How drug price hikes affect Medicare, Medicaid

Steep price hikes for a number of prescription drugs led to big increases in Medicaid and Medicare spending in 2015, according to data released by CMS.

The agency released its 2015 dashboard for drug spending, which, for the first time, included data on what was purchased for Medicaid beneficiaries.

The top drug in terms of Medicaid spending was hepatitis C treatment Harvoni, which accounted for nearly $2.2 billion in total spending. Harvoni also topped the prescription list for Medicare Part D, with spending jumping to just over $7 billion.

Diabetes treatment and insulin pen Lantus was also in top five for both programs, with Medicare spending nearly $4 billion on the drug and Medicaid spending $1.4 billion, up from $411 million in 2011.

The information provided by CMS doesn’t include rebates Medicare may receive from pharmaceutical companies, but overall, the data showed growth in prescription drug costs has continued. Medicare Part D costs above the catastrophic limit hit $51 billion in 2015, while in Medicaid, 75 percent of the increase in drug spending was due to prices going up.

“We know that millions of Americans have come to rely on these prescription drugs to manage their chronic conditions or to treat serious illnesses,” CMS Acting Administrator Andy Slavitt wrote in a blog post. “Maintaining access to those medications is the reason we believe informed dialogue on how to manage costs and cost increases are so important.”

Reining in pharmaceutical costs have been named a top priority for the next Congress, though the industry has spent big to try and defeat drug pricing bills at the state level, particularly in California.