ICYMI: Lack Of Competition In Drug Market Drives Up Medicare & Medicaid Spending

Mar 18, 2019

In case you missed it, the Centers for Medicare and Medicaid Services (CMS) released new data last week which showed that prescription drugs with only one manufacturer are responsible for the biggest spending increases in both Medicare and Medicaid.

According to the data, overall spending on prescription drugs under Medicare Part D increased at an average annual rate of 10.6 percent from 2013 to 2017, far outpacing inflation.

And the driver of the rapidly rising spending?  Drugs with just one manufacturer.

From 2016 to 2017, more than 120 drugs covered under Part D saw a greater-than $35 increase in average unit price.  Of those, all except one are manufactured by just one drug maker.

Part D spending rose by hundreds of dollars per dose for dozens of medications from 2016 to 2017 – some by more than $1,000 per dose.

Here are some examples of brand name, single-manufacturer drugs whose prices significantly increased:

  • AbbVie’s Humira increased around 14 percent to $2,238 per dose.
  • Amgen’s Enbrel increased 14.4 percent to $1,139 per dose.
  • Genentech’s Lucentis increased 23.3 percent to $7,400 per dose.

The new data underscores how a lack of competition allows brand name pharmaceutical manufacturers to price gouge.  Big Pharma successfully blocks competitors from coming to market and then continuously increases prices, leaving patients with few options and forcing them to pay high prices for the medications they need.

That’s why CSRxP supports market-based solutions, namely the CREATES Act that will crack down on Big Pharma’s anti-competitive tactics, and bring more generics and biosimilars into the market to compete and drive prices down.

This data further underscores that misguided proposals, such as the Rebate Rule proposed by the Trump Administration are the wrong approach.  Taking aim at rebates will not solve the crisis of rising prescription drug prices, since many one-maker drugs have no or limited rebates.