Ten Breakthrough Drugs to Cost US $50 Billion in Ten Years

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The Government Healthcare Programs, including Medicare and Medicaid, will have to pay more than $50 billion over the next ten years on ten “breakthrough” medications developed by the pharmaceutical industry.

We’ve already highlighted the enormous amount that the United States has been spending on hepatitis C drugs over the past year. This analysis goes farther to include future projections for Keytruda, a cancer treatment developed by Merck; Eylea, an eye drug from Regeneron and Bayer; Kalydeco, a Vertex Pharmaceuticals cystic fibrosis treatment, and other drugs.

Over the next ten years, these ten drugs are estimated to cost Medicare more than $30 billion and Medicaid (state and federal portions) more than $15 billion. Spending by the Veterans Administration and the Department of Defense weren’t included in the analysis.

The FDA was authorized by Congress in the Food and Drug Administration Safety and Innovation Act of 2012 to use the breakthrough therapy status to speed the development and review of drugs to allow them to reach patients with serious conditions sooner. Sovaldi, a hepatitis c treatment which received market approval in eight months, is the most well-known breakthrough therapy to date.

The report, put together by Avalere and funded by the trade group America’s Health Insurance Plans, is troubling. It is research like this that makes it more important than ever that the government’s Medicare Part D program be given the authority to negotiate prices for high-cost drugs with the pharmaceutical industry. Medicaid and the Department of Veteran Affairs can already negotiate their drug prices. Medicare should have that power as well.


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