Pharmacy Dashboard Updates

New CMS pharmacy dashboards include data sets from 2013 to 2017.

The Centers for Medicare & Medicaid Services (CMS) has released its latest “CMS Drug Spending Dashboards.” While the dashboards are interactive (you can look up specific drug data), we took a broader approach and downloaded and analyzed the source data.

The dashboard has the following data sets for 2013 through 2017:

  • Medicare Part D
  • Medicare Part B
  • Medicaid

For each drug and manufacturer, the data includes:

  • Total Spending
  • Total Dosage Units
  • Total Claims
  • Total Beneficiaries
  • Average Spending Per Dosage Unit (Weighted)
  • Average Spending Per Claim
  • Average Spending Per Beneficiary
  • Change in Average Spending Per Dosage Unit (2016-2017)
  • Annual Growth Rate in Average Spending Per Dosage Unit (2013-2017)

We specifically looked at Part D drugs with spending of over $1 billion. These drugs turned out to be focused on the following diseases:

Disease Total Spend Claims
Type 1 and Type 2 Diabetis $8,212,926,788 14,686,100
Blood Clots $5,687,988,232 11,591,007
COPD $5,547,814,048 12,289,852
Type 2 Diabetis $3,817,588,316 5,785,217
Multiple Myeloma $3,312,773,264 259,693
Psoriasis $3,039,841,725 498,979
Hep C $2,555,839,934 81,898
Nerve pain $2,517,073,735 5,072,269
Multiple Sclerosis $1,499,493,336 231,973
Hyperthyroidism $1,436,678,980 985,214
Breast Cancer $1,399,517,851 125,619
Leukemia $1,368,727,295 131,205
Renal Failure $1,316,266,396 892,182
Arthritis $1,157,839,006 224,688
Dry Eye $1,049,441,691 1,646,672
Grand Total $43,919,810,595 54,502,568

Here are some of the critical trends we noted. First, the increase in the average Medicare costs for these drugs vastly outpaced inflation.

Xarelto, for instance, a drug for treating blood clots, had an increase in market price for a monthly supply from $258.82 in 2013 to $461.40 in 2017. Xarelto also saw an increase in Medicare Part D payment rates for the same monthly supply, from $130.91 to $192.46 the same period. This yields increases in market cost and Medicare cost of 78 and 47 percent, respectively. Over the same period of time, according to the Bureau of Labor Statistics, wages only increased 12 percent. This means the cost of the drug was increasing 4 to 7 times faster than the inflation rate for salaries.

We used salaries for two reasons in our analysis. First, because the cost of the drug is borne by people earning wages. Secondly, since the drug was fully developed, it made sense to us to use salaries since the main cost-driving production should be wages.

We noted that marketing appears to influence drug spending. Advertisements for drugs with over $1 billion in Medicare spending, including Xarelto (blood clots), Eliquis (blood clots), Harvoni (Hepatitis C) and Restasis (dry eye) seem to flood our media screens.

As a final comment, it seems that many of the costly drugs relate to disease conditions heavily impacted by our own behavior.  One of the biggest causative factors in COPD, for instance, is smoking.  Similarly, the prevalence of type-2 diabetes correlates with America’s struggles with obesity.

As the last comment on something that may impact future drug development, we noted that actually curing a disease does not always help the drug companies’ bottom lines. Harvoni may have been a victim of its own success. Sales of this drug that treats hepatitis C fell from $4,399,701,570 in 2016 to $2,555,839,933 in 2017 as the patients that took the drug were cured.

We can’t imagine the pharmaceutical companies are not given pause by this.


Leave a Reply