Part D, Private Plan Spending Rises on Retail Specialty Drugs

Specialty drugs accounted for 37.7% of retail and mail-order prescription spending, net of rebates, in 2016 and 2017, according to a recent study published in Health Affairs. Average annual net spending on retail specialty drugs for Medicare Part D beneficiaries rose from $11.3 billion in 2010-2011 to $35.4 billion in 2016-2017. For private insurance enrollees, net spending increased from $24.6 billion to $57.6 billion during that time period. The growth in spending was partially driven by the increased use of retail specialty drugs — the proportion of people who obtained at least one specialty drug was 5.0% in 2016-2017, more than doubling the rate observed in 2010-2011. Meanwhile, the trend in Medicaid net spending was relatively flat.

 

 

NOTES: "Overall population" is the entire civilian noninstitutionalized population, which also includes people who are uninsured and people in other government programs. Total gross spending comprises payments to pharmacies by all payers, including out-of-pocket payments. Total drug rebates were paid by pharmaceutical manufacturers to pharmacy benefit managers and state Medicaid programs. Total net spending is gross spending minus rebates.

SOURCE: "Net Spending on Retail Specialty Drugs Grew Rapidly, Especially for Private Insurance and Medicare Part D," Health Affairs 39, NO. 11 (2020): 1970–1976. Visit https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2019.01830.