Prescription drugs are a big business in America. Its single largest customer is Medicare.
Things weren’t always that way. In 2005, before the Part D benefit was added, Medicare paid a relatively trivial amount of money on prescription medicine.
Today, Medicare pays one third of the nearly $400 billion of all drug spending in America in the form of more than 1.5 billion yearly prescriptions.
Medicare spends more than $5 billion each year for Eliquis (Apixaban), a medicine that treats and prevents blood clots, making it the single most expensive Medicare drug expense.
The other most expensive common pharmaceuticals are Xarelto (Rivaroxaban, a blood thinning drug), Januvia (Sitagliptin, for diabetes), Lyrica (Pregabalin, to treat nerve pain) and Advair (Salmeterol, a breathing medicine).
Collectively, those medicines cost the Medicare program $15.5 billion every year. Each dose is costly but the large expense is a function of so many people taking those high priced drugs.
The mostly commonly filled prescriptions are among the least expensive both overall and per dose.
More than 27 million people with Medicare take a cholesterol or blood pressure medicine like Atorvastatin, Amlodipine or Lisinopril, costing the government an average $45 each month.
In fact, blood pressure lowering medicine is the single highest cost drug category for Medicare at more than $320 million per year.
Medicare prescription drug cost growth has quickened in recent years mainly because of expensive specialty biologics that treat once incurable conditions like Hepatitis C and aggressive cancers.
Some of the most expensive biologics are covered by Medicare Part B (aka medical insurance). This creates potentially unaffordable situation for Original Medicare enrollees lacking supplemental coverage.
By 2030, the Congressional Budget Office projects our government will spend $192 billion for Medicare Part D. While that might seem like a staggering amount of money, it's actually less than what actuaries expected when the program was first passed into law nearly 20 years ago.