Prescription drugs account for one out of every six dollars spent on Medicare

July 06, 2016

According to KFF, medications covered under the Part D prescription drug benefit amounted to 13% of the $97 billion Medicare spent on medications in 2014. Spending under Part B of the benefit accounts for 3% of that total. In the past few years, per capita Part D spending has risen 2.5% between 2006 and 2015, mainly due to treatments for hepatitis C. The 2016 Medicare Trustees report projects that the Part D per capita spending will increase more rapidly in the next decade - by as much as 6% - as more high-priced specialty drugs become available. The report shows that overall, Medicare is responsible for an ever growing proportion of prescription drug spending: rising from 18% in the first year of the Part D benefit in 2006, to 29% in 2014. That percentage is projected to increase to 34% by 2024, when the overall amount spent on prescribed drugs is expected to rise by 89%, to $564 billion.