Nearly Half of All Medicare Drug Prices Increased From 2019-2020

Half of all Medicare Part D covered drugs and nearly half of all Medicare Part B covered drugs (48%) had price increases greater than inflation between July 2019 and July 2020, according to  Kaiser Family Foundation.

Among the 1,947 Medicare-covered drugs with price increases above the inflation rate in 2020, one-third (668 drugs) experienced price increases of 7.5 percent or more, the current annual inflation rate.

For example, 11 percent of Medicare Part D drugs saw price increases above the inflation rate but below 7.5 percent, 9 percent had price increases below inflation, and 41 percent had price reductions.

And 30 percent of Medicare Part B drugs had price increases above the inflation rate but below 7.5 percent, 6 percent had price increases below inflation, and the remaining drugs (46%) experienced price decreases. 

Overall, the median price increase for Medicare Part B was 5.4 percent and the median price increase for Medicare Part D was 5.6 percent.

The top-25 Medicare Part D drugs include Eliquis, Revlimid, Xarelto, Januvia, Trulicity, Imbruvica, Jardiance, Humira, and Ibrance. The KFF study found that 23 of the top 25 Part D drugs had price increases above inflation between 2019 and 2020.

The highest price increase between 2019 and 2020 was Imbruvica, with an eight percent increase. Following closely behind was Humira at a 7.4 percent increase, Jardiance at a 6.3 percent increase, and Revlimid at a 6.5 percent increase.

Additionally, Eliquis saw a 5.9 percent increase, Januvia saw a 5.2 percent increase, and Ibrance and Trulicity saw a five percent increase year over year, while Xarelto saw the lowest increase at 4.1 percent.

Among the 25 drugs covered by Medicare Part B with the highest total spending, 16 saw price increases greater than inflation. These drugs included two of the top three drugs by total spending in 2020: cancer treatment Keytruda (3.3 percent increase) and Prolia (4.7 percent increase).

Notably, The Congressional Budget Office (CBO) estimated a net federal deficit reduction of $83.6 billion over 10 years from the drug inflation rebate provisions in the BBBA for Medicare and private insurance. 

“Annual increases in drug price increases can translate to higher Medicare spending and higher out-of-pocket drug costs by patients. Higher out-of-pocket spending occurs when beneficiaries are required to pay coinsurance, or a percent of the drug’s price – which is common for many brand-name Part D drugs and standard for all Part B covered drugs in the form of a 20% coinsurance requirement,” a KFF spokesperson concluded.