The Contribution of Changes in Drug Mix and Price Growth to the Rising Costs of Brand-Name Drugs in Medicare Part D

Tamara Hayford, Chief of CBO’s Health Policy Studies Unit, presents research on the growing contribution of brand-name specialty drugs to spending in the Medicare Part D program over the 2010–2019 period. Spending growth for brand-name specialty drugs was largely driven by an increase in the average cost of a prescription for those drugs, though the source of that increase differed between the first and second halves of the analytical period. Net price growth for individual drugs was the primary driver of the increased average cost of a prescription for a brand-name specialty drug from 2015 to 2019. In contrast, increased use of more-expensive drugs was the primary driver from 2010 to 2015.