The prescription drug spending data released by the Centers for Medicare & Medicaid Services (CMS) today provide a misleading and incomplete picture of actual Medicare spending on prescription medicines by focusing on a small subset of medicines.
CMS in its recent update of Part B drug prices noted that “for most of the higher volume drugs…the prices changed 2 percent or less… [and] there are number of competitive market factors at work.” Additionally, as CMS acknowledged in this announcement, the Part D data do not reflect the substantial rebates negotiated by insurers and PBMs. In fact, the Medicare Trustees report that rebates are often as much as 20 to 30 percent and average rebates have increased each year of the program. The new data also ignore how these medicines are improving the lives of patients and providing significant savings to taxpayers by avoiding other health care costs.
While discussions of costs are important, CMS needs to look at spending holistically. For example, CMS’ own actuaries recently forecasted a “leveling off of spending” for medicines and project that spending on medicines will grow roughly in line with overall health care costs through the next decade.
For more, check out our 5 things to know about the CMS Part D data release this spring.