Trend by Plan Type

Together, spend for the top five Medicare therapy classes contributed 46.6% or nearly half the total for all medications used by Medicare beneficiaries in 2020, vs. 44.2% in 2019. Spending declined for six of the top 15 therapy classes, driven mostly by reductions in unit costs.

The Centers for Medicare & Medicaid Services (CMS) have traditionally required Medicare plan sponsors to cover all medications in protected classes of drugs, including cancer, HIV, neurological disorders and others. Plans are less able to establish benefit strategies to drive down cost and promote effective use, leading to higher unit cost compared with commercial plans.

Trend for Medicaid plans was lower than for commercial plans, influenced by differences in the populations and their medication use. For example, medications used to treat COPD and chemical dependence are among the top 15 conditions in Medicaid but not in the commercial population. Medications for cancer, which increased 12.6% among commercial plans, decreased 5.0% for Medicaid plans.

The trend for health insurance exchange plans more closely mirrored trend for commercial plans than in the past. In 2020, it was 5.5% and 4.0% respectively, compared to 7.2% and 2.3% in 2019.

Enzyme deficiencies was in the top 15 therapy classes for exchange plans with 58.1% overall trend compared to only 23.8% in the same class for commercial plans.

Adverse selection likely played a small part in driving higher trend for health exchange plans. Of the top five classes, four are driven primarily by specialty medications, and the difference in prevalence rates among these classes compared to commercial plans is very small. There is significantly higher prevalence for high blood pressure/heart disease and high blood cholesterol classes in the exchange plans, but these classes are dominated by generics and have negative trend.