United States Government Accountability Office Report to Congressional Requesters MEDICARE PART B December 2017 Medicare Represented at Least Half of the Market for 22 of the 84 Most Expensive Drugs in 2015 GAO-18-83 December 2017 MEDICARE PART B Medicare Represented at Least Half of the Market for 22 of the 84 Most Expensive Drugs in 2015 Highlights of GAO-18-83, a report to congressional requesters Why GAO Did This Study What GAO Found In 2015, Medicare spent about $26 Medicare bases its payments for most Part B drugs on the average amount that billion on Part B drugs, including individual purchasers such as physicians paid to manufacturers, net of discounts injectable drugs, and certain cancer and rebates, called the average sales price (ASP). For most Part B drugs, drugs, which are typically administered Medicare sets the payment rate equal to the ASP plus an additional 6 percent. in a physician’s office or hospital Medicare’s market share—the percentage of total units of a drug sold that were outpatient department. GAO was provided to Medicare beneficiaries—is one of several factors that can affect the asked to examine Medicare’s share of market price for drugs covered under Part B. By law, Medicare pays the ASP- the Part B drug market. This report based rate regardless of how high or low that rate may be, while a private insurer describes Medicare’s market share for can respond to higher pricing by modifying coverage or eliminating a drug from high-expenditure Part B drugs paid its benefit package. Thus, when Medicare accounts for a large share of the based on ASP and the characteristics of those drugs. market for a drug, a manufacturer may have less incentive to price the drug competitively. To determine Medicare’s market share for Part B drugs paid based on ASP, In 2015, Medicare’s fee-for-service (FFS) program represented 50 percent or GAO used 2015 Medicare FFS claims more of the market for 22 of the 84 most expensive Part B drugs GAO analyzed. data—the most recent year available at These 22 drugs collectively represented $7.4 billion in spending—or about 30 the time of GAO’s analysis—to identify percent of all Medicare spending on Part B drugs in 2015. the 50 Part B drugs with the highest Medicare’s Market Share for 84 High-Expenditure Part B Drugs, 2015 total expenditures and the 50 drugs with the highest expenditures per beneficiary. In total, GAO analyzed 84 drugs because some were in both groups. GAO used Medicare claims and manufacturer sales data from the Centers for Medicare & Medicaid Services (CMS) to calculate Medicare’s market share for each drug in 2015. To examine characteristics of the 84 drugs, such as whether a drug was produced by a single manufacturer, GAO analyzed data from the Food and Drug Administration and Truven Health Analytics’ RED BOOK, which publishes drug pricing and product information. GAO received technical comments on a draft of this report from the Department of Health and Human Services, the agency that oversees CMS, and incorporated these comments as appropriate. Note: GAO defined Medicare’s market share as the percentage of total units of a drug sold that were provided to beneficiaries in the Medicare fee-for-service program. Expenditures reflect the total amount spent by the Medicare fee-for-service program and its beneficiaries. Among the 22 drugs where Medicare represented the majority of the market, 18 had a single manufacturer. Single manufacturers—lacking direct competitors— View GAO-18-83. For more information, may have greater ability to increase a drug’s price without seeing sales decline. contact James Cosgrove at (202) 512-7114 or cosgrovej@gao.gov. United States Government Accountability Office Contents Letter 1 Background 4 Medicare’s Market Share Was 50 Percent or More for 22 of 84 High-Expenditure Part B Drugs; Most High-Expenditure Drugs Had a Single Manufacturer 8 Agency Comments 13 Appendix I Expenditures, Beneficiaries, and Characteristics of 84 High- Expenditure Part B Drugs Paid on the Basis of Average Sales Price 15 Appendix II Data and Methods 29 Appendix III GAO Contact and Staff Acknowledgments 32 Tables Table 1: Medicare Expenditures and Utilization for 84 High- Expenditure Part B Drugs Paid on Average Sales Price, Calendar Year 2015, by Medicare Market Share 15 Table 2: Characteristics for 84 High-Expenditure Part B Drugs Paid on Average Sales Price, Calendar Year 2015, by Medicare Market Share 22 Figures Figure 1: How Market Purchases Determine a Drug’s Average Sales Price (ASP) 6 Figure 2: Medicare’s Market Share for 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price, Calendar Year 2015 8 Figure 3: Comparison of Characteristics for 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price, Calendar Year 2015 10 Figure 4: Therapeutic Categories for 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price, Calendar Year 2015 12 Page i GAO-18-83 Medicare's Market Share for Part B Drugs Abbreviations ASP average sales price CMS Centers for Medicare & Medicaid Services ESRD end-stage renal disease FFS fee-for-service HCPCS Healthcare Common Procedure Coding System MedPAC Medicare Payment Advisory Commission NDC National Drug Code This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. Page ii GAO-18-83 Medicare's Market Share for Part B Drugs Letter 441 G St. N.W. Washington, DC 20548 December 18, 2017 The Honorable John Yarmuth Ranking Member Committee on the Budget House of Representatives The Honorable Chris Van Hollen United States Senate In 2015, Medicare spent about $26 billion on drugs covered under Part B—which are those typically administered by a physician or under a physician’s supervision. Drugs covered under Part B (Part B drugs) include injectable drugs, some oral cancer drugs, and drugs infused or inhaled through durable medical equipment. Due to the high prices of some Part B drugs, Medicare beneficiaries treated with these drugs may face significant financial responsibilities, since they are responsible for 20 percent of the costs. Medicare’s payment rates for most Part B drugs are based on the average amount that purchasers such as physicians and wholesalers paid to manufacturers, net of discounts and rebates, referred to as the average sales price (ASP). 1 As such, Medicare’s payment rates for most Part B drugs are based on market prices. There are several factors that can affect the market price for drugs covered under Part B, including Medicare’s market share, which we define as the percentage of total units of a drug sold that were provided to beneficiaries in the Medicare fee-for-service (FFS) program. When Medicare’s market share for a drug is high, manufacturers may have less incentive to price a drug competitively. By law, Medicare pays the ASP rate regardless of how high or low that rate may be. 2 Similarly, when the price paid to manufacturers for a drug increases, so does Medicare’s 1 Rebates are price concessions by manufacturers that are given to purchasers after the drug is delivered, and discounts are price concessions by manufacturers that are reflected in the price purchasers pay for a drug at the time of delivery. 2 See Aaron S. Kesselheim, Jerry Avorn, and Ameet Sarpatwari, “The High Cost of Prescription Drugs in the United States, Origins and Prospects for Reform,” Journal of the American Medical Association, vol. 316, no. 8 (2016). Page 1 GAO-18-83 Medicare's Market Share for Part B Drugs payment rate for that drug. 3 In contrast, when private insurers collectively have high market share for a given drug, a manufacturer may have greater incentive to price the drug competitively because insurers can respond to high prices or price increases by restricting coverage or eliminating a drug from their benefit packages, which could encourage the use of less expensive alternatives. 4 In addition to Medicare’s market share, other market factors affect drug prices. For example, when there is only one manufacturer of a drug (called a single source drug), that manufacturer—lacking direct competitors—may have greater ability to increase the drug’s price without seeing sales decline. 5 You asked us to examine Medicare’s share of the Part B drug market in order to help inform the Centers for Medicare & Medicaid Services (CMS) and Congress as they consider whether and how to refine Medicare’s payment rate methodology for Part B drugs. This report describes Medicare’s market share for high-expenditure Part B drugs paid on the basis of ASP, as well as the characteristics of those drugs. To determine Medicare’s market share for high-expenditure Part B drugs paid on the basis of ASP, we analyzed Medicare FFS claims data for 2015—the most recent full year of data available at the time of our analysis—to identify the 50 Part B ASP drugs with the highest total Medicare expenditures and the 50 drugs with the highest expenditures per beneficiary in 2015. 6 In total we analyzed 84 drugs because 16 of the drugs were in both groups. These 84 drugs accounted for 79 percent of 3 There is a two-quarter (6-month) lag between the sale and when the payment rate takes effect. For example, drug sales in the first quarter of 2015 would form the basis of the ASP payment rate for that drug in the third quarter of 2015. 4 See, for example, Darius Lakdawalla and Wesley Yin, “Insurer Bargaining and Negotiated Drug Prices in Medicare Part D,” National Bureau of Economic Research Working Paper No. 15330, September 2009, which discusses similar pricing dynamics at work in the Medicare Part D program. 5 In some cases, there can be competition among multiple single source drugs that have similar health effects because providers can choose from among that group of drugs. 6 There were 17 drugs with high per-beneficiary expenditures that each had fewer than 50 unique beneficiaries in calendar year 2015. We excluded these drugs, which accounted for $36 million in total expenditures and 262 unique beneficiaries. We defined Medicare expenditures as the total amount spent by the Medicare FFS program and its beneficiaries. Our spending estimates do not include drugs for which Medicare’s payment is bundled with that of a related service—which occurs for many drugs administered in hospital outpatient departments—or spending for the administration or dispensing of the drugs. Page 2 GAO-18-83 Medicare's Market Share for Part B Drugs total Medicare spending for Part B drugs in 2015. (For the complete list of the 84 drugs, see app. I.) Using the Medicare FFS claims data together with data submitted to CMS by manufacturers on the number of units sold and average price of each drug in 2015, we calculated Medicare’s market share for a given drug as the percentage of total units of a drug sold by its manufacturer(s) in 2015 that were provided to beneficiaries in Medicare FFS. 7 To examine the characteristics of the 84 drugs in our sample, such as whether the drug was produced by a single manufacturer or was brand -name or generic, we used Medicare claims data, the Food and Drug Administration’s National Drug Code (NDC) Product Summary File, and Truven Health Analytics’ RED BOOK. 8 For a more in-depth discussion of our data and methods, see appendix II. To assess the reliability of the Medicare claims data and other data sources described above, we reviewed relevant documentation, performed electronic data checks for missing data or obvious errors, and interviewed agency officials familiar with these data sources. We also benchmarked our results against published sources by, for example, comparing the drug expenditure amounts from the Medicare claims data to information published by CMS. We determined that the data used in this report were sufficiently reliable for the purposes of our analysis. We conducted this performance audit from November 2016 to December 2017 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. 7 We measured the total units of a drug sold in Medicare billing units, which are dosages established within each drug’s Healthcare Common Procedure Coding System (HCPCS) billing code. For example, if the Medicare billing unit for a given drug, according to its HCPCS code, is 100 milligrams, and the quantity administered is 200 milligrams, then the units billed would be two. 8 RED BOOK publishes information on drug characteristics and drug pricing. Page 3 GAO-18-83 Medicare's Market Share for Part B Drugs Background Medicare Part B Drugs Part B drugs are typically administered by a physician or under a physician’s supervision, in the office or at a hospital outpatient department. Key characteristics of Part B drugs include the following: • Single Source or Multisource. Single source drugs have only one manufacturer. Multisource drugs have at least two, and often several, versions produced by different manufacturers. • Synthetic or Biologic. Drugs covered under Medicare Part B comprise both synthetic and biological drugs (called biologics). Synthetic drugs are produced from chemical ingredients and have small, well-defined chemical structures. Biologics are made in living systems using components made from living entities and may replicate natural substances such as enzymes, antibodies, or hormones. • Brand-Name or Generic. A brand-name drug is marketed under a proprietary, trademark-protected name. A generic drug is chemically equivalent to its branded counterpart and is generally marketed by multiple manufacturers under a nonproprietary name. Generic drugs have the same dosage, strength, and active ingredients as the brand- name product. Generic versions of a drug may become available after the patent on the brand-name drug expires. Biologics do not have generic alternatives, but there are biosimilars—which are highly similar, but not identical to the original product—referred to as a reference biologic. 9 • Therapeutic Category. Drugs with similar health effects are grouped into the same therapeutic category. 10 For example, drugs used to treat diseases of the eye would be part of the ophthalmologic therapeutic category, and drugs used to treat heart disease would generally be in the cardiovascular category. 9 Biosimilars can only be highly similar to the biologic product they are designed to resemble due to processes associated with translating biologics from living cells in the laboratory to mass-production molecules. As of September 2017, four biosimilars were approved for marketing in the United States, and all four had reference biologics that were covered under Part B. 10 Therapeutic categories we used to categorize the drugs in this report are aligned to the American Hospital Formulary Service Pharmacologic-Therapeutic Classification System maintained by the American Society of Health-System Pharmacists. Page 4 GAO-18-83 Medicare's Market Share for Part B Drugs Medicare Payment for Part Part B drugs generally are purchased by physicians or hospitals, which B Drugs are reimbursed for those costs by Medicare and private insurers. 11 The majority—about $23 billion, or 88 percent—of the approximately $26 billion that Medicare spent on Part B drugs was for those paid on the basis of ASP in 2015. 12 To set its ASP rates, Medicare collects quarterly data from drug manufacturers on the ASP and total sales of each drug (see fig. 1). 13 For most Part B drugs paid at ASP, the Medicare payment rate is the ASP rate plus 6 percent. 14 Beneficiaries are generally responsible for 20 percent of the payment rate for Part B drugs, which may be covered all or in part by a supplemental health insurance policy, such as an employer-sponsored retiree health plan, or by Medicaid. 11 Wholesale purchasers also buy Part B drugs and then sell them to physicians and hospitals. 12 The remaining 12 percent of expenditures was for drugs paid on the basis of different methodologies. For example, several Part B drugs, including certain vaccines and drugs provided through durable medical equipment, are paid for on the basis of average wholesale prices or reasonable cost and not on the basis of ASP. See 42 U.S.C. §1395u(o)(1). 13 The drug manufacturers that submit sales data to CMS include those that participate in the Medicaid drug rebate program. As such, they are required to submit data to CMS on all sales of Part B drugs to all U.S. purchasers, including physicians, hospitals, and wholesale distributors. See 42 U.S.C. §1396r-8(a)(1),(b)(3)(A). Most drug manufacturers participate in the Medicaid drug rebate program, and those who do not may voluntarily submit sales data to CMS. The manufacturers’ data do not include nominal sales to certain entities, or sales or discounts to other federal agencies and programs, such as the Department of Veterans Affairs, the Department of Defense, and Medicare Part D plans. See 42 C.F.R. § 414.804(a)(5)(2016). 14 Since 2005, the Medicare payment rate for most Part B drugs acquired by a physician’s office has been set at 106 percent of manufacturers’ reported ASP for the drug. See 42 U.S.C. § 1395w-3a(b)(1). Due to the impact of sequestration—the cancellation of budgetary resources under presidential order implemented pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985, as amended—some programs, projects, and activities across the federal government received spending reductions. Therefore, Part B drug payment rates to both physicians and hospitals were reduced to approximately 104 percent of ASP in 2015. See 2 U.S.C. § 901a(6). Under current law, sequestration of direct spending to achieve budgetary goals may be required every year through fiscal year 2025. Page 5 GAO-18-83 Medicare's Market Share for Part B Drugs Figure 1: How Market Purchases Determine a Drug’s Average Sales Price (ASP) a Drug manufacturers submit data quarterly to the Centers for Medicare & Medicaid Services on sales of Part B drugs to most U.S. purchasers, including physicians, hospitals, and wholesale distributors. Sales must be reported net of rebates, discounts, and other price concessions. The data submitted by manufacturers do not include, for example, nominal sales to certain entities and sales to other federal agencies (e.g., the Department of Veterans Affairs), and Medicare Part D plans. There is a two- quarter (6-month) lag between the sale and when the ASP payment rate takes effect. b Cost sharing, if required, may be charged in the form of coinsurance or a copayment. c In addition to physicians, hospitals, outpatient facilities, and drug wholesalers purchase Part B drugs from manufacturers. Page 6 GAO-18-83 Medicare's Market Share for Part B Drugs To improve Medicare’s methodology for setting Part B drug payment rates and increase price competition among certain drugs with similar health effects, the Medicare Payment Advisory Commission (MedPAC) recommended a series of reforms to the ASP methodology in its June 2017 report to Congress. 15 Specifically, MedPAC recommended the use of consolidated billing codes for a reference biologic and its biosimilars to encourage competition. 16 In addition, over the longer term, MedPAC recommended a new alternative program to ASP it termed the Drug Value Program, which providers would voluntarily enroll in and use private vendors to negotiate drug prices with manufacturers. 17 15 See Medicare Payment Advisory Commission, Report to Congress: Medicare and the Health Care Delivery System (Washington, D.C.: June 2017). 16 The recommended new policy would assign a common billing code to a reference biologic and its biosimilars, resulting in a single rate paid for all products billed under that code. Whereas under current ASP policy, a reference biologic has its own billing code, and all biosimilar products associated with a particular reference biologic are grouped together under a single billing code separate from the reference biologic. In reviewing a draft of this report, CMS officials stated that CMS does not have the statutory authority to implement MedPAC’s recommended policy. 17 Also, in 2016 CMS issued a proposed rule to test alternatives to the Part B payment method. 81 Fed. Reg. 13230, 13258 (Mar. 11, 2016). The proposed payment model was designed to address concerns that Medicare’s current methodology for setting Part B drug payment rates, as a fixed percentage above ASP, may give providers a financial incentive to prescribe more expensive drugs. The first phase of the proposed payment model would have changed the payment rate for drugs paid based on ASP from ASP plus 6 percent to ASP plus 2.5 percent plus a flat fee. The second phase would have implemented value- based pricing strategies, such as varying payment rates based on drugs’ clinical effectiveness and decreasing beneficiary coinsurance for drugs deemed high in value. However, CMS withdrew the proposed rule after the public comment period, citing the complexity of the issues related to the proposed model design and a desire for greater stakeholder input. 82 Fed. Reg. 46182 (Oct. 4, 2017). Page 7 GAO-18-83 Medicare's Market Share for Part B Drugs Medicare’s market share was 50 percent or higher (which we refer to as Medicare’s Market higher market share) for 22 of the 84 Part B ASP drugs we analyzed, and Share Was 50 these 22 drugs accounted for $7.4 billion in Medicare expenditures in calendar year 2015 (see fig. 2). Furthermore, 36 of the 84 high- Percent or More for expenditure drugs had a Medicare market share at or above 40 percent. 22 of 84 High- Across all of the 84 Part B drugs in our analysis, Medicare’s market share ranged from less than 1 percent to 71 percent. Expenditure Part B Drugs; Most High- Figure 2: Medicare’s Market Share for 84 High-Expenditure Part B Drugs Paid on the Expenditure Drugs Basis of Average Sales Price, Calendar Year 2015 Had a Single Manufacturer Notes: We defined Medicare’s market share as the percentage of total units of a drug sold that were provided to beneficiaries in the Medicare fee-for-service program. Expenditures reflect the total amount spent by the Medicare fee-for-service program and its beneficiaries. To identify high-expenditure Part B drugs for this analysis, we used Medicare fee-for-service claims data for calendar year 2015 to determine the 50 drugs with the highest total expenditures and the 50 drugs with the highest expenditures per beneficiary. In total we analyzed 84 drugs because 16 drugs were in both groups. Consistent with our prior work, the predominant characteristics of the high-expenditure Part B drugs we analyzed—regardless of Medicare’s market share—were that they were single source and lacked a generic Page 8 GAO-18-83 Medicare's Market Share for Part B Drugs alternative. 18 Specifically, 82 percent (18 out of 22) of the higher market share drugs we analyzed were single source, and 86 percent (19 out of 22) lacked a generic alternative. 19 The drugs with Medicare market share below 50 percent (which we refer to as lower market share drugs) were similar in terms of these characteristics (see fig. 3). However, in terms of composition, there were differences between drugs with higher and lower market share. Sixty-four percent of the higher market share drugs were synthetic, compared to only 21 percent of the drugs with lower Medicare market share. 18 See Medicare Part B: CMS Should Take Additional Steps to Verify Accuracy of Data Used to Set Payment Rates for Drugs, GAO-16-594 (Washington, D.C.: July 1, 2016). 19 We identified the drugs for our analysis according to the HCPCS codes, each of which can cover multiple drug products. Therefore, it is possible to have a multisourced brand- name drug. For example, the brand-name drugs Eligard and Lupron (both leuprolide acetate suspension) are manufactured by two different companies, but are both covered by HCPCS J9217. For more information on our data sources and methods, see appendix II. Page 9 GAO-18-83 Medicare's Market Share for Part B Drugs Figure 3: Comparison of Characteristics for 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price, Calendar Year 2015 Notes: We defined Medicare’s market share as the percentage of total units of a drug sold that were provided to beneficiaries in the Medicare fee-for-service program. To identify high-expenditure Part B drugs for this analysis, we used Medicare fee-for-service claims data for calendar year 2015 to determine the 50 drugs with the highest total expenditures and the 50 drugs with the highest expenditures per beneficiary. In total we analyzed 84 drugs because 16 drugs were in both groups. Page 10 GAO-18-83 Medicare's Market Share for Part B Drugs Across all the drugs we examined, 77 percent (65 out of 84) were in one of three therapeutic categories: • Antineoplastic. Drugs that inhibit or prevent the proliferation of neoplasms—abnormal growths of tissue. Primarily used to treat cancer. • Immunological. Drugs that modify the immune response, either by enhancing or suppressing it. Used for a wide variety of treatments, including various cancers, rheumatoid arthritis, and multiple sclerosis. • Blood modifier. Drugs that enhance or inhibit the clotting or thinning of blood, treat hemophilia, and stimulate bone marrow production. However, the leading therapeutic categories differed between drugs with higher and lower Medicare market share. Among the drugs with Medicare market share at or above 50 percent, the leading category was antineoplastic, followed by immunological, whereas among the group with lower Medicare market share, the leading category was blood modifier followed by immunological (see fig. 4). Page 11 GAO-18-83 Medicare's Market Share for Part B Drugs Figure 4: Therapeutic Categories for 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price, Calendar Year 2015 Notes: We defined Medicare’s market share as the percentage of total units of a drug sold that were provided to beneficiaries in the Medicare fee-for-service program. Antineoplastic agents are substances that inhibit or prevent the proliferation of neoplasms—abnormal growths of tissue—often associated with cancer. Immunological drugs modify the immune response, either by enhancing or suppressing it. Blood modifier agents enhance or inhibit the clotting or thinning of blood. Totals may not add to 100 percent due to rounding. To identify high expenditure Part B drugs for this analysis, we used Medicare fee-for-service claims data for calendar year 2015 to determine the 50 drugs with the highest total expenditures and the 50 drugs with the highest expenditures per beneficiary. In total we analyzed 84 drugs because 16 drugs were in both groups. The drugs with the highest Medicare market share have been approved by the Food and Drug Administration to treat conditions that are more prevalent among the Medicare population. For example, two of the five drugs with the highest Medicare market share are Lucentis and Eylea, with Medicare market shares of 71 percent and 65 percent, respectively. Page 12 GAO-18-83 Medicare's Market Share for Part B Drugs Both are approved to treat age-related macular degeneration, a common disease among those aged 50 and older where the eyes deteriorate. 20 Brovana, with Medicare market share of 65 percent, is approved to treat chronic obstructive pulmonary disease, a respiratory illness that is more prevalent among older age groups. 21 In contrast, most of the drugs we analyzed with the lowest Medicare market share—below 10 percent—are approved to treat hemophilia and related conditions that are uncommon among the Medicare population. For more information on the drugs we analyzed, including their therapeutic categories, see appendix I. We provided a draft of this report to the Department of Health and Human Agency Comments Services, the agency that oversees CMS. The department provided us with technical comments, which we incorporated as appropriate. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies of this report to the Secretary of Health and Human Services and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staffs have any questions regarding this report, please contact me at (202) 512-7114 or cosgrovej@gao.gov. Contact points for 20 Together, Lucentis and Eylea accounted for $3 billion in expenditures and had 120,000 and 180,000 beneficiaries, respectively, in 2015. See table 1, appendix I, for more information. 21 Chronic obstructive pulmonary disease is an umbrella term used to describe progressive lung diseases such as emphysema, chronic bronchitis, and nonreversible asthma. It is characterized by increasing breathlessness, and has no cure. Page 13 GAO-18-83 Medicare's Market Share for Part B Drugs our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix III. James Cosgrove Director, Health Care Page 14 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, andAppendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Characteristics of 84 High-Expenditure Part Price B Drugs Paid on the Basis of Average Sales Price We used Medicare fee-for-service (FFS) claims data for calendar year 2015 to identify the highest expenditure Part B drugs paid based on average sales price (ASP)—the 50 with the highest total expenditures and the 50 with the highest expenditures per beneficiary. 1 In total we analyzed 84 drugs because 16 drugs were in both groups. The following tables summarize information on the 84 drugs we analyzed, including Medicare’s market share, expenditures, and other characteristics. We defined Medicare’s market share as the percentage of total units of a drug sold that were provided to beneficiaries in the Medicare FFS program. Table 1: Medicare Expenditures and Utilization for 84 High-Expenditure Part B Drugs Paid on Average Sales Price, Calendar Year 2015, by Medicare Market Share Healthcare Common Procedure Total Coding Drug brand-name Medicare’s expenditures Expenditures Rank in System example market share (dollars in Rank in Unique per beneficiary expenditures (HCPCS) (description) (percentage) millions) expenditures beneficiaries (dollars) per beneficiary J2778 Lucentis (Ranibizumab injection) 71 1,168 5 119,623 9,765 98 J9025 Vidaza (Azacitidine injection) 66 143 42 8,901 16,102 80 J0178 Eylea (Aflibercept injection) 65 1,841 1 180,018 10,227 96 J7605 Brovana (Arformoterol non- comp unit) 65 182 33 68,729 2,645 153 Q2043 Provenge (Sipuleucel-t auto cd54+) 64 173 36 1,795 96,327 18 J9395 Faslodex (Fulvestrant injection) 64 188 32 15,220 12,339 90 J9043 Jevtana (Cabazitaxel injection) 64 75 62 2,122 35,406 37 J7518 Myfortic (Mycophenolic acid) 62 118 48 27,538 4,292 125 1 There were 17 drugs with high per-beneficiary expenditures that each had fewer than 50 unique beneficiaries in calendar year 2015. We excluded these drugs, which accounted for $36 million in total expenditures and had 262 unique beneficiaries. Page 15 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Healthcare Common Procedure Total Coding Drug brand-name Medicare’s expenditures Expenditures Rank in System example market share (dollars in Rank in Unique per beneficiary expenditures (HCPCS) (description) (percentage) millions) expenditures beneficiaries (dollars) per beneficiary J9047 Kyprolis (Carfilzomib injection) 60 230 27 5,559 41,354 34 J0897 Xgeva (Denosumab injection) 59 926 7 354,737 2,609 156 J9302 Arzerra (Ofatumumab injection) 59 15 122 356 41,306 35 J2796 NPlate (Romiplostim injection) 58 160 39 3,759 42,624 32 J9307 Folotyn (Pralatrexate injection) 58 18 115 201 88,626 21 J9315 Isodax (Romidepsin injection) 57 31 92 412 75,805 23 J9305 Almita (Pemetrexed injection) 53 552 9 21,901 25,201 51 A9606 Xofigo (Radium Ra223 dichloride) 53 125 46 2,841 44,127 31 J9217 Eligard (Leuprolide acetate suspension) 53 280 18 145,826 1,921 169 J9041 Velcade (Bortezomib injection) 53 510 10 20,998 24,275 54 J9303 Vectibix (Panitumumab injection) 51 80 59 2,613 30,429 43 J1602 Simponi Aria (Golimumab for iv use) 50 128 45 7,725 16,519 78 J0894 Dacogen (Decitabine injection) 50 104 50 4,529 22,995 57 J9033 Treanda (Bendamustine injection) 50 313 13 12,136 25,753 50 J9055 Erbitux (Cetuximab injection) 48 246 22 8,759 28,077 46 Page 16 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Healthcare Common Procedure Total Coding Drug brand-name Medicare’s expenditures Expenditures Rank in System example market share (dollars in Rank in Unique per beneficiary expenditures (HCPCS) (description) (percentage) millions) expenditures beneficiaries (dollars) per beneficiary J9264 Abraxane (Paclitaxel protein bound) 47 279 19 17,801 15,688 82 J2353 Sandostatin Lar Depot (Octreotide injection depot) 47 383 12 10,866 35,216 38 J9228 Yervoy (Ipilimumab injection) 46 218 28 2,332 93,616 20 J9310 Rituxan (Rituximab injection) 45 1,575 2 68,352 23,036 56 A9543 Zevalin Y-90 (Y90 ibritumomab rx) 44 4 179 91 44,453 30 J2469 Aloxi (Palonosetron HCl) 44 180 34 152,653 1,178 193 J9035 Avastin (Bevacizumab injection) 44 1,128 6 208,100 5,422 114 J1459 Privigen (Ivig privigen injection 500 mg) 43 208 30 9,669 21,499 59 J3262 Actemra (Tocilizumab injection) 43 159 40 10,141 15,694 81 J7686 Tyvaso (Treprostinil non-comp unit) 42 216 29 1,966 109,776 17 Q4074 Ventavis (Iloprost non-comp unit dose) 41 51 77 385 132,542 16 J7325 Synviscone (Synvisc or Synvisc- one) 40 144 41 162,337 884 209 J9354 Kadcyla (Ado-trastuzumab emt injection 1 mg) 40 106 49 2,175 48,846 29 J2505 Neulasta (Pegfilgrastim injection 6 mg) 39 1,270 3 96,570 13,153 87 Page 17 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Healthcare Common Procedure Total Coding Drug brand-name Medicare’s expenditures Expenditures Rank in System example market share (dollars in Rank in Unique per beneficiary expenditures (HCPCS) (description) (percentage) millions) expenditures beneficiaries (dollars) per beneficiary J0129 Orencia (Abatacept injection) 38 457 11 20,716 22,079 58 J1568 Octagam (Octagam injection) 37 167 38 8,161 20,520 65 J0881 Aranesp (Darbepoetin alfa, non- end-stage renal disease (ESRD)) 37 297 14 58,231 5,104 118 J9042 Adcetris (Brentuximab vedotin injection) 36 62 68 827 75,401 24 J0221 Lumizyme (Lumizyme injection) 32 56 71 114 487,341 3 J1300 Soliris (Eculizumab injection) 31 234 24 621 376,636 4 J2507 Krystexxa (Pegloticase injection) 31 18 113 287 62,990 27 J8521 Xeloda (Capecitabine 500 mg oral 1 tab per unit) 31 196 31 12,209 7,317 106 J1745 Remicade (Infliximab injection) 30 1,256 4 58,449 21,483 60 J9355 Herceptin (Trastuzumab injection) 29 649 8 19,930 32,548 41 C9027 Keytruda (Pembrolizumab injection) 28 96 54 2,306 41,424 33 J1930 Somatuline Depot (Lanreotide injection) 28 27 95 1,045 26,135 49 J2323 Tysabri (Natalizumab injection) 26 291 16 7,236 40,181 36 J1561 Gamunex-C (Gamunex-C/ Gammaked) 25 284 17 10,313 27,497 47 J9306 Perjeta (Pertuzumab injection 1 mg) 25 168 37 5,851 28,645 45 Page 18 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Healthcare Common Procedure Total Coding Drug brand-name Medicare’s expenditures Expenditures Rank in System example market share (dollars in Rank in Unique per beneficiary expenditures (HCPCS) (description) (percentage) millions) expenditures beneficiaries (dollars) per beneficiary J2785 Regadenoson (Regadenoson injection) 23 119 47 567,048 209 268 J7626 Budesonide (Budesonide non- comp unit) 23 234 25 136,468 1,713 175 J1569 Gammagard liquid (Gammagard liquid injection) 21 233 26 10,950 21,312 61 J1786 Cerezyme (Imuglucerase injection) 21 42 86 176 237,726 9 J1640 Panheamtin (Hemin 1 mg) 21 10 138 107 95,872 19 J2357 Xolair (Omalizumab injection) 20 275 20 13,248 20,738 64 J0717 Cimzia (Certolizumab pegol injection 1 mg) 20 177 35 9,926 17,858 71 C9453 Opdivo (Nivolumab injection) 19 134 43 5,540 24,120 55 C9025 Cyramza (Ramucirumab injection) 19 47 81 1,556 29,931 44 J1442 Neupogen (Filgrastim g-csf injection 1 mcg) 18 129 44 39,138 3,290 142 J0180 Fabrazyme (Agalsidase beta injection) 18 52 75 264 195,346 12 J3385 VPRIV (Velaglucerase alfa) 17 27 96 104 260,288 7 J0585 Botox (Onabotulinumtoxina injection) 15 256 21 116,587 2,195 161 J9017 Trisenox (Arsenic trioxide injection) 13 7 156 208 32,733 40 Page 19 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Healthcare Common Procedure Total Coding Drug brand-name Medicare’s expenditures Expenditures Rank in System example market share (dollars in Rank in Unique per beneficiary expenditures (HCPCS) (description) (percentage) millions) expenditures beneficiaries (dollars) per beneficiary J0256 Aralast NP (Alpha 1 proteinase inhibitor) 12 68 64 923 73,635 25 J0257 Glassia (Glassia injection) 12 6 159 118 49,857 28 J0885 Procrit (Epoetin alfa, non- ESRD) 11 294 15 85,873 3,426 137 Q9979 Lemtrada (Alemtuzumab injection) 10 11 134 133 84,640 22 J9027 Clofar (Clofarabine injection) 3 2 200 75 32,513 42 J7187 Humate-P (Humate-P injection) 3 24 102 343 69,507 26 J7190 Hemofil M (Factor VIII) 3 26 97 161 162,205 15 J7195 Benefix (Factor IX recombinant) 2 55 72 279 196,109 11 J3357 Stelara (Ustekinumab injection) 2 31 91 1,155 27,158 48 Q9975 Eloctate (Factor VIII Fc fusion recombinant) 2 27 94 91 301,426 5 J7193 Alphanine SD (Factor IX non- recombinant) 1 15 123 81 179,853 14 J7201 Alprolix (Factor IX Fc fusion recombinant) 1 32 90 66 489,607 2 J7189 Novoseven RT (Factor VIIa) 1 100 52 187 535,684 1 J7192 Advate (Factor VIII recombinant nos) 1 234 23 957 245,013 8 Page 20 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Healthcare Common Procedure Total Coding Drug brand-name Medicare’s expenditures Expenditures Rank in System example market share (dollars in Rank in Unique per beneficiary expenditures (HCPCS) (description) (percentage) millions) expenditures beneficiaries (dollars) per beneficiary J7198 Feiba NF (Anti-inhibitor) 1 47 80 169 276,560 6 J7186 Alphanate (Antihemophilic VIII/VWF comp) 1 12 131 60 192,538 13 J7185 Xynta (Xyntha injection) 0.37 16 119 80 199,023 10 Q3027 Avonex (Beta interferon injection im 1 mcg) 0.37 4 174 136 32,968 39 Source: GAO analysis of Centers for Medicare & Medicaid Services and RED BOOK data. | GAO-18-83 Notes: We defined Medicare’s market share as the percentage of total units of a drug sold that were provided to beneficiaries in the Medicare fee-for-service program. Expenditures reflect the total amount spent by the Medicare fee-for-service program and its beneficiaries, and include only those for claim line items that Medicare paid based on ASP. We defined a drug at the HCPCS level and counted it as a Part B ASP drug if it had at least one claim line item paid based on ASP. Some HCPCS cover more than one brand-name drug. To identify high-expenditure Part B drugs for this analysis, we used Medicare fee-for-service claims data for calendar year 2015 to determine the 50 drugs with the highest total expenditures and the 50 drugs with the highest expenditures per beneficiary. In total we analyzed 84 drugs because 16 drugs were in both groups. Page 21 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Table 2: Characteristics for 84 High-Expenditure Part B Drugs Paid on Average Sales Price, Calendar Year 2015, by Medicare Market Share Drug Characteristics Healthcare Common Procedure First year Coding Drug brand-name Medicare’s brand-name System examplea market share drug on the Synthetic Brand only or Single or (HCPCS) (description) (percentage) market Therapeutic category or biologic generic available multisource J2778 Lucentis 71 2006 Ophthalmologic Biologic Brand only Single (Ranibizumab source injection) J9025 Vidaza 66 2004 Antineoplastic Synthetic Generic Multisource (Azacitidine injection) available J0178 Eylea 65 2011 Ophthalmologic Biologic Brand only Single (Aflibercept injection) source J7605 Brovana 65 2007 Respiratory Synthetic Brand only Single (Arformoterol non- source comp unit) Q2043 Provenge 64 2010 Immunological Biologic Brand only Single (Sipuleucel-t auto source cd54+) J9395 Faslodex 64 2002 Antineoplastic Synthetic Brand only Single (Fulvestrant injection) source J9043 Jevtana 64 2010 Antineoplastic Synthetic Brand only Single (Cabazitaxel injection) source J7518 Myfortic 62 2004 Immunological Synthetic Generic Multisource (Mycophenolic acid) available J9047 Kyprolis 60 2012 Antineoplastic Synthetic Brand only Single (Carfilzomib injection) source J0897 Xgeva 59 2010 Immunological Biologic Brand only Single (Denosumab injection) source J9302 Arzerra 59 2011 Immunological Biologic Brand only Single (Ofatumumab source injection) J2796 NPlate 58 2008 Blood modifier Biologic Brand only Single (Romiplostim injection) source J9307 Folotyn 58 2009 Antineoplastic Synthetic Brand only Single (Pralatrexate injection) source J9315 Isodax 57 2010 Antineoplastic Synthetic Brand only Single (Romidepsin injection) source Page 22 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Drug Characteristics Healthcare Common Procedure First year Coding Drug brand-name Medicare’s brand-name System examplea market share drug on the Synthetic Brand only or Single or (HCPCS) (description) (percentage) market Therapeutic category or biologic generic available multisource J9305 Almita 53 2004 Antineoplastic Synthetic Brand only Single (Pemetrexed injection) source A9606 Xofigo 53 2013 Radiopharmaceutical Synthetic Brand only Single (Radium Ra223 source dichloride) a J9217 Eligard 53 2003 Antineoplastic Synthetic Brand only Multisource (Leuprolide acetate suspension) J9041 Velcade 53 2003 Antineoplastic Synthetic Brand only Single (Bortezomib injection) source J9303 Vectibix 51 2006 Immunological Biologic Brand only Single (Panitumumab source injection) J1602 Simponi Aria 50 2013 Immunological Biologic Brand only Single (Golimumab for iv use) source J0894 Dacogen 50 2009 Antineoplastic Synthetic Generic Multisource (Decitabine injection) available J9033 Treanda 50 2008 Antineoplastic Synthetic Brand only Single (Bendamustine Source injection) J9055 Erbitux 48 2004 Antineoplastic Biologic Brand only Single (Cetuximab injection) source J9264 Abraxane 47 2005 Antineoplastic Synthetic Brand only Single (Paclitaxel protein source bound) J2353 Sandostatin Lar Depot 47 2004 Endocrine metabolic Synthetic Brand only Single (Octreotide injection source depot) J9228 Yervoy 46 2011 Antineoplastic Biologic Brand only Single (Ipilimumab injection) source J9310 Rituxan 45 1997 Antineoplastic Biologic Brand only Single (Rituximab injection) source A9543 Zevalin Y-90 44 2009 Antineoplastic Biologic Brand only Single (Y90 ibritumomab rx) source J2469 Aloxi 44 2009 Gastrointestinal Synthetic Brand only Single (Palonosetron HCl) source Page 23 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Drug Characteristics Healthcare Common Procedure First year Coding Drug brand-name Medicare’s brand-name System examplea market share drug on the Synthetic Brand only or Single or (HCPCS) (description) (percentage) market Therapeutic category or biologic generic available multisource J9035 Avastin 44 2004 Immunological Biologic Brand only Single (Bevacizumab source injection) J1459 Privigen 43 2008 Immunological Biologic Brand only Single (Ivig privigen injection source 500 mg) J3262 Actemra 43 2010 Immunological Biologic Brand only Single (Tocilizumab injection) source J7686 Tyvaso 42 2009 Cardiovascular Synthetic Brand only Single (Treprostinil non-comp source unit) Q4074 Ventavis 41 2009 Cardiovascular Synthetic Brand only Single (Iloprost non-comp source unit dose) J7325 Synviscone 40 2005 Musculoskeletal Biologic Brand only Single (Synvisc or Synvisc- source one) J9354 Kadcyla 40 2013 Antineoplastic Biologic Brand only Single (Ado-trastuzumab emt source injection 1 mg) J2505 Neulasta 39 2002 Blood modifier Biologic Brand only Single (Pegfilgrastim injection source 6 mg) J0129 Orencia 38 2006 Immunological Biologic Brand only Single (Abatacept injection) source J1568 Octagam 37 2004 Immunological Biologic Brand only Single (Octagam injection) source J0881 Aranesp 37 2006 Blood modifier Biologic Brand only Single (Darbepoetin alfa, source non-end-stage renal disease (ESRD)) J9042 Adcetris 36 2011 Antineoplastic Biologic Brand only Single (Brentuximab vedotin source injection) J0221 Lumizyme 32 2014 Endocrine metabolic Biologic Brand only Single (Lumizyme injection) source Page 24 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Drug Characteristics Healthcare Common Procedure First year Coding Drug brand-name Medicare’s brand-name System examplea market share drug on the Synthetic Brand only or Single or (HCPCS) (description) (percentage) market Therapeutic category or biologic generic available multisource J1300 Soliris 31 2007 Blood modifier Biologic Brand only Single (Eculizumab injection) source J2507 Krystexxa 31 2010 Musculoskeletal Biologic Brand only Single (Pegloticase injection) source J8521 Xeloda 31 2003 Antineoplastic Synthetic Generic Multisource (Capecitabine 500 mg available oral 1 tab per unit) J1745 Remicade 30 1998 Immunological Biologic Brand only Single (Infliximab injection) source J9355 Herceptin 29 2003 Immunological Biologic Brand only Single (Trastuzumab source injection) C9027 Keytruda 28 2014 Antineoplastic Biologic Brand only Single (Pembrolizumab source injection) J1930 Somatuline Depot 28 2009 Endocrine metabolic Synthetic Brand only Single (Lanreotide injection) source J2323 Tysabri 26 2013 Immunological Biologic Brand only Single (Natalizumab source injection) a J1561 Gamunex-C 25 2005 Immunological Biologic Brand only Multisource (Gamunex-C/ Gammaked) J9306 Perjeta 25 2012 Antineoplastic Biologic Brand only Single (Pertuzumab injection source 1 mg) J2785 Regadenoson 23 2008 Diagnostic Synthetic Brand only Single (Regadenoson source injection) J7626 Budesonide 23 2000 Respiratory Synthetic Generic Multisource (Budesonide non- available comp unit) J1569 Gammagard liquid 21 2011 Immunological Biologic Brand only Single (Gammagard liquid source injection) J1786 Cerezyme 21 1999 Gastrointestinal Synthetic Brand only Single (Imuglucerase source injection) Page 25 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Drug Characteristics Healthcare Common Procedure First year Coding Drug brand-name Medicare’s brand-name System examplea market share drug on the Synthetic Brand only or Single or (HCPCS) (description) (percentage) market Therapeutic category or biologic generic available multisource a J1640 Panheamtin 21 2005 Blood modifier Biologic Brand only Multisource (Hemin 1 mg) J2357 Xolair 20 2003 Respiratory Biologic Brand only Single (Omalizumab source injection) J0717 Cimzia 20 2008 Immunological Biologic Brand only Single (Certolizumab pegol source injection 1 mg) C9453 Opdivo 19 2014 Antineoplastic Biologic Brand only Single (Nivolumab injection) source C9025 Cyramza 19 2014 Immunological Biologic Brand only Single (Ramucirumab source injection) J1442 Neupogen 18 1997 Blood modifier Biologic Brand only Single (Filgrastim g-csf source injection 1 mcg) J0180 Fabrazyme 18 2003 Endocrine metabolic Biologic Brand only Single (Agalsidase beta source injection) J3385 VPRIV 17 2010 Gastrointestinal Synthetic Brand only Single (Velaglucerase alfa) source J0585 Botox 15 1993 Musculoskeletal Biologic Brand only Single (Onabotulinumtoxina source injection) J9017 Trisenox 13 2006 Antineoplastic Synthetic Brand only Single (Arsenic trioxide source injection) a J0256 Aralast NP 12 2003 Blood modifier Biologic Brand only Multisource (Alpha 1 proteinase inhibitor) J0257 Glassia 12 2010 Blood modifier Biologic Brand only Single (Glassia injection) source a J0885 Procrit 11 1990 Blood modifier Biologic Brand only Multisource (Epoetin alfa, non- ESRD) Page 26 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Drug Characteristics Healthcare Common Procedure First year Coding Drug brand-name Medicare’s brand-name System examplea market share drug on the Synthetic Brand only or Single or (HCPCS) (description) (percentage) market Therapeutic category or biologic generic available multisource Q9979 Lemtrada 10 2014 Immunological Biologic Brand only Single (Alemtuzumab source injection) J9027 Clofar 3 2004 Antineoplastic Synthetic Brand only Single (Clofarabine injection) source J7187 Humate-P 3 2010 Blood modifier Biologic Brand only Single (Humate-P injection) source J7190 Hemofil M 3 2007 Blood modifier Biologic Generic Multisource (Factor VIII) available J7195 Benefix 2 2007 Blood modifier Biologic Brand only Single (Factor IX source recombinant) J3357 Stelara 2 2010 Immunological Biologic Brand only Single (Ustekinumab source injection) Q9975 Eloctate 2 2014 Blood modifier Biologic Brand only Single (Factor VIII Fc fusion source recombinant) a J7193 Alphanine SD 1 2003 Blood modifier Biologic Brand only Multisource (Factor IX non- recombinant) J7201 Alprolix 1 2014 Blood modifier Biologic Brand only Single (Factor IX Fc fusion source recombinant) J7189 Novoseven RT 1 2008 Blood modifier Biologic Brand only Single (Factor VIIa) source a J7192 Advate 1 2007 Blood modifier Biologic Brand only Multisource (Factor VIII recombinant nos) J7198 Feiba NF 1 2010 Blood modifier Biologic Generic Single (Anti-inhibitor) available source J7186 Alphanate 1 2007 Blood modifier Biologic Generic Single (Antihemophilic available source VIII/VWF comp) J7185 Xynta 0.37 2008 Blood modifier Biologic Brand only Single (Xyntha injection) source Page 27 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix I: Expenditures, Beneficiaries, and Characteristics of 84 High-Expenditure Part B Drugs Paid on the Basis of Average Sales Price Drug Characteristics Healthcare Common Procedure First year Coding Drug brand-name Medicare’s brand-name System examplea market share drug on the Synthetic Brand only or Single or (HCPCS) (description) (percentage) market Therapeutic category or biologic generic available multisource Q3027 Avonex 0.37 1996 Immunological Biologic Brand only Single (Beta interferon source injection im 1 mcg) Source: GAO analysis of Centers for Medicare & Medicaid Services, Food and Drug Administration, and RED BOOK data. | GAO-18-83 Notes: We defined Medicare’s market share as the percentage of total units of a drug sold that were provided to beneficiaries in the Medicare fee-for-service program. Expenditures reflect the total amount spent by the Medicare fee-for-service program and its beneficiaries, and include only those for claim line items that Medicare paid based on ASP. We defined a drug at the HCPCS level and counted it as a Part B ASP drug if it had at least one claim line item paid based on ASP. To identify high expenditure Part B drugs for this analysis, we used Medicare fee-for-service claims data for calendar year 2015 to determine the 50 drugs with the highest total expenditures and the 50 drugs with the highest expenditures per beneficiary. In total we analyzed 84 drugs because 16 drugs were in both groups. a A single HCPCS code can cover multiple brand-name drug products. Therefore, it is possible to have a multisourced brand drug. Page 28 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix II: Data and Methods Appendix II: Data and Methods This appendix details the data and methodology we used to describe Medicare’s market share for high-expenditure Part B drugs paid on the basis of average sales price (ASP) and the characteristics of those drugs. To determine Medicare’s market share for high-expenditure Part B drugs paid on the basis of ASP, we used Medicare fee-for-service (FFS) claims data from 2015, the most recent full year of claims data available at the time of our analysis. 1 We first identified all Part B drug Healthcare Common Procedure Coding System (HCPCS) codes, which the Centers for Medicare & Medicaid Services (CMS) uses to identify certain Medicare services such as Part B drugs for billing purposes. A single HCPCS code can cover multiple drug products with different National Drug Codes (NDC), which are universal product identifiers assigned by the Food and Drug Administration. We used the list of HCPCS codes to identify all claim line items for Part B drugs during 2015. We then restricted the claim line items to those that were paid based on ASP by removing claim line items for drugs and facilities that were paid based on other payment methodologies. 2 Next, we analyzed Medicare expenditures for each drug, defined as the total amount spent by the Medicare FFS program and its beneficiaries, and the number of unique beneficiaries who received the drug to identify the 50 Part B ASP drugs with the highest total Medicare expenditures and the 50 with the highest expenditures per beneficiary in 2015. 3 In total we analyzed 84 drugs because 16 were in both groups. These 84 drugs accounted for 79 percent of total Part B spending in 2015, and represented expenditures per beneficiary that ranged from $209 to $535,684. 4 (For the complete list of these 84 drugs, see app. I.) 1 Specifically, we used the June 2016 updates of the Centers for Medicare & Medicaid Services’ 2015 100 percent National Claims History file for physician services and durable medical equipment services and the hospital outpatient standard analytical file. 2 We also removed claim line items where Medicare was not the primary payer and thus did not set the payment rate. 3 The spending and utilization estimates do not include drugs for which Medicare’s payment is bundled with that of a related service—which occurs for many drugs administered in hospital outpatient departments—or spending for the administration or dispensing of the drugs. 4 There were 17 drugs with high per-beneficiary expenditures that each had fewer than 50 unique beneficiaries in calendar year 2015. We excluded these drugs, which accounted for $36 million in total expenditures and had 224 unique beneficiaries. Page 29 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix II: Data and Methods We defined Medicare’s market share as the percentage of total units of a drug sold by its manufacturer(s) that were provided to Medicare beneficiaries. To calculate Medicare’s market share for each of the 84 drugs in our analysis, we used Medicare FFS claims data together with data submitted to CMS by manufacturers on the total number of units sold in 2015 as follows: 5 𝑈𝑈𝑈𝑈𝑈𝑈 𝑈𝑈 𝑈𝑈 𝑜𝑜𝑜𝑜 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑡𝑡𝑡𝑡 𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝐹𝐹𝐹𝐹𝐹𝐹 𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏 𝑖𝑖𝑖𝑖 𝑐𝑐𝑐𝑐𝑐𝑐 𝑐𝑐 𝑛𝑛𝑑𝑑𝑑𝑑𝑑𝑑 𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦 2015 � � 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑜𝑜𝑜𝑜 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 𝑏𝑏𝑏𝑏 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚 𝑖𝑖𝑖𝑖 𝑐𝑐𝑐𝑐𝑐𝑐 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦 2015 To examine various characteristics of the 84 drugs in our sample we used the claims data, Food and Drug Administration’s NDC Product Summary File, and Truven Health Analytics’ RED BOOK, which publishes drug pricing and product information. Characteristics we analyzed included • single source or multisource manufacturer, • brand-name or generic, • biologic or synthetic, and • therapeutic category. Because the level at which Medicare defines a Part B drug differs from the level used in the Product Summary File and RED BOOK, we used CMS crosswalks to generate a list of NDCs associated with a given HCPCS code, and then summarized the NDC-level drug characteristics at the HCPCS-level. Although CMS’s crosswalks do not necessarily include a complete list of all NDCs associated with that HCPCS code, we determined this approach was sufficiently reliable for the purposes of this report. To assess the reliability of the Medicare claims data, and other data sources described above, we reviewed relevant documentation, 5 The drug manufacturers that submit sales data to CMS include those that participate in the Medicaid drug rebate program. As such, they are required to submit data to CMS on all sales of Part B drugs to all U.S. purchasers, including physicians, hospitals, and wholes sale distributors. See 42 U.S.C. §1396r-8(a)(1),(b)(3)(A). Most drug manufacturers participate in the Medicaid drug rebate program, and those who do not may voluntarily submit sales data to CMS. The manufacturers’ data do not include nominal sales to certain entities, and sales or discounts to other federal agencies and programs, such as the Department of Veterans Affairs, the Department of Defense, and Medicare Part D plans. See 42 C.F.R. § 414.804(a)(5) (2016). Page 30 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix II: Data and Methods performed electronic data checks for missing data or obvious errors, and interviewed agency officials familiar with these data sources. We also benchmarked our results against published sources by, for example, comparing the drug expenditures amounts on the Medicare claims data to information published by CMS. We determined that the data used in this report were sufficiently reliable for the purposes of our analysis. Page 31 GAO-18-83 Medicare's Market Share for Part B Drugs Appendix III: GAO Contact and Staff Appendix III: GAO Contact and Staff Acknowledgments Acknowledgments James Cosgrove, (202) 512-7114 or cosgrovej@gao.gov GAO Contact In addition to the contact named above, individuals who made key Staff contributions to this report included Will Black, Assistant Director; Acknowledgments Kristeen McLain, Analyst-in-Charge; George Bogart; Zhi Boon; Daniel Lee; Yesook Merrill; Elizabeth T. Morrison; Ashley Nurhussein; and Vikki Porter. (101210) Page 32 GAO-18-83 Medicare's Market Share for Part B Drugs The Government Accountability Office, the audit, evaluation, and investigative GAO’s Mission arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. 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