“We know there are many, many smart minds in this country,” Sean Cavanaugh, CMS deputy administrator and director of the Center for Medicare, said on a call with reporters. “We're excited to unleash those minds and see what they find in our data.”
Dan Mendelson, CEO of Washington-based consulting firm Avalere Health and a former White House health director, said his group was pouring over the data and was happy the government is unlocking more information. “It will stimulate a lot of discussions about pharmaceuticals between patients and physicians that will ultimately prove to be valuable,” Mendelson said.
The data are based on 35.7 million Part D beneficiaries from 2013. Almost two-thirds of that total was in stand-alone prescription drug plans, and the other third had their Part D benefits through their Medicare Advantage health plan.
Nexium, a drug that treats heart burn and is manufactured by AstraZeneca, cost Medicare Part D the most in 2013, according to a CMS fact sheet that accompanied the data release. The purple pill cost the program $2.5 billion. The figure includes the ingredient cost, dispensing fee, sales tax and any applicable administration fees, according to the CMS.
Medicare could potentially save money on Nexium. This past January, the Food and Drug Administration approved the first generic version of Nexium, called esomeprazole, to handle acid reflux disease. A subsidiary of Israeli drug giant Teva Pharmaceuticals Industries won those rights.
Medicare spent at least $1 billion for 13 other drugs and therapies outside of Nexium, the data show. Advair, which treats asthma and chronic obstructive pulmonary disease, netted $2.3 million for British drugmaker GlaxoSmithKline. AstraZeneca's Crestor, which treats high blood cholesterol, was not far behind at $2.2 billion. Sanofi's two diabetes drugs, Lantus and Lantus Solostar, fetched almost $2.7 billion combined in 2013.
Lisinopril, a medicine used to combat high blood pressure, was the most commonly prescribed drug. It appeared on almost 36.9 million Part D claims, just ahead of the 36.7 million claims of simvastatin, another cholesterol drug. But those drugs cost far less than the other large, brand-name drugs: lisinopril cost Medicare $307 million, while simvastatin cost $434 million.
Mendelson said early readings of the data show a lot of regional variation in terms of prescription patterns by physicians and nurse practitioners. Biologics, as opposed to chemically created drugs, also appear in many instances, he said.
Niall Brennan, the CMS' chief data officer, said on the call the agency is always looking for fresh perspectives on its drug policy, and the data may provide for that. But perhaps more substantially, the release may reignite debate over whether Medicare Part D should negotiate discounts for drugs given that billions of dollars are being spent when cheaper alternatives exist.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 created the Part D drug program. However, unlike Medicaid and the Veterans Affairs Department, Medicare was and continues to be prohibited from negotiating discounts between private plans and drugmakers. The Pharmaceutical Research and Manufacturers of America lobbied aggressively for that provision when the law was being crafted.
HHS' Office of Inspector General released a report this week saying Medicare stands to save billions of dollars if it were able to barter for drug rebates like Medicaid. Lawmakers have proposed bills to allow Medicare to negotiate drug prices for dual eligibles—low-income Americans who qualify for both Medicare and Medicaid.
Drug companies and other industry groups have argued rebates would lead to higher plan premiums and reduced access to some drugs. The CMS' data shine a light on how much each drug brings in for each drug firm, which could force them to justify that line of reasoning. “The more scrutiny there is on cost without talking about the benefits of these therapies makes it more difficult for the pharmaceutical industry's argumentation,” Mendelson said.
The Pharmaceutical Research and Manufacturers of America slammed the data dump, calling it “misleading and an inaccurate representation of actual Medicare Part D spending.”
“Significant price negotiation exists in Part D and results in rebates of as high as 20% to 30% for branded medicines. These savings are not reflected in the data,” retiring PhRMA CEO John Castellani said in a written statement. “As with all data, it is important to look at these numbers in context.”
The American Medical Association similarly criticized the government's drug spending reports. The group said the data could unfairly characterize physicians and misrepresent how they prescribe drugs for their patients. For instance, the AMA said physicians who work in hospices may appear to be heavy prescribers of opioids, and the data points don't show the types of patients treated.
“The data released today is much more complex than initially meets the eye,” AMA President Dr. Robert Wah said in a statement. “The limitations of it should be more comprehensively listed and highlighted more prominently so that patients can clearly understand them.”