BIG PHARMA WATCH: NEW ANALYSIS FINDS BIG PHARMA REAPS BIG MULTIPLES FROM MEDICARE SPENDING ON TOP DRUGS

Part D Spending on 10 Most Popular Medications Over Five Years Averages Five Times What Drug Companies Claim to Invest in R&D

In case you missed it, AARP’s Public Policy Institute released a new analysis Wednesday examining Medicare Part D spending over a year five year period, from 2016 to 2020, on the 10 top-selling brand name pharmaceuticals from 2020 in the program.

The analysis found Medicare spent $27.2 billion on top-selling drug Eliquis over five years, “more than 10 times what the pharmaceutical industry says is the average cost to develop a new drug: $2.6 billion.”

Overall, the study found, “on average, total Part D spending on the drugs reviewed over the five-year period was more than five times higher than the average cost to develop a new drug.”

The analysis also cites a 2021 report from the U.S. House Committee on Oversight and Reform that found over the same period, “the 14 leading drug companies spent $577 billion on stock buybacks and dividends—$56 billion more than they spent on R&D over the same period.”

Each of the top 10 drugs had Medicare Part D spends considerably higher than the $2.6 billion estimate for developing a new drug:

Read the entire AARP analysis, “Medicare Spending on Prescription Drugs Far Outpaces Development Costs” HERE.

Learn more about market-based solutions to hold Big Pharma accountable and lower drug prices HERE.

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