Despite the fact that the 10 top-selling Medicare Part D drugs only accounted for 0.3% of total covered drugs in 2021, they represented 22% of total gross Medicare drug spending, a new KFF analysis found.

Under the Medicare Drug Price Negotiation Program created by the Inflation Reduction Act, the federal government will be able to negotiate the price of some high-spending drugs covered by Medicare Part D and Medicare Part B. The Centers for Medicare and Medicaid Services will start by selecting 10 Part D drugs for 2026 (though the drugs will be announced September 1, 2023). After that, CMS will progressively add additional drugs.

The KFF analysis, published Wednesday, offers “context for understanding the potential impact of negotiating prices for a limited number of Medicare-covered drugs.” It relied on CMS’ data on Medicare Part D spending by drug. However, the researchers noted that “this analysis is not designed to identify which drugs are likely to be subject to price negotiation for 2026, since we do not take into account all of the factors that determine whether a drug is negotiation-eligible and we do not have access to the more current spending data that CMS will use in selecting drugs for price negotiation.”

KFF found that the 10 top-selling Part D drugs represented $47.7 billion of the $215.7 billion total gross Medicare Part D drug spending in 2021 (this didn’t include rebates paid by drug manufacturers to PBMs). Eliquis, a blood thinner by Bristol Myers Squibb, accounted for the most spending out of these 10 drugs at $12.6 billion. 

Another five of these drugs were diabetes drugs: Trulicity ($4.7 billion of gross spending), Januvia ($4.1 billion), Jardiance ($3.7 billion), Lantus Solostar ($2.8 billion) and Ozempic ($2.6 billion). The latter has gained attention recently due to its effectiveness in supporting weight loss.

The remaining top-selling drugs were multiple myeloma treatment Revlimid ($5.9 billion), blood thinner Xarelto ($5.2 billion), cancer treatment Imbruvica ($3.2 billion), and rheumatoid arthritis treatment Humira Citrate-free pen ($2.9 billion).

KFF also discovered that gross Medicare spending for the 10 top-selling Part D drugs more than doubled between 2018 and 2021, from $22 billion to $48 billion. In total, gross Part D spending increased from $166 billion in 2018 to $216 billion in 2021.

“The increase in gross spending on these 10 drugs alone accounted for more than half of the increase in gross Medicare spending across all covered Part D drugs over these years,” the report stated.

To be eligible for the price negotiation program, small-molecule drugs must have received FDA approval at least seven years prior to when the selected drugs are announced. For biologics, it’s 11 years. They also can’t have therapeutically-equivalent generic or biosimilar alternatives. For these reasons Trulicity, Ozempic, Revlimid, Humira and Lantus will be excluded.

“While all of the 10 top-selling Part D drugs in 2021 will not be included on the list of 10 drugs selected for price negotiation this year, this analysis suggests that targeting negotiation on a small number of high-spending drugs could affect a disproportionate share of Medicare drug spending in the future,” KFF said.

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