An eye-popping bill for just a handful of specialty medications is in the pipeline for the federal government—and therefore, taxpayers—in the next 10 years, the health insurance industry's lead trade group warned Monday.
"We are witnessing a return to dramatic increases of year-to-year drug spending," said Dan Durham, interim CEO of America's Health Insurance Plans.
The research, commissioned by AHIP and prepared by the Avalere Health consulting group, projects the federal government in the next decade will have to spend almost $50 billion on just 10 so-called breakthrough medications alone, with most of those drugs having yet to hit the market.
Those breakthrough medications—for certain cancers and chronic conditions, such as hepatitis C—get priority or expedited review for approval from the Food and Drug Administration.
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Most of the projected spending will come from $31.3 billion in increased drug costs tied to Medicare, the federal health insurance program for senior citizens, according to the research.
Another $16 billion in costs will be paid by Medicaid, the government health coverage program for the poor. The remaining amount, more than $2 billion, will come from spending on subsidies for customers of government-run Obamacare health insurance exchanges, Avalere estimates.