been largely successful: beneficiaries report improved access to prescription drugs and the vast majority are satisfied with their coverage. However, there is growing concern about trends in Medicare Part D spending, which has accelerated considerably over the past decade. One factor helping to drive these trends is brand-name drug price growth. Brand-name drug prices have been growing faster than general inflation for more than a decade, and drug companies are increasingly relying on such price increases for revenue growth. Meanwhile, Medicare Part D remains prohibited from negotiating with pharmaceutical companies, leaving it exposed to the possibility of paying ever-higher prices for the exact same drug products. In response to this challenge, Congress recently considered bipartisan legislation that would require drug manufacturers to pay a rebate to the federal government if their prices increased faster than the rate of general inflation. Notably, a similar inflationary rebate is already required under Medicaid and is responsible for roughly half of the rebates that state Medicaid programs receive from brand-name drug manufacturers. This Spotlight provides additional context for inflation-based rebates, by examining excess Medicare Part D spending due to annual drug price changes that exceeded the rate of general inflation between 2015 and 2019.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-ND license. (More information)
- Extent:
- 1 online resource (1 PDF file (5 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 9918317782206676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918317782206676