RARE Daily

Medicare Part D Spending on Specialty Drugs Climbs to $32.8B in 2015

March 21, 2019

Rare Daily Staff

Spending on specialty drugs under Medicare Part D rose to $32.8 billion in 2015, up from $8.7 billion in 2010, according to a new report from the Congressional Budget Office.

The report found that spending on specialty drugs in Medicaid roughly doubled to $9.9 billion from $4.8 billion during the same period.

In 2015, brand name specialty drugs represented 30 percent of net spending on prescription drugs under Medicare Part D and Medicaid but accounted for only about 1 percent of all prescriptions dispensed in these programs. The increase represents an average annual increase of 31 percent.

For the purpose of the report, specialty drugs includes drugs used to treat a chronic, complex, or rare disease that cost at least $6,000 a year in 2015. It must be administered by a healthcare profession, distributed through specialty pharmacies or other nontraditional channels, and require special handling.

The rising spending on these drugs is an issue of concern among policy makers because Medicare and Medicaid are large purchasers and spending on these drugs could have implications for the federal budget.

The average annual net spending on such drugs per beneficiary in the Medicare Part D program who used brand name specialty drugs roughly tripled during the period to $33,460 in in 2015, up from $11,330 in 2010.

CBO expects spending on specialty drugs to continue to grow in coming years. It notes that about 80 percent of the drugs approved by the U.S. Food and Drug Administration in 2017 would be classified as specialty drugs under most definitions.

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