List prices for the 25 branded drugs associated with the highest Medicare Part D spending in 2021 have increased by an average of 226% since they first entered the market, according to a recent report from AARP’s Public Policy Institute. These drugs were responsible for $80.9 billion in total Medicare Part D spending in 2021.
Overall, lifetime price increases among the 25 drugs ranged from 20% to 739%, with all but one of them greatly exceeding the annual rate of inflation over the same period. The list price of Enbrel (etanercept), a treatment for rheumatoid arthritis and psoriatic arthritis, skyrocketed by 701% since entering the market in 1998.
For the 25 drugs analyzed, their lifetime list prices increased more dramatically the longer they were on the market. The average price increase for the drugs that were on the market 20 or more years was 592%, while the increase for the drugs sold for less than 12 years was 58%.
The report found that, on average, almost 60% of the current list price for the top 25 drugs was due to price increases after the product entered the market. Eight drugs analyzed in the AARP report are on the list of the first 10 prescription drugs for which the Biden administration will seek lower Medicare prices as part of the Inflation Reduction Act. The law also included a provision that requires drug companies to pay a rebate to Medicare if their prices increase faster than inflation.
This infographic was reprinted from AIS Health’s biweekly publication RADAR on Drug Benefits.