Completed Work on Spending Trends

Increases in prescription drug prices have been drawing great attention from Congress, the Administration, and the American public. OIG recently examined increases in reimbursement for brand-name drugs in Part D and found that total reimbursement for these drugs increased 77 percent from 2011 to 2015, despite a 17 percent decrease in the number of prescriptions for these drugs. After accounting for rebates, reimbursement for brand name drugs in Part D still increased 62 percent across this 5-year span. During that time period, the percentage of Part D beneficiaries responsible for out of pocket costs of at least $2,000 per year for brand name drugs nearly doubled. To control for the possibility that newer, more expensive brand name drugs may have driven increases in total Part D reimbursement, we also calculated unit costs for brand name drugs that were reimbursed in all 5 years, and found that for almost half of brand name drugs reviewed, Part D unit costs increased at least 50 percent.