Government Drug Expenditures

Introduction

The U.S. Department of Health and Human Services (HHS), Office of the Assistant Secretary for Planning and Evaluation (ASPE) released new research on spending and utilization trends of Medicare Part B drugs, drugs administered in physicians' office or hospital outpatient departments rather than being purchased at the pharmacy counter or by mail order.

Prescription drug price increases create affordability challenges for patients and for the government. This report tracks drug price changes from 2016-2022. There were 1,216 products whose price increases during the twelve-month period from July 2021 to July 2022 exceeded the inflation rate of 8.5 percent for that time period. The average price increase for these drugs was 31.6 percent.

Medicare covers prescription drugs provided during inpatient hospital and skilled nursing facility stays through Part A, retail prescription drugs through Part D, and drugs provided in physicians’ offices and hospital outpatient departments through Part B. Over the 2006-17 period, Medicare FFS Part B drugs spending per enrollee grew at 8.1 percent annually.

This Report responded to a request from the House and Senate Committees on Appropriations.

The Secretary of Health and Human Services (HHS) has been directed to submit a drug pricing report containing information requested by the House Committee on Appropriations.

Executive Summary Prescription drugs play an ever-increasing role in modern medicine. New medications are improving health outcomes and quality of life, replacing surgery and other invasive treatments, and quickening recovery for patients who receive these treatments. As important as prescription drugs are, not everyone has access to them.