Searching for Savings in Medicare Drug Price Negotiations

After many years of slow growth, prescription drug spending growth is on the rise, raising fiscal concerns for public and private payers and worries about affordability among consumers. The recent increase in drug spending growth is mainly due to spending on new breakthrough treatments for hepatitis C that came to market starting at the end of 2013, along with fewer opportunities to control spending through greater use of generic drugs. For Medicare, which accounted for 29 percent of national retail pharmaceutical spending in 2014, per capita costs in the Part D prescription drug program are projected to increase annually by 6.5 percent in the next 10 years, after rising at only 1.5 percent per year over the past eight years.