A few drugs account for most of Medicare Part B spending

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Findings from an analysis carried out by KFF of Medicare* spending in 2019 found that most of the Medicare Part B** spending on drugs was on a relatively small number of drugs [1]. KFF is a non-profit organization that provides independent information on national health issues.

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In 2019, the net total Medicare Part B spending on the 585 drugs covered by the scheme was US$37 billion. The KFF analysis found that the 50 top-selling drugs (or 8.5% of total drugs) ranked by total spending accounted for approximately US$30 billion or 80% of total drug spending in Medicare Part B. In contrast, the remaining 485 drugs covered by Part B accounted for only 7% of total Part B drug spending in 2019.

In fact, the top 10 best-selling drugs covered by the Medicare Part B system accounted for 2% of all covered products but 43% of total Part B drug spending in 2019. They include four drugs for cancer, two for macular degeneration, two for rheumatoid arthritis, one for osteoporosis and one bone marrow stimulant, see Table 1.

GW 4502G 3 Tab1

  
The top 10 best-selling drugs for Medicare Part B are all expensive biologicals. Six of these biologicals: Eylea (aflibercept), Keytruda (pembrolizumab), Lucentis (ranibizumab), Opdivo (nivolumab), Orencia (abatacept) and Prolia (denosumab), have not yet had biosimilars approved by the US Food and Drug Administration (FDA). The other four: Avastin (bevacizumab), Neulasta (pegfilgrastim), Remicade (infliximab) and Rituxan (rituximab), have all had multiple biosimilars approved by the agency [2]. However, despite their approval and launch in the country the originators are still preferred over their biosimilars. In fact, biosimilars currently make up only 2.3% of the US biologicals marketplace. Currently, 90% of global biosimilars sales take place in Europe, despite 60% of overall biologicals sales occurring in the US [3].

Reasons for the lack of uptake of biosimilars in the US include market and regulatory dynamics that currently discourage market uptake of biosimilars [3], but also other issues, including the use of payment policies that disincentivize use of biosimilars and lack of understanding from providers about the efficacy, safety and interchangeability of biosimilars [4].

The analysis concluded that ‘focusing drug price negotiation or reference pricing on a subset of drugs that account for a disproportionate share of spending would be an efficient use of administrative resources’.

*Medicare is a national social insurance programme, administered by the US federal government since 1966. It provides health insurance for Americans aged 65 and older who have worked and paid into the system, as well as to younger people with disabilities.
**Medicare Part D is an optional programme to help Medicare beneficiaries pay for their prescription drugs.

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References
1. Cubanski J, Neuman T. Relatively few drugs account for a large share of medicare prescription drug spending. KFF. 19 April 2021.
2. GaBI Online - Generics and Biosimilars Initiative. Biosimilars approved in the US [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2021 Jun 25]. Available from: www.gabionline.net/Biosimilars/General/Biosimilars-approved-in-the-US 
3. GaBI Online - Generics and Biosimilars Initiative. The sluggish US biosimilars market [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2021 Jun 25]. Available from: www.gabionline.net/Reports/The-sluggish-US-biosimilars-market 
4. GaBI Online - Generics and Biosimilars Initiative. US policy brief identifies barriers to biosimilars uptake [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2021 Jun 25]. Available from: www.gabionline.net/Policies-Legislation/US-policy-brief-identifies-barriers-to-biosimilars-uptake

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Source: CMS, KFF

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