Some Medicare, Medicaid drug prices soar as reform uncertain

Medicaid spending on the drugs that have undergone the greatest price increases soared in 2015, according to federal statistics released Monday that show how much higher drug prices have affected government health care programs.

Of the 20 drugs whose prices have increased between 140% and 500% between 2014 and 2015, spending went from $146 million to $486 million, the data from the Centers for Medicare and Medicaid Services (CMS) show.

The CMS drug pricing data was part of the 2015 "dashboard" for Medicare and Medicaid spending and included Medicaid for the first time this year.

The top two drugs based on spending for the Medicare Part D program were also in the top five drugs for Medicaid: The Hepatitis C drug Harvoni and diabetes-management treatment and insulin pen, Lantus. Each were associated with more than $1 billion in spending.

"Because Medicare and Medicaid beneficiaries often live on low- and fixed-incomes, the high and rising cost of certain drugs takes a significant toll on them," said Andy Slavitt, CMS' acting administrator in a blog post. "And prescription drug costs don't only hit American seniors, people with disabilities, and low-income families; they also have a significant impact on taxpayers. "

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The drug industry believes the data "paints a misleading picture" of what's actually going on with prescription drug prices, says Allyson Funk, spokeswoman for the trade group Pharmaceutical Research and Manufacturers of America. CMS' dashboard "focuses on a small subset of medicines and ignores the substantial market forces at work to hold down costs," she said in a statement.

While the fate of the Affordable Care Act is unclear with Donald Trump's election as president, there is bipartisan and broad public support for drug price reform.

While Trump and Democratic nominee Hillary Clinton's approaches to drug price reform "might be different," the election showed how concerned voters are about rising drug prices, says Mark McClellan, who headed the Food and Drug Administration and CMS during the George W. Bush Administration.

"The issue is definitely not going away," said McClellan, now a Duke University professor and director of the school's Margolis Center for Health Policy.

During the campaign, Trump and former secretary of State Hillary Clinton both expressed support for giving the Medicare program the ability to negotiate prices with drugmakers.

The consumer advocacy group Public Citizen says this could save $16 billion in Medicare spending, but critics say it could  make it harder for patients to get the drugs they need.

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About 85% of those polled by the Kaiser Family Foundation since last year have supported drug price reform. Registered Republicans ranked government action on drug prices as a higher priority for a new Administration than repealing the ACA by 66% to 60% last year.

Still, voters rejected a California ballot measure to limit state government spending on prescription drugs last week. That's despite an in-state push the day before the election by former Democratic Presidential candidate and Vermont Sen. Bernie Sanders  and after a massive pharmaceutical industry-funded advertising campaign against the measure.

Drug price reform is "one of the most clean cut stories of what people want versus lobbying money," says Peter Maybarduk, who heads Public Citizen's access to medicines program.

If the Trump Administration keeps its promise to "drain the swamp" in Washington, it will take on drug price reform, says Maybarduk. He says drugmakers' "core business model is "government-granted monopolies."

Trump's transition team suggests more business as usual in town, Maybarduk says. Richard Bagger, executive vice president of corporate affairs and market access for drugmaker Celgene, was executive director of Trump's transition team. He is now "back at Celgene," said company spokesman Brian Gill. The Trump campaign announced changes to the transition team Friday and said Bagger would remain an advisor as he returned to the private sector.

More than 73 million low income people are covered by the Medicaid program, which spent about $57 billion on prescription drugs last year. Medicare is the federal health insurance program for people who are 65 or older, some younger people with disabilities, and people with end-stage liver disease.

Medicaid's costs are shared by states and the federal government, while the federal government picks up at least half of the cost in every state. The amount each state gets varies based on a formula that considers how much it spends on covered medical services and the average per capita income for each state compared to the national average.

The increases may represent smaller dollar amounts, but there have also been big price hikes for generic drugs. Nine of the 20 drugs with the biggest increases for Medicaid were generic. The generic chemotherapy drug Mitomycin, which treats stomach, pancreatic, and other cancers, had an average unit cost increase of 163% for Medicare Part B between 2014 and 2015.

EpiPen's much-publicized price increases did not land the epinephrine auto injectors for allergic reaction in the top 20 for increases or spending, but CMS data show that Medicare and Medicaid spending on EpiPens rose by more than 500% from 2011 to 2015.

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Other findings:

• The anti-anxiety drug Ativan had an average unit cost increase of 1,264% between 2014 and 2015 in Medicaid. Five other drugs that had unit cost increases of more than 300%.

• The brand name drug Glumetza that manages high blood sugar had an average unit cost increase of 381% between 2014 and 2015. Three other drugs that had increases of more than 200%.

•Manufacturer rebates were included for the first time. More than $16 billion in rebates for brand name drugs were collected by Medicare Part D plans in 2014 for an average rebate of 17.5%. The Health and Human Services' Office of Inspector General has reported Medicare Part D rebates are generally lower compared to other insurers and employers. "

Asked to comment on the impact of the new Administration on the prospects for drug price reform, Gill declined.

"Any comment on potential healthcare impact at this point would be speculative and we don’t comment on speculation," he said in an email. 

Tell us your health care — and drug price — stories at healthinsurance@usatoday.com