Climbing cost of old common drugs threatening Medicaid
The skyrocketing prices of new drugs to treat rare diseases have stoked outrage nationwide. But hundreds of old, commonly used drugs cost the Medicaid program billions of extra dollars in 2015 to 2016, a Kaiser Health News data analysis shows. Eighty of the drugs — some generic and some still carrying brand names — are more than two decades old.
Rising costs for 313 brand-name drugs lifted Medicaid’s spending by as much as $3.2 billion in 2016, the analysis shows. Nine of the drugs have been on the market since before 1970. In addition, the data reveal that Medicaid outlays for 67 generic and other non-branded drugs cost governments an extra $258 million last year.
Even after a medicine has gone generic, the branded version often remains on the market. Medicaid recipients might choose to purchase it because they’re brand loyalists or because state laws prevent pharmacists from automatically substituting generics. Drugs driving Medicaid spending increases included common asthma medicines like Ventolin, overthe-counter painkillers like the generic form of Aleve, and generic antidepressants and heartburn medicines. Among the examples:
Ventolin, approved in 1981, treats and prevents spasms that constrict patients’ airways and make it difficult to breathe. When a gram of it sold for $2.58 to $2.90 on average, Medicaid paid an extra $54.5 million for the drug.
Naproxen sodium, a painkiller originally approved in 1994 as brandname Aleve, went from costing Medicaid an average of 72 cents to $1.70 a pill, an increase of 136 percent.
Overall, the change cost the program an extra $10 million in 2016.
Generic metformin hydrochloride, an oral Type 2 diabetes drug that’s been around since the 1990s, went from an average 10 cents to 13 cents a pill from 2015 to 2016. Those extra three pennies per pill cost Medicaid a combined $8.3 million in 2016. And cost increases for the extended-release, authorized generic version cost the program $6.5 million more.
“People always thought, ‘They’re generics. They’re cheap,’” said Matt Salo, executive director of the National Association of Medicaid Directors. But with drug prices going up “across the board,” generics are far from immune from price increases.
Generics tend to lower costs over time, and Medicaid’s overall spending on generics fell $1.6 billion last year because many generics did get cheaper. But the per-unit cost of dozens of generics doubled or even tripled from 2015 to 2016. Manufacturers of branded drugs tend to lower prices once several comparable generics enter a market. Medicaid tracks drug sales by “units” and a unit can be a milliliter or a gram, or refer to a tablet, vial or kit.
Old drugs that became far more expensive included those used to treat ear infections, psychosis, cancer and other ailments:
Fluphenazine hydrochloride, an antipsychotic drug approved in 1988 to treat schizophrenia, cost Medicaid an extra $8.5 million in 2016. Medicaid spent an average $1.39 per unit in 2016, up 347 percent from 2015.
Depo-Provera was approved in 1960 as a cancer drug and is often used now for birth control. It cost Medicaid an extra $4.5 million after its cost more than doubled to $37 per unit in 2016.
Potassium phosphates — on the market since the 1980s and used for renal failure patients, premature infants and patients undergoing chemotherapy — cost Medicaid an extra $1.8 million in 2016. Its average cost to Medicaid rose 290 percent, to $6.70 per unit. A shortage of potassium phosphates began in 2015 after manufacturer American Regent closed its plant to address quality concerns, said Erin Fox, who directs the Drug Information Center at the University of Utah and tracks shortages for the American Society of Health-System Pharmacists.