Medicare Drug Spending Dashboard
By Andy Slavitt, Acting CMS Administrator and Niall Brennan, CMS Chief Data Officer
Just over a month ago, HHS convened a forum that brought together consumers, providers, employers, manufacturers, health insurance companies, representatives from state and federal government, and other stakeholders to discuss ideas on how our country can meet the dual imperatives of encouraging drug development and innovation, while ensuring access and affordability. The conversation touched on many ideas to increase access to information, promote value, drive innovation, strengthen incentives and promote competition.
Today, CMS is releasing a new online dashboard to provide information on Medicare spending on prescription drugs, for both Part B (drugs administered in doctors’ offices and other outpatient settings) and Part D (drugs patients administer themselves) to provide additional information and increase transparency. Having this information available to the public in an accessible format should inform health care decisions, policy considerations and encourage collective problem solving around these important issues.
This interactive dashboard allows consumers, policy makers, academics, manufacturers, purchasers, consumers, and other stakeholders to see six lists, comprising 80 drugs — three lists for Medicare Part B and three for Medicare Part D, sorted by the:
- Top 15 drugs by total annual cost,
- Top 15 drugs by the highest spending per Medicare user, and
- Top 10 drugs with the highest annual increase in cost in 2014.
The dashboard includes information on each prescription drug, including cost trend analysis, brand names, generics, and the name of the manufacturer, and provides easily searchable, detailed information and data. The 80 prescription drugs included in the dashboard represent 33percent of all Part D spending and 71percent of Part B drug spending in 2014, or $55 billion of the more than $143 billion in Medicare prescription drug spending in 2014. Prescription drug spending in Parts B and D was 14percent of total Medicare spending in 2014, up from 11percent in 2010 – just five years ago.
In today’s announcement, the topline findings include:
- The diversity, growth, and impact of drug spending in the Medicare program – while the high-cost drugs include brand name Hepatitis C and cancer therapies, some generic drugs are seeing large price increases.
- The trends of how drug spending change and shift over time – for the Medicare program, its beneficiaries, manufacturers and by condition.
Other insights include:
- The five Medicare Part D drugs with highest total drug spending each accounted for more than $2 billion in spending in Part D in 2014 and more than $1 billion in Part D in 2013.
- The highest increase in spending per unit in Part D was 500percent and in Part B it was 78percent.
- The highest cost per user in Part D is Sovaldi at $94,056 and for Part B is Remodulin at $133,845 per user in 2014.
Our Larger Goal: Broader Data Availability
The Medicare dashboard, of course, is only part of the story. While it will help answer some questions, we acknowledge that there are other questions it does not answer:
- The dashboard does not provide the net prices paid to manufacturers or the rebates to plans and prescription benefit managers. In the Part D program, we are not permitted to disclose the rebates paid by manufacturers to Part D plan sponsors. And for Part B, Medicare does not receive a rebate, but pays 106 percent of the estimated average sales price of each drug, which reflects the average prices paid by physician offices and hospital outpatient departments net of discounts and rebates.
- The dashboard includes average cost sharing information, but does not show what any particular beneficiary will pay, as the latter would require information on formulary tiering, co-payments, and mail-order preferences from Part D pharmacy benefit managers (PBMs) and health plans. Likewise, in Part B providers can increase cost sharing of the drug, and information on those increases isn’t widely available.
- The dashboard does not show spending for other payers like commercial purchasers, Medicaid, or other federal purchasers like the Veterans Administration or the Department of Defense.
Most importantly, the dashboard doesn’t provide information on the clinical or financial value of the drug. While the dashboard describes the therapeutic uses, these data do not capture the value these drugs can have on managing chronic disease or improving or extending quality of life for patients. For instance, the Hepatitis C drugs presented in this dashboard are an example of where spending has increased dramatically, but have brought about a major shift from the standard of care that previously existed for Hepatitis C patients.
We realize the dashboard doesn’t provide a complete picture, but still believe that, by sharing this information and allowing people to analyze the data, we can increase the knowledge around drug spending and support efforts that are evaluating whether public dollars are being spent most effectively. The drugs included in dashboard are likely to have an impact on spending and should spur public discussion of how these products are affecting the Medicare program.
We also seek to stimulate the release of additional data that will promote a more complete understanding of value and patient affordability. We believe that there is complementary data now available from other entities on rebates, clinical effectiveness, pharmacoeconomics, comparative effectiveness, safety, formulary placement and discounts on these drugs, including the Agency for Healthcare Research and Quality’s (AHRQ) EPC Evidence Based Reports. Our hope is that over time outside parties will release this type of information in order to broaden the understanding of these drugs.
CMS’s Commitment and Responsibility to Data Availability
Over the past several years, CMS has made it a priority to make more data available including, publishing extensive information on utilization and payments in the Medicare program. Starting in 2013, we published data on inpatient and outpatient hospital discharges by individual. We also started releasing payment and utilization data on the services and procedures provided to Medicare beneficiaries by physicians and other suppliers in 2014. Since then, we have also released similar information on the prescribing behaviors of physicians and other healthcare professionals as well as information on those who ordered durable medical equipment, prosthetics, orthotics and supplies items and services. Today’s release is part of that larger effort.
We are committed, as we always are when we publish data, to receiving input to make sure the data are accurate, fairly presented, constructive, and shown in a way that protect the identity of beneficiaries. Physicians, pharmacists, patients, manufacturers, researchers, and others are encouraged to provide us with feedback to inform our understanding of these data and make sure they are presented appropriately. If you have ideas on what other data would be useful for the federal government or the private sector to release that increases visibility into the economics of drug pricing and are relevant to better health decision-making, please email us at email@example.com.
Today, we take an important step forward in improving understanding and expanding the dialogue around the topic of prescription drug costs. We at CMS look forward to continuing this work in partnership with stakeholders to find ways to continue to improve the affordability and accessibility of life-saving prescription medications for beneficiaries in Medicare, Medicaid, and other health insurance programs.