10 prescription drugs accounted for 1/5 of Part D spending in 2021

A new KFF analysis finds that the 10 top-selling prescription drugs under Medicare Part D comprised less than 1 percent of all covered drugs in 2021, but accounted for 22 percent, or $48 billion, of gross Medicare Part D drug spending that year.

The analysis provides context for understanding the federal government’s new authority under the Inflation Reduction Act to negotiate prices for some high-spending drugs covered by Part D, Medicare’s outpatient prescription drug benefit program, and Part B, which covers physician and outpatient services, including drugs administered by physicians and other providers.

All of the 10 top-selling Medicare Part D drugs in 2021 were brand-name drugs. Five of them were diabetes drugs, including Ozempic, which belongs to a class of medications that lately have gained attention because they are also effective for weight loss. Other drugs in the top 10 included Eliquis, a blood thinner that was the No. 1 selling drug in 2021, followed by Revlimid, a treatment for multiple myeloma, and Xarelto, a blood thinner.

While the drug price negotiations begin modestly with 10 drugs in the first year, KFF’s research shows that even a relatively small number of drugs can command a substantial share of spending in Medicare. The number of drugs subject to price negotiation will grow in subsequent years and may include drugs covered under Part B beginning in 2028. Drugs will be selected for negotiation from among those with the highest gross prescription drug costs under Medicare. 

It is important to note that this analysis, based on 2021 data from the Centers for Medicare and Medicaid Services (CMS), is not designed to identify which drugs are likely to be subject to price negotiation for 2026. CMS will use more current spending data and consider several factors, including FDA approval date and generic availability, in making that determination. CMS will publish the names of the first 10 Part D drugs selected for price negotiation by September 1, 2023.

In 2021, Part D covered more than 3,500 prescription drug products, with total gross spending of $216 billion, not accounting for rebates paid by drug manufacturers to pharmacy benefit managers. Total Part B drug spending was $40 billion on more than 600 covered drugs in 2021, but Part B drugs will not be subject to price negotiation until 2028.