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CAPD Statement on CBO Data on Medicare and Medicaid Drug Spending


Last week, the Congressional Budget Office (CBO) released a new report that shines a light on how the skyrocketing cost of sole-source specialty drugs is placing increasing strain on taxpayers, federal and state budgets, as well as millions of the programs’ beneficiaries.

Looking at prices and public spending for specialty drugs in Medicare Part D and Medicaid specifically, the report found:

  • Net spending on specialty medications in Part D increased by 277% from 2010 to 2015, rising from $8.7 billion to $32.8 billion.
  • Net Medicaid spending on specialty medications doubled over the same period from $4.8 billion to $9.1 billion in 2015.

Importantly, while brand-name specialty drugs represented only 1% of prescriptions in Medicare Part D and Medicaid, they made up 30% of total spending in both programs in 2015.

The data continues to show how drug companies’ sky-high prices have real consequences for patients, taxpayers and government budgets. To address these escalating prices, we need a well-functioning marketplace that fosters robust competition. Otherwise, taxpayers and patients in Medicare and Medicaid will continue to be on the hook for pharma’s next price hike.