Despite an overall decrease in prescriptions, prices for Medicare Part D brand-name drugs are rising — and so are beneficiaries' out-of-pocket expenses, according to a report from the Office of the Inspector General.
Total Medicare reimbursement for all brand-name drugs ballooned 77 percent from 2011 to 2015. Simultaneously, there was a 17 percent decrease in the number of prescriptions for these drugs, the OIG said.
Even when including manufacturer rebates, Medicare reimbursement for brand-name drugs climbed 62 percent from 2011 to 2015. The OIG report found Medicare costs for these drugs increased six times faster than inflation during the five-year period.
Medicare was not the only entity affected by the higher prices. The percentage of beneficiaries who paid at least $2,000 each year for brand-name drugs nearly doubled from 2011 to 2015.
"Our findings show that although there were fewer prescriptions for brand-name drugs in 2015 than in 2011, increases in Part D unit costs for brand-name drugs led to greater overall Medicare Part D spending and higher beneficiary out-of-pocket costs for these drugs," the OIG concluded. "Generally, plan sponsors base their pharmacy reimbursement amounts on the prices that manufacturers set for their drugs. Therefore, increasing manufacturer prices for brand-name drugs may result in increasing costs for Medicare and its beneficiaries, especially those beneficiaries who need access to expensive maintenance drugs."
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