CBO and CDC Reports Underscore Urgent Problem of Rising Drug Prices

WASHINGTON, DC — As the price of specialty drugs explodes, more and more Americans are going without the prescriptions they need, data from two new government reports show. According to the Congressional Budget Office, net spending on speciality drugs in Medicare Part D increased by more than 275 percent — from $8.7 billion to $32.8 billion — over a recent five year period. Meanwhile, a new report from the Centers for Disease Control and Prevention shows one in 10 Americans are rationing medication. The uninsured are more vulnerable to egregious hikes, with one-third reporting rationing medication in response to high drug prices.
Specialty drugs — expensive medications that treat serious and life-threatening conditions like cancer, cystic fibrosis, and multiple sclerosis — are driving the spending, a new reportfrom the Congressional Budget Office shows. Specialty drugs introduced after 2015 are driving the trend; in Medicare Part D, the drugs accounted for nearly one-third of net spending but less than 1 percent of all prescriptions.
The statistics only tell part of the story.
Ohio resident Bob Fowler, 68, has private insurance today and has delayed his retirement while battling cancer to avoid paying the king’s ransom in cost sharing he’d owe under Medicare Part D for his multiple myeloma drug, Revlimid. 
“I want to live many more years in spite of my blood cancer,” Fowler said. “To have a shot at that, I need two things: life-saving drugs at an affordable price.”
Taxpayer spending on specialty prescription drugs has exploded.

  • Net spending on specialty drugs in Medicare Part D increased by more than 275 percent –– from $8.7 billion to $32.8 billion –– from 2010-2015. (CBO, pg. 1)

  • Brand-name specialty drugs in Medicare Part D account for under 1 percent of all prescriptions, but 30 percent of net spending. (CBO, pg. 1)

Patient out-of-pocket costs soared in Medicare, but less so in Medicaid.

  • “In 2015, the weighted average net price for 50 top-selling brand-name specialty drugs in Medicare Part D was $3,600 per ‘standardized’ prescription—a measure that roughly corresponds to a 30-day supply of medication—whereas the weighted average net price for the same set of drugs in Medicaid was $1,920." (CBO, pg. 1)

  • For patients who did not receive assistance for their Part D OOP, "the average annual net spending on such (brand-name specialty) drugs increased fourfold (from $8,970 in 2010 to $36,730 in 2015), and their average out-of-pocket cost for those drugs increased from $1,750 in 2010 to $3,540 in 2015." (CBO, pg. 8)

In response to soaring prices, patients are going without their medications.

  • “Among adults aged 18–64 who were prescribed medication in the past 12 months,11.4% did not taken their medication as prescribed to reduce their prescription drug costs.” (CDC, pg. 2)

  • “In 2017, strategies for reducing prescription drug costs were most commonly practiced among those who were uninsured...33.6% did not take their medication as prescribed.” (CDC, pg. 5)