By Charles Ornstein
This story was co-published with the Washington Post.
Medicare spent $4.5 billion last year on new, pricey medications that cure the liver disease hepatitis C 2014 more than 15 times what it spent the year before on older treatments for the disease, previously undisclosed federal data shows.
The extraordinary outlays for these breakthrough drugs, which can cost $1,000 a day or more, will be borne largely by federal taxpayers, who pay for most of Medicare’s prescription drug program.
The most-discussed of the new drugs, Sovaldi, which costs $84,000 for a 12-week course of treatment, accounted for more than $3 billion of the spending.
But the expenditures will also mean higher deductibles and maximum out-of-pocket costs for many of the program’s 39 million seniors and disabled enrollees, who pay a smaller share of its cost, experts and federal officials said.
The spending dwarfs the approximately $286 million that the program, known as Part D, spent on earlier-generation hepatitis C drugs in 2013, said Sean Cavanugh, director of Medicare and deputy administrator at the Centers for Medicare and Medicaid Services (CMS).
The most-discussed of the new drugs, Sovaldi, which costs $84,000 for a 12-week course of treatment, accounted for more than $3 billion of the spending. Spending on another drug, Harvoni, hit $670 million even though it only came on the market only in October. Bills for a third drug, Olysio, often taken in conjunction with Sovaldi, reached $821 million.
Medicare also spent $157 million on older hepatitis C drugs in 2014, bringing the total spending for the category to more than $4.7 billion.
The spending surge is unlike anything Part D has seen. The nine-year-old program has benefited in recent years from a slowdown in prescription drug costs as several blockbusters, including the cholesterol-lowering drug Lipitor and the blood thinner Plavix, have lost patent protection and have faced competition from generics. Continue reading