Health Affairs April 20, 2018
Medicare Part D drug spending is out of control. In 2013, net spending on Part D was $50 billion, 10.0 percent of all Medicare spending. Now, just five years later, spending on Part D is expected to reach $92 billion in 2018, or 15.5 percent of net Medicare outlays—plus an additional $13 billion in premium payments by participants.
When Part D became law in 2003, its sponsors insisted that allowing the drug benefit to be administered by private insurers and pharmacy benefit managers (PBMs) would produce competition that would lead to lower costs. Therefore, they prohibited the government from directly negotiating drug prices with manufacturers. That was a very costly mistake. Part D drug prices have skyrocketed, and the profits...
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