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New CMS Tool Tracks Medicare Spending on Prescription Drugs

December 22, 2015
by Heather Landi
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This week, the Centers for Medicare & Medicaid Services (CMS) launched a new online dashboard with the aim of providing transparency on its prescription drug spending.

The online dashboard provides information on Medicare spending on 80 prescription drugs – 40 drugs provided through the Medicare Prescription Drug Program under Part D and 40 drugs administrated by physicians and other professionals in the Medicare fee-for-service program under Part B. The drugs are sorted by the top 15 drugs by total annual cost and the top 15 drugs by the highest spending per Medicare user. The interactive dashboard also will list the top 10 drugs with the highest annual increase in cost in 2014.

In a blog post, Andy Slavitt, acting CMS Administrator and Niall Brennan, CMS Chief Data Officer, said the online tool will enable consumers, policy makers, academics, manufacturers, purchasers and other stakeholders to access price transparency data.

The 80 prescription drugs included in the dashboard account for 33 percent of all Part D spending and 71 percent of Part B drug spending in 2014, or $55 billion of the more than $143 billion in Medicare prescription drug spending in 2014, according to the blog post. Prescription drug spending in Parts B and D accounted for 14 percent of total Medicare spending in 2014, up from 11 percent in 2010.

The dashboard includes information on each prescription drug, including cost trend analysis, brand names, generics, and the name of the manufacturer, and provides easily searchable, detailed information and data. 

Slavitt and Brennan also noted when announcing the new online dashboard that high-price brand name Hepatitis C and cancer therapy drugs top the list, yet some generic drugs are seeing large price increases as well.

The dashboard does not provide the net prices paid to manufacturers or the rebates to plans and prescription benefit managers, the authors stated in the blog post.

“Most importantly, the dashboard doesn’t provide information on the clinical or financial value of the drug. While the dashboard describes the therapeutic uses, these data do not capture the value these drugs can have on managing chronic disease or improving or extending quality of life for patients,” the authors wrote. “We realize the dashboard doesn’t provide a complete picture, but still believe that, by sharing this information and allowing people to analyze the data, we can increase the knowledge around drug spending and support efforts that are evaluating whether public dollars are being spent most effectively. The drugs included in dashboard are likely to have an impact on spending and should spur public discussion of how these products are affecting the Medicare program.”

Slavitt and Brennan state in the blog post that the larger goal is broader data availability.

“We believe that there is complementary data now available from other entities on rebates, clinical effectiveness, pharmacoeconomics, comparative effectiveness, safety, formulary placement and discounts on these drugs, including the Agency for Healthcare Research and Quality’s (AHRQ) EPC Evidence Based Reports. Our hope is that over time outside parties will release this type of information in order to broaden the understanding of these drugs,” the authors wrote.

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