Do You Know What the 10 Most Expensive Medicare Part B Drugs Are?

Medicare spent approximately $19.5 billion on Part B drugs in 2010. Part B drugs are either administered by a doctor or under a doctor’s close supervision in a physician’s office or in a hospital outpatient setting.

Many of these drugs are quite expensive because they are either used by a substantial number of beneficiaries or because they have a high cost.

Part B drugs differ from Medicare Part D drugs because the latter are normally self-administered. Part D drugs cost Medicare, its beneficiaries and states $61.7 billion in 2010.

The most expensive Part B drugs make up the majority of total Part B drug spending. In 2010, the 55 most costly Part B drugs made up about 85 percent of all Medicare Part B drug spending, while the 10 most costly drugs accounted for nearly 45 percent of all Part B drug spending.

Twenty-three of the 55 highest-expenditure Part B drugs are used in cancer treatments.

According to the Government Accountability Office, the top 10 most expensive Part B drugs, ranked by the average annual cost per beneficiary, are:

10. Velcade
Treats: cancer
Cost: $19,667

9. Sandostatin Lar Depot
Treats: acromegaly, diarrhea and flushing caused by cancerous tumors and vasoactive intestinal peptide secreting adenomas
Cost: $22,748

8. Vidaza
Treats: myelodysplastic syndrome
Cost: $22,957

7. Herceptin
Treats: cancer
Cost: $25,797

6. Dacogen
Treats: myelodysplastic syndrome
Cost: $25,858

5. Erbitux
Treats: cancer
Cost: $25,898

4. Primacor, Primacor in Dextrose
Treats: acute decompensated heart failure
Cost: $62,790

3. Ventavis
Treats: pulmonary arterial hypertension
Cost: $84,205

2. Remodulin
Treats: pulmonary arterial hypertension
Cost: $130,772

1. Factor viii Recombinant (various)
Treats: hemophilia A
Cost: $216,833

Medicare Part D – Trouble Brewing

Medicare Part D is on the chopping block.

The much-discussed sequester has taken effect. But federal lawmakers are still trying to find ways to undo the $85 billion in spending cuts it has put in motion.

Medicare Part DIn his state -of-the-union address, President Obama trained his eyes on one of his favorite bogeymen — the pharmaceutical industry. The president has proposed a multibillion-dollar fee on drug companies by requiring them to issue the federal treasury rebates on prescription drugs consumed by low-income seniors.

Other Democrats want to go even further. They’re calling for the feds to essentially dictate prices for drugs sold through Medicare Part D plans. They claim that such a move will save even more money.

But neither plan will deliver the savings its backers claim. Even worse, both will raise costs for seniors, deny them access to drugs they need, and dismantle the structure of the only portion of Medicare that has cost less than government projections — the Medicare Part D drug benefit.

Medicare Part D leverages the power of market competition to deliver prescription drug coverage to seniors. Private insurance plans compete with one another for seniors’ business, offering different premiums, deductibles, and levels of drug coverage. Seniors can pick the plan that best suits their needs and budget, and the feds subsidize their premiums.

Today, the more than 27 million seniors enrolled in Part D can choose from about a thousand plans nationwide. Nearly 11 million people covered by Part D did not previously have prescription drug coverage. Ninety percent are satisfied with the program, according to KRC Research.

The competitive forces built into Medicare Part D have kept costs down. At an average of just $38 a month, premiums are 27 percent below where the government expected them to be. They’ve been essentially flat since 2009, according to the Kaiser Family Foundation.

Low premium costs, in turn, mean less taxpayer money for subsidies. In fact, Part D costs are 40 percent below where the Congressional Budget Office (CBO) initially predicted. Over the past six years, the CBO has lowered its long-term cost projections for Part D by hundreds of billions of dollars.

Try to name one other federal program that can boast such results. Certainly not the rest of Medicare. At the dawn of the program in 1965, Medicare’s Part A hospital insurance program was projected to cost just $9 billion by 1990. The actual cost was more than seven times that — $67 billion.

Despite Medicar Part D’s success at increasing prescription drug coverage at lower-than-expected cost, President Obama and his allies want to fundamentally change the nature of the program.

Obama’s plan would force drug companies to rebate some of the money they make on drug sales to “dual eligibles” — low-income seniors who qualify for both Medicare and Medicaid. They currently receive drug coverage through Part D.

The federal government mandates that drug makers generally give Medicaid a 23-percent discount. By requiring a similar rebate for dual eligibles, proponents claim that the government would save more than $150 billion over 10 years.

But as former Congressional Budget Office Director Douglas Holtz-Eakin has said, “That money has to come from somewhere.” And that somewhere will be other seniors’ pockets.

Holtz-Eakin estimates that the rebate scheme will force Part D premiums up by as much as 40 percent. That would add up to $3.7 billion to seniors’ out-of-pocket costs, as drug companies try to recoup the cost of those forced rebates.

As bad as Obama’s plan is, a coalition of Democratic lawmakers and various activist groups want to go even further — and have the government take over the role of negotiating drug prices from the private insurance companies.

In effect, they want the government to impose price controls on prescription drugs. They argue that Washington bureaucrats could force drug prices down even further, as occurs in the drug benefit for military veterans run by the federal Veterans Administration (VA).

But if the VA is such a great model, why are so many veterans fleeing it? Thirty-eight percent of veterans paid to join Part D in 2010, according to the Department of Veterans Affairs, up from 34 percent in 2006. That’s because the competitive principles that govern Part D have resulted in a marketplace with a wide array of plans that provide access to more drugs than the centralized VA bureaucracy does.

Meanwhile, the CBO has repeatedly said that the government will not be able to deliver the savings it promises, writing most recently, in 2009, “[we] still believe that granting the Secretary of HHS additional authority to negotiate for lower drug prices would have little, if any, effect on prices.”

Medicare Part D has succeeded at expanding coverage at low cost precisely because it’s operated without too much government meddling. In the end, this fight is less about saving Medicare money than it is about giving the federal government yet more control over our healthcare system.

Seniors should hope that the president and his allies don’t succeed in their quest to upend Part D.


Medicare Patients Have Higher Costs for Cancer Medication

Medicare patients will have higher out of pocket costs for cancer medication forcing seniors to skip treatment.

Facing a life-and-death struggle with kidney cancer, Rita Moore took her prescription for a new kind of chemotherapy pill to her local drugstore.

She was stunned when the pharmacist told her the cost for a month’s supply would be $2,400, well beyond her income.

Medicare drug plans that cover Medicare patients  like Moore are allowed to charge steep copayments for the latest cancer medications, whose cost can run to tens of thousands of dollars a year. About 1 in 6 beneficiaries aren’t filling their prescriptions, according to recent research that has put numbers on a worrisome trend.

Officials at Medicare say they’re not sure what happens to those patients — whether they get less expensive older drugs that sometimes work as well, or they just give up. Traditionally, chemotherapy has been administered intravenously at a clinic or doctor’s office. Pills, a relatively new option, are thought to represent the future of cancer care.

Moore, 65, was operated on in February for an advanced form of kidney cancer. She said both her cancer and kidney specialists agreed that a drug called Sutent probably offered the only chance to keep the disease in check. It’s a capsule taken at home.

But she was unprepared for what happened when she went to fill her prescription.

“I cried,” said Moore, who lives in a small town in central California. “What can you do when the only thing out there that can maybe give you some quality of life is unaffordable? I was devastated. I didn’t know what to do.”

Private insurance companies that deliver the Medicare prescription benefit say the problem is that drug makers charge too much for the medications, some of which were developed from taxpayer-funded research. The pharmaceutical industry faults insurers, saying copayments on drugs are higher than cost-sharing for other medical services, such as hospital care.

Others blame the design of the Medicare prescription benefit itself, because it allows insurers to put expensive drugs on a so-called “specialty tier” with copayments equivalent to 25 percent or more of the cost of the medication.

Drugs for multiple sclerosis, rheumatoid arthritis and hepatitis C also wind up on specialty tiers, along with the new anti-cancer pills. Medicare supplemental insurance — Medigap — doesn’t cover those copayments.

“This is a benefit design issue,” said Dan Mendelson, president of Avalere Health, a research firm that collaborated in a recent medical journal study on the consequences of high copayments for the new cancer drugs.

Cost-sharing should only be used to deter wasteful treatment, he explained. “It is hard to make the argument that someone who has been prescribed an oral cancer medication doesn’t need the drug,” added Mendelson.

The study last month in the Journal of Oncology Practice found that nearly 16 percent of Medicare beneficiaries did not fill an initial prescription for pills to treat cancer, a significantly higher proportion than the 9 percent of people with private insurance who did not follow through.

Forty-six percent of Medicare beneficiaries faced copayments of more than $500, as compared to only 11 percent of patients with private insurance. Among people of all ages, 1 in 4 who faced a copayment over $500 did not fill their prescriptions. Cancer is more prevalent among older people.

“Obviously, we’re leaving a lot of Medicare patients off the bus, standing at the curb, if they can’t afford the medications,” said Dr. Lowell Schnipper, who chairs the American Society of Clinical Oncology’s task force on the cost of cancer care. It advises doctors to discuss costs with patients up front, to avoid surprises.

Medicare officials say there are currently no plans to rework the design of the prescription benefit.

But “nobody is more concerned about access than we are,” said Dr. Jeff Kelman, Medicare’s chief medical officer.

For many seniors, Kelman suggested, the situation is not as bleak as what Moore encountered. For example, the prescription plan is designed so beneficiaries who are poor or near poverty face only token copays. For the rest, President Barack Obama’s health care law gradually closes the coverage gap known as the “doughnut hole.” This year, the new law provides a 50 percent discount on brand name drugs for those in the gap.

(Comment: Closing the doughnut hole will INCREASE Medicare Part D premiums and copays. It will also result in tier shifting for the more expensive drugs and will never eliminate the coinsurance requirement on the most expensive drugs.)

The gap starts after Medicare recipients and their insurance plan have spent $2,840 on medications. After that, seniors are responsible for roughly the next $3,600. Once total spending reaches about $6,440, Medicare’s catastrophic coverage kicks in and beneficiaries pay only a small amount.

Yet the health care law could be struck down by the courts or repealed if Republicans win the White House and Congress next year. Even if the law stands, assistance after seniors end up in the gap doesn’t take away the initial shock at the pharmacy counter.

“The underlying problem is with the basic structure,” said Joe Baker, president of the Medicare Rights Center, a New-York based advocacy group. “Even before you get to the doughnut hole, you’ve got a problem.”

One solution would involve requiring drug plans to lower copayments for cancer pills. But the trade-off is likely to be an increase in premiums for all beneficiaries.

Rita Moore had to try to find her own way out of the dilemma. She lives in Corcoran, Calif., and still works as resident manager of an apartment building for seniors.

Moore decided to apply to Pfizer’s prescription assistance program for Medicare patients who can’t afford Sutent and other drugs the company makes. Pfizer approved a year’s worth of free medication, but it took about two months to collect and review all the medical and financial paperwork.

(Comment: Organizations such as PPARx and Needy Meds will help Medicare beneficiaries find low cost and free medications)

“They were very helpful, but it wasn’t a fast process,” said Moore. In the meantime, she wasn’t being treated. The cancer spread and is now close to her spine and her body’s main artery.

“This is kind of strange,” Moore said. “After you’ve worked all your life, you get something catastrophic and you run into news like your drugs are going to cost $2,400.”