Increases in Part D Reimbursement for Brand-Name Drugs

Recent increases in prescription drug prices have drawn the attention of Congress, made headlines in major media outlets, and raised concerns in Government agencies that pay for these drugs. Some studies also have shown that certain groups of drugs, i.e., therapeutic classes, that treat specific conditions such as diabetes and heart disease, are becoming more expensive. Drugs in these therapeutic classes are typically maintenance drugs, which means they are usually prescribed for chronic conditions; therefore, increasing costs for these drugs may have a long‑term financial impact on Part D and its beneficiaries.

This data brief examines how increases in reimbursement for brand‑name drugs in Part D may be affecting Medicare and its beneficiaries. We used prescription drug event data to provide an analysis of reimbursement amounts and utilization changes for brand‑name drugs from 2011 to 2015. We also examined the impact of rebates on total Part D reimbursement across the 5 years. Next we compared changes in Part D reimbursement to the rate of inflation over the 5‑year period. Finally, we evaluated beneficiary out‑of‑pocket costs and calculated reimbursement changes by therapeutic classes for brand‑name drugs in Part D from 2011 to 2015.