Pharmaceutical companies focus of CMS spotlight on Part B drug waste

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Trine K. Tsouderos HRI Regulatory Center Leader, PwC US January 10, 2020

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In 2018, CMS spent $725 million on Medicare Part B drugs discarded by providers, a number that represents about 2 percent of the $33.3 billion spent on Part B drugs that year. The statistic, part of a new dashboard on drug spending from CMS, is part of the Trump administration’s effort to lower drug prices, the agency noted in a press release.

CMS has required providers submitting Medicare Part B claims to report discarded drugs or biologicals since January 2017. The data show an uneven pattern of waste, with relatively few drugs accounting for much of it.

The top 10 drugs by value of the wasted product accounted for nearly $456 million. Six of the top 10 in this category were cancer drugs, which accounted for $330 million worth of discarded medication. Almost $123 million worth of the top-ranked drug in this category – a chemotherapy for multiple myeloma and mantle cell lymphoma – was discarded. The remaining four medications were two therapies for autoimmune conditions, a treatment for allergic asthma and hives, and Botox, which has multiple therapeutic uses.

The CMS table includes 481 drugs listed by Healthcare Common Procedure Coding System codes for which information on discarded units was available. CMS also updated its drug spending dashboards for Medicare Part B, Medicare Part D and Medicaid to include 2018 data. The dashboards are interactive tools that consumers and researchers can use to track changes in average unit prices per dose of drugs over time and to compare the price of individual medications sold by more than one manufacturer.

HRI impact analysis

Two percent of the total spent by CMS on Part B drugs is small compared with overall drug spending in Part B, but that's only for Medicare Part B and not what is being covered by Medicaid and commercial insurers. Still, the CMS data give some additional ammunition to politicians, policymakers and consumer advocates fighting to lower drug costs, especially if they focus on the small number of products particularly prone to wastage.

The information on wasted Part B drugs could again draw attention to pharmaceutical companies’ packaging practices. Discarded medication units typically are injectable therapies whose doses vary by patient weight but that are offered in standard volume that exceeds what is needed for most people.

The issue attracted attention in 2016 after the release of an analysis estimating that the US may spend billions on oncology drugs that are discarded because vials contain higher doses than are usually necessary, the American Society of Health-System Pharmacists notes in its drug packaging policy. The society recommends that pharmaceutical companies reduce drug waste by providing multiple-dose vials or single-dose vials of differing doses.

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Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Crystal Yednak

Senior Manager, Health Research Institute, PwC US

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