GAO-13-46R Medicare Part B Drug Spending

United States Government Accountability Office

Washington, DC 20548

October 12, 2012

The Honorable Herb Kohl

Chairman

Special Committee on Aging

United States Senate

The Honorable Dick Durbin

United States Senate

Subject: Medicare: High-Expenditure Part B Drugs

In 2010, the Medicare program and its beneficiaries spent about $19.5 billion on 

Part B drugs1—drugs that are commonly administered by a physician or under a 

physician’s close supervision in physicians’ offices and hospital outpatient 

departments.

2 Some of these drugs are particularly expensive for Medicare, either 

because they are used by a large number of beneficiaries or because their prices 

are high. These drugs generally differ from drugs beneficiaries obtain through 

Medicare Part D, which are usually self-administered and for which Medicare, its 

beneficiaries, and the states spent $61.7 billion in 2010.3

Medicare bases its payments for most Part B drugs on the average sales price 

(ASP), which is calculated from data that manufacturers report quarterly to the 

Centers for Medicare & Medicaid Services (CMS), the agency within the Department 

of Health and Human Services that administers Medicare. ASP is the average price, 

after rebates and discounts, of all sales of a specified drug in the United States; 

consequently, Medicare’s payment rates for Part B drugs are based on prices set by 

the private market.

You asked us to analyze trends in utilization and expenditures for high-expenditure 

Part B drugs and to estimate Medicare’s proportion of total U.S. expenditures for 

these high-expenditure drugs. This report examines (1) the Part B drugs for which 

 

1

Medicare Part B covers certain physician, outpatient hospital, laboratory and other services, and 

medical equipment and supplies. Under certain circumstances, drugs that are usually administered to 

outpatients may be administered to inpatients and covered by Medicare Part A.

2

In this report the terms “drugs” refers to chemically synthesized drugs and biologicals unless 

otherwise specified. Biologicals are products derived from living sources, including humans, animals, 

and microorganisms.

3

Medicare Part D is a voluntary program through which Medicare covers outpatient prescription 

drugs. The estimate of total expenditures includes beneficiary payments for premiums but excludes 

beneficiary expenditure-sharing.
 2 GAO-13-46R Medicare Part B Drug Spending

Medicare expenditures were highest in 2010 and the utilization and spending trends 

for these high-expenditure Part B drugs from 2008 to 2010, and (2) nationwide 

spending levels for the total U.S. population for these high-expenditure Part B drugs 

in 2010 and Medicare’s percentage of total U.S. spending.

To identify the highest-expenditure Part B drugs in 2010 (the latest year for which 

data were available) and examine their utilization and spending trends, we used the 

CMS National Claims History 5 Percent Sample for physician, hospital outpatient, 

and durable medical equipment (DME) claims for 2008, 2009, and 2010.4 We 

calculated the total amount spent on each Part B-covered drug in 2010 by the 

Medicare fee-for-service (FFS) program and by or on behalf of its beneficiaries and 

then ranked the drugs by total expenditures.5 We identified the 55 drugs with the 

highest total 2010 Medicare expenditures—that is, expenditures by the Medicare 

program and expenditures by or on behalf of beneficiaries—and examined the 

number of beneficiaries using each of these drugs and the average annual cost per 

beneficiary.6 For these 55 drugs, we also examined changes in total expenditures, 

beneficiary utilization, and prices from 2008 to 2010. We obtained information on the 

purpose and other characteristics of these drugs from the Food and Drug 

Administration (FDA), the National Institutes of Health (NIH), and manufacturers.

To estimate Medicare’s share of total U.S. spending for these 55 high-expenditure 

Part B drugs, we obtained estimates of total 2010 U.S. expenditures—excluding 

Medicare FFS—for each of the drugs from IMS Health, a company that collects and 

analyzes health care data. To make these estimates, IMS Health used its national 

claims database, which contains commercial health plan claims for more than 

60 million unique patients from more than 80 health plans across the United States.7

IMS Health used claims for all beneficiaries who had been enrolled throughout 2010, 

but removed claims from Medicare supplemental health insurance policies to avoid 

double counting these claims, which were also included in the Medicare claims. IMS 

Health then used age-gender population information reported by the U.S. Census to 

project its claims data to the entire insured U.S. population, excluding the Medicare 

FFS population. To estimate total spending and utilization for the U.S. non-Medicare 

population, IMS Health made the assumption that beneficiaries not included in IMS 

Health’s claims database, including those insured through certain government 

programs such as Medicaid, the Veterans Health Administration, and TRICARE,8

 

4

For each claim type, the CMS National Claims History 5 Percent Sample file contains a random 

sample of all claims paid by Medicare.

had expenditures similar to the commercially insured population of the same age 

5

Our ranking of highest-expenditure Part B drugs is a snapshot of total spending in 2010. The list of 

highest-expenditure Part B drugs will change over time as new drugs enter the market and drug 

utilization changes. CMS has noted that, while outside the scope of our analysis, several extremely 

expensive injectable products entered the market during or after 2010, including Provenge, Jevtana, 

Benlysta, and others.

6

For the remainder of this report, we use the term Medicare spending to refer to spending by the 

Medicare program and spending by or on behalf of Medicare beneficiaries.

7

IMS Health’s national claims data base is called the LifeLink Health Plan Claims Database.

8

TRICARE is the Department of Defense’s health care system for active duty and retired uniformed 

service members and their families.
 3 GAO-13-46R Medicare Part B Drug Spending

and gender. We used these projections plus 2010 Medicare FFS claims to estimate 

the spending on each of the 55 drugs for the total U.S. insured population in 2010, 

thereby enabling us to estimate Medicare’s share of spending for these drugs.

While we believe our analytical approach allows us to achieve our objectives, our 

analysis has some limitations. IMS Health projected expenditures from a large 

national claims database but, by definition, projections are subject to error. 

Furthermore, according to IMS Health, hospital outpatient expenditures are 

underrepresented by an unknown amount. To the extent that Part B drugs may, in 

certain circumstances, be paid under Part A, Medicare expenditures and utilization 

are also underrepresented by an unknown amount in the estimates of total U.S. 

expenditures.

We ensured the reliability of the Medicare claims data used in this report by 

performing appropriate electronic data checks and by interviewing agency officials 

who were knowledgeable about the data. We also checked total expenditures for the 

55 highest-expenditure Part B drugs in the claims data against the published total 

expenditures for these drugs in CMS’s Part B National Summary Files.9 IMS Health 

removed from its claims database cases where expenditure fields were not 

populated, and in cases where the paid amount was greater than the allowed 

amount, replaced the paid amount with the allowed amount. It also allowed only 

three claims per patient per day per code. When there were more than three, the 

three claims with the largest allowed amounts were retained. We found that the 

Medicare and IMS data were sufficiently reliable for the purposes of our analysis.

We conducted our work from August 2011 through August 2012 in accordance with 

all sections of GAO’s Quality Assurance Framework that are relevant to our 

objectives. The framework requires that we plan and perform the engagement to 

obtain sufficient and appropriate evidence to meet our stated objectives and to 

discuss any limitations to our work. We believe that the information and data 

obtained, and the analysis conducted, provide a reasonable basis for any findings 

and conclusions.

Results in Brief 

In 2010, the 55 highest-expenditure Part B drugs represented $16.9 billion in 

spending, or about 85 percent of all Medicare spending on Part B drugs, which 

totaled $19.5 billion. The number of Medicare beneficiaries who received each of 

these drugs varied from 15.2 million receiving the influenza vaccines to 660 

hemophilia A patients receiving a group of biologicals known collectively as factor viii 

recombinant, which had the largest average annual cost per beneficiary—

$217,000.10

 

9

This check resulted in the removal of one drug (factor viii recombinant) from our 2008 analyses of 

utilization and expenditures due to low reported expenditures in the 2008 Medicare claims data. 

Our analysis showed that most of the 55 drugs increased in 

expenditures, prices, and average annual cost per beneficiary from 2008 to 2010. 

The 5 drugs with the largest increase in Medicare expenditures over this time period 

10Hemophilia A is a hereditary bleeding disorder caused by a lack of blood clotting factor viii. Without 

enough factor viii, the blood cannot clot properly to stop bleeding.
 4 GAO-13-46R Medicare Part B Drug Spending

also had the largest increase in the number of beneficiaries receiving each drug. 

Four of the 10 drugs which showed the greatest increase in expenditures were also 

among the 10 drugs showing the greatest price increases.

Spending on Medicare beneficiaries accounted for the majority of estimated total 

U.S. spending for 35 of the 55 highest-expenditure Part B drugs in 2010. For 17 of 

the 35, Medicare spending accounted for more than two-thirds of total U.S. 

spending, defined as spending by the insured population in the United States.

Background

Medicare Part B generally covers drugs and biologicals administered under a 

physician’s direct supervision, including those administered in physician offices and 

in hospital outpatient departments that are not usually self-administered. These 

include drugs infused through DME, certain vaccines (influenza, pneumococcal, and 

hepatitis B)11, osteoporosis drugs, oral cancer drugs if the same drug is available in 

injectable form, antinausea drugs used as part of an anticancer chemotherapeutic 

regimen, erythropoiesis-stimulating agents,12 blood clotting factors for hemophilia 

patients, injectable drugs, and immunosuppressive drugs for transplant patients. The 

Medicare program pays 80 percent of the expenditures for Part B drugs and the 

beneficiary is responsible for the remaining 20 percent, which may be paid by 

supplemental coverage such as a Medicare supplemental health insurance policy,13

an employer-sponsored retiree health plan, or Medicaid. As of 2009, nearly 

90 percent of Medicare Part B beneficiaries had some form of supplemental 

coverage.

Payment to physicians is set at 106 percent of ASP for most Part B drugs they 

administer; however, payment for some Part B drugs is set on a different basis. 

Vaccines, infusion drugs furnished through DME, and blood products are paid at 

95 percent of average wholesale price (AWP), which is the manufacturer’s average 

price to wholesalers.14

 

11Influenza, pneumococcal, and hepatitis B vaccines for certain individuals are covered only under 

Medicare Part B, regardless of the setting in which they are furnished (for example, even when 

provided to an inpatient during a hospital stay covered under Medicare Part A). Other vaccines, such 

as the shingles vaccine, are covered under Medicare Part D.

In cases where the ASP of a new drug during the first quarter 

of sales is unavailable, payment may be set at 106 percent of the wholesale 

acquisition cost (WAC), which is the manufacturer’s list price to wholesalers. If the 

WAC is not yet available for the new drug, payment is based on the invoice price. 

Payment for Part B drugs administered in hospital outpatient departments is 

12Erythropoiesis-stimulating agents are used to stimulate the bone marrow to produce red blood cells.

13A Medicare supplemental health insurance policy is health insurance sold by private insurers that 

covers Medicare deductibles and copayments as well as some services that Medicare FFS does not 

cover.

14The prices used to determine payment rates for the vaccines and blood products are updated to 

reflect current AWPs. For DME infusion drugs, payment is based on the AWP in effect on October 1, 

2003. 
 5 GAO-13-46R Medicare Part B Drug Spending

determined based on ASP, though the rate can vary from year to year. In 2010, it 

was 104 percent of ASP.15

Additionally, for certain drugs such as drugs used to treat cancer, some new drugs, 

and orphan drugs,16 which are drugs used to treat rare diseases, Medicare makes 

additional payments for some drugs administered in the hospital outpatient setting, 

known as transitional pass-through payments, which can be paid for 2 to 3 years.17

For new drugs, pass-through status is intended to make the drugs accessible to 

beneficiaries while a pricing history is developed and the price is established.

New drugs can be patented and, while under patent, can be manufactured or sold 

solely by the patent holder. Patents generally last for 20 years from the date of 

application.18 After the patent expires and generic forms of the drug are marketed at 

significantly lower prices, the price of the original drug usually falls.19

Orphan drug status is granted by FDA to drugs that treat rare diseases—those that 

affect fewer than 200,000 people in the United States or for which there is no 

reasonable expectation of recovering the costs of development and marketing—and 

confers several benefits on the drug sponsor, including a 7-year period of market 

exclusivity.20

 

15Part B drugs in the hospital outpatient setting are paid separately if the per day expenditure of the 

drug exceeds a certain threshold set by CMS each year. In 2010, this threshold was $65 per day.

16Orphan drug status is granted by FDA to drugs and biologics that treat rare diseases. FDA provides 

this designation to medications intended to prevent, diagnose, or treat conditions that affect fewer 

than 200,000 people in the United States or to those that affect more than 200,000 persons, but 

whose sponsors have no reasonable expectation of recovering the costs of developing and marketing 

a treatment drug.

17In 2010, Medicare paid for pass-through drugs at 106 percent of ASP. The additional pass-through 

payment amount for 2010, therefore, was the difference between this amount and the usual payment 

limit of 104 percent of ASP for non-pass-through drugs in the hospital outpatient setting in 2010.

18Patents may be applied for and granted at any time during the development and testing of the drug. 

As a consequence, a sponsor may have fewer than 20 years to market the drug exclusively under the 

patent.

19Biological products do not have generic equivalents, but biosimilars or follow-on biologics serve a 

similar function. A biosimilar is a biological product that is highly similar to an already approved 

biological product, notwithstanding minor differences in clinically inactive components, and for which 

there are no clinically meaningful differences between the biosimilar and the approved biological 

product in terms of the safety, purity, and potency.

20During this 7-year period, FDA may not approve applications to market other versions of the same 

drug for the same diseases or conditions. See 21 U.S.C. § 360cc. This period can run concurrently 

with a patent term or not. It is granted for FDA-approved uses of a drug. Other benefits of orphan 

status may include a tax credit of 50 percent of the cost of conducting human clinical testing, research 

grants for clinical testing of new therapies to treat orphan diseases, and exemption from the fees that 

are typically charged when sponsors submit NDAs for FDA’s review.
 6 GAO-13-46R Medicare Part B Drug Spending

The Highest-Expenditure Medicare Part B Drugs Represented Most Part B 

Drug Spending in 2010 and Most Showed Increases in Spending, Utilization, 

and Price from 2008 to 2010

The 55 highest-expenditure Part B drugs accounted for 85 percent of all Part B drug 

spending in 2010. Utilization and annual spending per beneficiary for these drugs 

varied widely, but, like spending, generally increased between 2008 and 2010. 

Enclosure I contains a complete list of the 55 highest-expenditure Part B drugs in 

2010.

Fifty-five Highest-Expenditure Part B Drugs Accounted for Three-Quarters of Part B 

Drug Expenditures in 2010

In 2010, the 55 highest-expenditure Part B drugs represented $16.9 billion in 

spending, or about 85 percent of all Medicare spending on Part B drugs, which 

totaled $19.5 billion. The 10 highest-expenditure Part B drugs accounted for about 

45 percent of all Part B drug spending in 2010. Eight of the 10 most expensive were 

biological products as shown in table 1, and 4 of the 10 had orphan drug marketing 

exclusivity in 2010.21 None of the 10 highest-expenditure drugs had a generic 

version approved by FDA in 2010. Enclosure II provides information on the 

expenditures, utilization, and average annual per beneficiary cost for the 55 Part B 

drugs. Enclosure III provides a list of all the 55 drugs that had orphan drug marketing 

exclusivity in 2010. Enclosure IV provides information on the generic availability of 

the 55 highest-expenditure Part B drugs.

 

21Rtiuxan, Avastin, Remicade, and Almita had orphan drug marketing exclusivity.
 7 GAO-13-46R Medicare Part B Drug Spending

Table 1: Ten Highest-Expenditure Medicare Part B Drugs, 2010

2010 rank 

by total 

Medicare 

expenditures Brand name(s)

Drug 

description Classification Condition(s) treated

Total 2010 

expenditures 

for Medicare 

beneficiaries 

(dollars in 

millions)

1 Epogen/Procrit 

(ESRD use)

Epoetin alfa, 

ESRD

Biological a Anemia in end-stage 

renal disease (ESRD) 

patients

$2,000

2 Rituxan Rituximab 

injection

b Biological Cancer; rheumatoid 

arthritis 

1,302

3 Lucentis Ranibizumab 

injection

Biological Wet age-related 

macular degeneration 

(AMD) 

1,180

4 Avastin Bevacizumab 

injection

b Biological Cancer; wet AMD 1,130

5 Remicade Infliximab 

injection

b Biological Various autoimmune 

disorders

900

6 Neulasta Injection, 

pegfilgrastim 

6mg

Biological Prevent infection in 

chemotherapy 

patients

888

7 Aranesp 

(non-ESRD use)

Darbepoetin 

alfa, nonESRD 

Biological Anemia in chemotherapy 

patients

504

8 Epogen/Procrit 

(non-ESRD use)

Epoetin alfa, 

non-ESRD 

Biological Anemia in 

chemotherapy and HIV 

patients; prevent blood 

loss in surgical patients

443

9 Alimta Pemetrexed 

injection

b Drug Cancer 394

10 Taxotere Docetaxel 

injection

Drug Cancer 387

Total $9,128

Source: GAO analysis of CMS, FDA, NIH, and drug manufacturer data.

a

End-stage renal disease (ESRD) is also known as stage 5 chronic kidney disease.

b

These products had orphan drug marketing exclusivity for specific FDA-approved indications in 2010.

Medicare spent most—$2 billion—on the drug Epogen/Procrit22 for the treatment of 

anemia in end-stage renal disease (ESRD) patients.23

 

22Epogen/Procrit for the treatment of anemia in non-ESRD patients was the eighth most expensive 

Part B drug in 2010. ESRD is also known as stage 5 chronic kidney disease.

The second most expensive 

drug was Rituxan, which is used to treat non-Hodgkin’s lymphoma, a type of cancer, 

and rheumatoid arthritis. Lucentis, the third most expensive drug, is used to treat wet 

age-related macular degeneration (AMD), an eye condition, and during this period 

Avastin, a cancer drug which was the fourth most expensive, also was used off-label 

23Beginning in 2011, CMS implemented bundled payments for drugs and services to Medicare 

dialysis facilities, which treat ESRD, in part to discourage excessive use of separately billable drugs 

such as Epogen. Since then, Medicare has not paid separately for 5 of the 55 drugs in our analysis 

when they are used to treat chronic kidney disease: Epogen/Procrit, Aranesp, Zemplar, Venofer, and 

Hectorol.
 8 GAO-13-46R Medicare Part B Drug Spending

to treat wet AMD.24 There was considerable interest by physicians and other experts 

in using Avastin for this purpose in part because the expenditure per treatment was 

significantly less than for Lucentis. However, it was not known whether Avastin was 

comparable to Lucentis in efficacy. A clinical trial determined that Avastin and 

Lucentis were equally effective, but the first trial results were not available until 2011, 

and so did not affect utilization in 2010.

Of the 55 highest-expenditure Part B drugs, cancer and its side effects were treated 

by more drugs (23 drugs) than any other set of conditions in 2010. (See figure 1.) 

Other conditions that were treated by several drugs included immune system 

disorders such as rheumatoid arthritis (13 drugs) and chronic kidney disease 

(5 drugs).

Figure 1: Conditions Treated by the 55 Highest-Expenditure Medicare Part B Drugs, 2010

Notes: The sum of the high-expenditure Medicare Part B drugs exceeds 55 because some drugs were used to treat more than 

one type of condition.

a

Other includes conditions such as wet age-related macular degeneration, osteoarthritis of the knee, myelodysplastic 

syndrome, anemia in HIV and uterine fibroid patients, and prevention of influenza, pneumonia, and meningitis.

Utilization of High-Expenditure Part B Drugs Ranged from Millions of Beneficiaries 

for Vaccines to Hundreds for Hemophilia Drugs in 2010

Utilization of the 55 highest-expenditure Part B drugs ranged from over 15 million 

beneficiaries who received the influenza vaccine to 660 beneficiaries who used 

factor viii recombinant to treat hemophilia A.25

 

24Off-label use refers to using a drug for a condition or patient population for which the drug has not 

been approved by FDA or in a manner that is inconsistent with the information found in the drug’s 

labeling that has been approved by FDA. We did not separate expenditures on Avastin for cancer and 

for wet AMD. 

Although Epogen to treat beneficiaries 

with ESRD was Medicare’s most expensive Part B drug in 2010, other drugs among 

the top 55 were used by more beneficiaries, including two vaccines (influenza and 

25Hemophilia A is a hereditary bleeding disorder caused by a lack of blood clotting factor viii. Without 

enough factor viii, the blood cannot clot properly to stop bleeding. 
 9 GAO-13-46R Medicare Part B Drug Spending

pneumococcal). Apart from the vaccines, the greatest number of beneficiaries 

(891,000) used Lexiscan, which is a chemical stress agent used to test heart 

function in patients who cannot take a stress test on a treadmill (see table 2).

Table 2: Ten Most Utilized High-Expenditure Medicare Part B Drugs, 2010

Brand name(s) Condition(s) treated

Utilization 

(number of unique 

Medicare beneficiaries)

Influenza Vaccine 

(various)

Prevent influenza 15,229,920

Pnuemovax 23, 

Pnu-Imune

Prevent meningitis and pneumonia 1,692,940

Lexiscan Stress agent for myocardial perfusion imaging 890,920

Venofer Anemia in chronic kidney disease patients 329,260

Epogen/Procrit 

(ESRD use)

Anemia in end-stage renal disease (ESRD) patients 323,920 a

Zemplar Hyperthyroidism in chronic kidney disease patients 230,700

Reclast Osteoporosis prevention and treatment; treat Paget’s disease of bone 218,060

Avastin Cancer; wet age-related macular degeneration (AMD) 171,560

Synvisc/Synvisc-One Osteoarthritis of the knee 168,560

Aloxi Prevent nausea and vomiting in chemotherapy and surgical patients 164,000

Source: GAO analysis of CMS, FDA, NIH, and drug manufacturer data.

a

End-stage renal disease (ESRD) is also known as stage 5 chronic kidney disease.

Average Annual per Beneficiary Costs for 55 Highest-Expenditure Medicare Part B 

Drugs Ranged from over $200,000 to $13 in 2010

We also examined the average annual per beneficiary cost of each drug and found 

that factor viii recombinant, although used by the smallest number of Medicare 

beneficiaries, was the most costly drug on an average annual per beneficiary cost 

basis—the average annual cost was about $217,000 for each beneficiary who used 

it in 2010 (see table 3). The influenza vaccines had the lowest average annual per 

beneficiary cost ($13). The high average annual per beneficiary cost for factor viii 

recombinant drugs results in part from the complexity of the production process; 

consequently, even having several brand names available has not reduced the 

average annual per beneficiary cost for this drug. Remodulin and Ventavis follow 

with average annual per beneficiary costs of about $131,000 and $84,000, 

respectively; both are used to treat pulmonary hypertension (high blood pressure in 

the lungs due to narrowing of the pulmonary arteries). Primacor, at an average 

annual per beneficiary cost of about $63,000, is used to treat acute decompensated 

heart failure (a type of acute heart failure). Apart from these four drugs, no drug cost 

more than $26,000 per beneficiary per year in 2010.
 10 GAO-13-46R Medicare Part B Drug Spending

Table 3: Ten High-Expenditure Medicare Part B Drugs with Highest Average Annual Per Beneficiary Cost, 

2010

Brand name(s) Condition(s) treated Classification

Average annual 

cost per 

beneficiary 

(dollars) 

Factor viii 

recombinant 

(various)

Hemophilia A Biological $216,833

Remodulin Pulmonary arterial hypertension Drug 130,772

Ventavis Pulmonary arterial hypertension Drug 84,205

Primacor, Primacor 

in Dextrose

Acute decompensated heart failure Drug 62,790

Erbitux Cancer Biological 25,898

Dacogen Myelodysplastic syndrome Drug 25,858

Herceptin Cancer Biological 25,797

Vidaza Myelodysplastic syndrome Drug 22,957

Sandostatin 

Lar Depot

Acromegaly, diarrhea, and flushing caused by 

cancerous tumors and vasoactive intestinal 

peptide secreting adenomas

Drug 22,748

Velcade Cancer Drug 19,667

Source: GAO analysis of CMS, FDA, NIH, and drug manufacturer data.

Most Changes in Expenditures, Utilization, and Price from 2008 to 2010 Were 

Increases

Expenditures for drugs generally increased from 2008 to 2010, although some 

decreased. Medicare expenditures for 42 of the 55 most expensive Part B drugs 

increased from 2008 to 2010, while 12 decreased.26 Changes in Medicare 

expenditures from 2008 to 2010 for the 55 highest-expenditure Part B drugs in 2010 

ranged from a 9,550 percent increase to a 40 percent decrease.27 Utilization also 

generally increased from 2008 to 2010. The drugs that showed the greatest 

increases in expenditures were Lexiscan (9,550 percent), Treanda (7,440 percent), 

Privigen (836 percent), Reclast (141 percent), and Myfortic (107 percent); these 

drugs also showed the greatest increases in utilization (see table 4). Enclosure V 

provides information on the 55 highest-expenditure Medicare Part B drugs by 

changes in expenditures, utilization, and price. The first four of these drugs had been 

approved by FDA in 2007 or early 2008, and it took some months for their use to 

spread.28 Also, in late 2008 and 2009 Reclast was approved for additional uses, 

such as for the treatment of osteoporosis in men.

 

26We removed factor viii recombinant from our analysis of change in expenditures from 2008-2010 

because we were not confident that the expenditures for 2008 were valid. 

27Percent change in expenditures is calculated as the difference between 2010 and 2008 

expenditures as a percentage of 2008 expenditures.

28Our analysis excludes expenditures and utilization in 2008 that were reported using a not otherwise 

classified code, which may have artificially increased the changes shown for new drugs, including 

Lexiscan and Treanda.
 11 GAO-13-46R Medicare Part B Drug Spending

Most price changes from 2008 to 2010 were also increases but the range was 

smaller—from an increase in price of 51 percent to a decrease of 38 percent.29 Four 

of the 10 that increased most in expenditures also were among the 10 that increased 

most in price. Ventavis increased the most (51 percent) followed by Pneumovax 23/

Pnu-Immune (36 percent), the vaccine used to prevent pneumonia.

Table 4: Ten High-Expenditure Part B Drugs with Largest Changes in Expenditures, Utilization, and 

Average Price from 2008 to 2010

Change in expenditures, 

2008-2010a Change in utilization, 2008-2010

Change in average price, 

2008-2010

Brand name(s)

b

Percent

change

Brand name(s) Percent 

change

Brand name(s) Percent 

change 

Lexiscan 9,550.4% Lexiscan 11,008.7% Ventavis 51.5%

Treanda 7,440.2 Treanda 3,271.4 Pneumovax 23, 

Pnu-Imune

36.0

Privigen 836.3 Privigen 381.1 Myfortic 22.0

Reclast 140.7 Reclast 136.8 Hycamtin 17.5

Myfortic 106.9 Myfortic 73.4 Gammagard Liquid 15.4

Primacor, Primacor 

in Dextrose

94.0 Hectorol 71.1 Doxil 14.1

Ventavis 93.6 Flebogamma, 

Flebogamma DIF

46.7 Tysabri 12.3

Vidaza 81.9 Orencia 45.4 Vidaza 11.6

Gammagard 

Liquid

69.2 Vidaza 41.7 Gamunex 11.3

Orencia 66.9 Gamunex 36.7 Xolair 11.2

Source: GAO analysis of CMS and FDA data.

Notes: Our analysis excludes expenditures and utilization in 2008 that were reported using a not otherwise classified code, 

which may have artificially increased the changes shown for new drugs, including Lexiscan and Treanda.

a

We removed factor viii recombinant biologicals from our analysis of change in expenditures from 2008-2010 because 

Medicare claims expenditures for 2008 were lower than values in CMS’s Part B National Summary Files and we were not 

confident that the reported expenditures for 2008 were valid.

b

The change in price analysis was based on the unweighted average ASP across four quarters in each year, and does not 

include prices for drugs when supplied through infusion equipment.

Medicare Beneficiaries Accounted for the Majority of Total U.S. Spending for 

Most of the Highest-Expenditure Medicare Part B-Covered Drugs in 2010

Spending on Medicare beneficiaries accounted for the majority of estimated total 

U.S. spending for 35 of the 55 highest-expenditure Part B drugs in 2010. For 17 of 

these drugs, Medicare spending accounted for more than two-thirds of total U.S. 

spending (see table 5). Of the $16.9 billion Medicare spent for the 55 highestexpenditure Part B drugs, $11.0 billion, or 65 percent, was spent on drugs for which 

spending for Medicare beneficiaries accounted for the majority of total U.S. 

expenditures. Enclosure VI provides information on the percentage spent on 

Medicare beneficiaries for the 55 highest-expenditure Part B drugs.

 

29Percent change in average price is calculated as the difference between 2010 and 2008 average 

prices as a percentage of the 2008 average price.
 12 GAO-13-46R Medicare Part B Drug Spending

Table 5: High-Expenditure Medicare Part B Drugs for Which Spending on Medicare Beneficiaries 

Exceeded Two-thirds of Total U.S. Spending, 2010

2010 rank 

by total 

Medicare 

expenditures Brand name(s) Condition(s) treated

Spending on 

Medicare 

beneficiaries

(dollars in 

millions)

Spending on 

total U.S. 

insured 

population

(dollars in 

millions)

Percentage 

spent on 

Medicare 

beneficiaries 

(percent) 

47 Myfortic Prevent transplant 

kidney rejection; treat 

Crohn’s disease

$80 $86 92.2%

18 Prograf Prevent transplant 

organ rejection; treat 

fistulizing Crohn’s 

disease

267 290 92.1

52 Brovana Symptoms of chronic 

obstructive pulmonary 

disease

70 77 91.3

22 Pulmicort Prevent wheezing, shortness 

of breath, and troubled 

breathing in asthma and 

lung disease patients

245 273 89.6

33 Aranesp (ESRD use) Anemia in end-stage 

renal disease (ESRD) 

patients

162

a

182 88.7

45 Primacor, Primacor 

in Dextrose

Acute decompensated 

heart failure

87 101 85.6

40 Cellcept Prevent transplant 

organ rejection; treat 

Crohn’s disease

113 133 84.9

1 Epogen/Procrit

(ESRD use)

Anemia in ESRD patients 2,000 2,381 84.0

14 Zemplar Hyperthyroidism in 

chronic kidney disease 

patients

324 389 83.3

3 Lucentis Wet age-related macular 

degeneration (AMD)

1,180 1,486 79.5

44 Dacogen Myelodysplastic 

syndrome

100 130 77.1

28 Vidaza Myelodysplastic syndrome 187 245 76.3

48 Ventavis Pulmonary arterial 

hypertension

79 104 76.1

19 Venofer Anemia in chronic 

kidney disease patients

257 350 73.5

8 Epogen/Procrit (nonESRD use)Anemia in 

chemotherapy and HIV 

patients; prevent blood

loss in surgical patients

443 609 72.7

42 Hectorol Hyperthyroidism in 

chronic kidney disease 

patients

105 150 69.8

7 Aranesp 

(non-ESRD use)

Anemia in 

chemotherapy patients

504 755 66.7

Source: GAO analysis of CMS, FDA, NIH, drug manufacturer, and IMS Health data.

a

End-stage renal disease (ESRD) is also known as stage 5 chronic kidney disease.
 13 GAO-13-46R Medicare Part B Drug Spending

Treatment of cancer and its side effects, autoimmune disorders and 

immunodeficiency, and chronic kidney disease were the most common uses of 

the 35 drugs for which Medicare spending was the majority of U.S. spending. 

Twenty-nine percent of these 35 drugs were biologicals, compared to 42 percent 

of all 55 drugs.

Agency Comments

CMS 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 to the CMS Administrator and other interested congressional 

committees. In addition, the report will be available at no charge on the GAO website 

at http://www.gao.gov. 

If you or your staff have any questions regarding this report, please contact me at 

(202) 512-7114 or cosgrovej@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page of this 

report. Individuals making key contributions to this report include Phyllis Thorburn, 

Assistant Director; Zhi Boon; Linda Galib; and Andrew Johnson.

James C. Cosgrove

Director, Health Care
Enclosure I

14 GAO-13-46R Medicare Part B Drug Spending

General Information on the 55 Highest-Expenditure 

Medicare Part B Drugs, 2010

Brand name(s) Drug description

Healthcare 

Common 

Procedure 

Classification 

System 

(HCPCS) code(s) Classification a Condition(s) treated

Abraxane Paclitaxel protein 

bound

J9264 Drug Cancer

Alimta Pemetrexed injection J9305 Drug Cancer

Aloxi Palonosetron HCl J2469 Drug Prevent nausea and 

vomiting in chemotherapy 

and surgical patients

Aranesp 

(non-ESRD use)

Darbepoetin alfa, 

non-ESRD b J0881 Biological Anemia in chemotherapy 

patients

Aranesp 

(ESRD use)

Darbepoetin alfa, 

ESRD 

J0882 Biological Anemia in end-stage renal 

disease (ESRD) patients

Avastin Bevacizumab 

injection

C9257, J9035, 

Q2024

Biological Cancer; wet age-related 

macular degeneration 

(AMD) 

Botox OnabotulinumtoxinA 

injection

J0585 Biological Various conditions

Brovana Arformoterol 

non-comp unit

J7605 Drug Symptoms of chronic 

obstructive pulmonary 

disease

Cellcept Mycophenolate 

mofetil oral

J7517 Drug Prevent transplant organ 

rejection; treat Crohn’s 

disease

Dacogen Decitabine injection J0894 Drug Myelodysplastic syndrome

Doxil Doxorubicin HCl 

liposome injection

J9001 Drug Cancer

Eligard, Lupron 

Depot, Lupron 

Depot-PED 

Leuprolide acetate 

suspension

J9217 Drug Prostate cancer; various 

other conditions

Eloxatin Oxaliplatin J9263 Drug Cancer

Epogen/Procrit 

(ESRD use)

Epoetin alfa, ESRD Q4081 Biological Anemia in ESRD patients

Epogen/Procrit 

(non-ESRD use)

Epoetin alfa, 

non-ESRD 

J0885 Biological Anemia in chemotherapy 

and HIV patients; prevent 

blood loss in surgical 

patients

Erbitux Cetuximab injection J9055 Biological Cancer

Faslodex Fulvestrant injection J9395 Drug Cancer

Flebogamma, 

Flebogamma DIF

Immune Globulin 

Intravenous 

(Human)

J1572 Biological Primary immunodeficiency

Gammagard 

Liquid

Immune Globulin 

Intravenous 

(Human)

J1569 Biological Primary humoral 

immunodeficiency; 

multifocal motor neuropathy
Enclosure I

 15 GAO-13-46R Medicare Part B Drug Spending

Brand name(s) Drug description

Healthcare 

Common 

Procedure 

Classification 

System 

(HCPCS) code(s) Classification a Condition(s) treated

Gamunex Immune Globulin 

Intravenous 

(Human)

J1561 Biological Primary humoral 

immunodeficiency; chronic 

inflammatory demyelinating 

polyneuropathy; idiopathic 

thrombocytopenic purpura

Gemzar Gemcitabine HCl 

injection

J9201 Drug Cancer

Hectorol Doxercalciferol 

injection

J1270 Drug Hyperthyroidism in chronic 

kidney disease patients

Herceptin Trastuzumab 

injection

J9355 Biological Cancer

Hyalgan, Supartz Solution of sodium 

hyaluronate

J7321 Drug Osteoarthritis of the knee

Hycamtin Topotecan injection J9350, J9351 Drug Cancer

Lexiscan Regadenoson 

injection

C9244, J2785 Drug Stress agent for myocardial 

perfusion imaging

Lucentis Ranibizumab 

injection

J2778 Biological Wet AMD

Myfortic Mycophenolic acid J7518 Drug Prevent transplant kidney 

rejection; treat Crohn’s 

disease

Neulasta Injection, 

pegfilgrastim 6mg

J2505 Biological Prevent infection in 

chemotherapy patients

Neupogen Filgrastim injection, 

300 and 480 mcg

J1440, J1441 Biological Prevent infection in cancer, 

bone marrow transplant, 

chronic neutropenia, and 

HIV patients; prepare blood 

for leukapheresis in 

chemotherapy patients

Orencia Abatacept injection J0129 Biological Rheumatoid arthritis

Pneumovax 23, 

Pnu-Imune

Pneumococcal 

vaccine

90732 Biological Prevent meningitis and 

pneumonia

Primacor, 

Primacor in 

Dextrose

Milrinone lactate 

5 mg injection

J2260 Drug Acute decompensated 

heart failure

Privigen Immune Globulin 

Intravenous 

(Human)

J1459, Q4097 Biological Primary humoral 

immunodeficiency; chronic 

immune thrombocytopenic 

purpura

Prograf Tacrolimus oral per 

1 MG

J7507 Drug Prevent organ transplant 

rejection; treat fistulizing 

Crohn’s disease

Pulmicort Budesonide noncomp unitJ7626 Drug Prevent wheezing, 

shortness of breath, and 

troubled breathing in 

asthma and lung disease 

patients

Reclast Zoledronic acid J3488 Drug Osteoporosis prevention 

and treatment; treat Paget’s 

disease of bone
Enclosure I

 16 GAO-13-46R Medicare Part B Drug Spending

Brand name(s) Drug description

Healthcare 

Common 

Procedure 

Classification 

System 

(HCPCS) code(s) Classification a Condition(s) treated

Remicade Infliximab injection J1745 Biological Various autoimmune 

disorders

Remodulin Treprostinil injection J3285 Drug Pulmonary arterial 

hypertension

Rituxan Rituximab injection J9310 Biological Cancer; rheumatoid arthritis

Sandostatin 

Lar Depot

Octreotide injection, 

depot

J2353 Drug Acromegaly; diarrhea and 

flushing caused by 

carcinoid tumors and 

vasoactive intestinal 

peptide secreting 

adenomas

Synvisc, 

Synvisc-One

Hylan GF 20 J7322, J7325 Drug Osteoarthritis of the knee

Taxotere Docetaxel injection J9170, J9171 Drug Cancer

Treanda Bendamustine HCl 

injection

C9243, J9033 Drug Cancer

Tysabri Natalizumab 

injection

J2323 Biological Multiple sclerosis; Crohn’s 

disease

Various brand 

names

Influenza vaccine 90655, 90656, 

90657, 90658, 

90662, Q2035, 

Q2036, Q2037, 

Q2038

Biological Prevent influenza

Various brand 

names

Factor viii 

recombinant

J7192 Biological Hemophilia A

Various brand 

names

Immune globulin, 

powder

J1566 Biological Primary defective antibody 

synthesis; primary 

immunodeficiency 

diseases; B-cell chronic 

lymphocytic leukemia; 

idiopathic 

thrombocytopenic purpura; 

Kawasaki syndrome

Velcade Bortezomib injection J9041 Drug Cancer

Venofer Iron sucrose 

injection

J1756 Drug Iron deficiency anemia in 

chronic kidney disease 

patients

Ventavis Iloprost non-comp 

unit dose

Q4074, Q4080 Drug Pulmonary arterial 

hypertension

Vidaza Azacitidine injection J9025 Drug Myelodysplastic syndrome

Xolair Omalizumab 

injection

J2357 Drug Asthma

Zemplar Paricalcitol J2501 Drug Hyperparathyroidism in 

chronic kidney disease 

patients

Zometa Zoledronic acid J3487 Drug High calcium levels and 

bone disease in cancer 

patients

Source: GAO analysis of CMS, FDA, NIH, and drug manufacturer data.
Enclosure I

 17 GAO-13-46R Medicare Part B Drug Spending

a

Healthcare Common Procedure Coding System (HCPCS) is a standard coding system developed to ensure that health care 

claims are processed in an orderly and consistent manner by Medicare and other health insurance programs.

b

End-stage renal disease (ESRD) is also known as stage 5 chronic kidney disease.
Enclosure II

18 GAO-13-46R Medicare Part B Drug Spending

Fifty-Five Highest-Expenditure Medicare B Drugs Ranked by Total 

Expenditures, Utilization, and Average Annual Per Beneficiary Cost, 2010

Total expenditures, 

2010

Beneficiary utilization, 

2010

Per beneficiary cost, 

2010

Brand 

name(s)

Total

(dollars in 

millions)

Rank by total 

Medicare 

expenditures

Number of

unique 

beneficiaries

Rank by 

beneficiary 

utilization

Average 

annual cost 

per 

beneficiary 

(dollars) 

Rank by 

annual cost 

per 

beneficiary

Epogen/Procrit 

(ESRD use) $2,000 a 1 323,920 5 $6,175 32

Rituxan 1,302 2 67,520 21 19,281 11

Lucentis 1,180 3 115,760 17 10,196 27

Avastin 1,130 4 171,560 8 6,585 31

Remicade 900 5 59,640 23 15,084 20

Neulasta 888 6 98,460 18 9,015 28

Aranesp 

(non-ESRD use) 504 7 137,980 14 3,651 38

Epogen/Procrit 

(non-ESRD use) 443 8 154,720 12 2,862 40

Alimta 394 9 20,740 31 18,990 13

Taxotere 387 10 44,560 28 8,690 29

Herceptin 375 11 14,540 35 25,797 7 

Zometa 350 12 90,260 19 3,881 37

Gemzar 349 13 44,660 27 7,820 30

Zemplar 324 14 230,700 6 1,406 46

Velcade 297 15 15,120 34 19,667 10

Eloxatin 290 16 27,260 30 10,649 26

Erbitux 275 17 10,620 38 25,898 5 

Prograf 267 18 61,280 22 4,351 35

Venofer 257 19 329,260 4 782 50

Eligard, Lupron 

Depot, Lupron 

Depot-PED 256 20 159,700 11 1,600 44

Reclast 245 21 218,060 7 1,122 48

Pulmicort 245 22 142,440 13 1,717 43

Orencia 240 23 20,040 32 11,953 24

Sandostatin 

Lar Depot 210 24 9,220 40 22,748 9 

Influenza 

Vaccine 

(various) 193 25 15,229,920 1 13 55

Gammagard

Liquid 191 26 10,880 37 17,543 15

Aloxi 190 27 164,000 10 1,161 47

Vidaza 187 28 8,160 43 22,957 8
Enclosure II

 19 GAO-13-46R Medicare Part B Drug Spending

Total expenditures, 

2010

Beneficiary utilization, 

2010

Per beneficiary cost, 

2010

Brand 

name(s)

Total

(dollars in 

millions)

Rank by total 

Medicare 

expenditures

Number of

unique 

beneficiaries

Rank by 

beneficiary 

utilization

Average 

annual cost 

per 

beneficiary 

(dollars) 

Rank by 

annual cost 

per 

beneficiary

Lexiscan 181 29 890,920 3 204 53

Treanda 181 30 9,440 39 19,218 12

Neupogen 171 31 53,020 24 3,232 39

Remodulin 170 32 1,300 53 130,772 2 

Aranesp 

(ESRD use) 162 33 31,800 29 5,086 34

Factor viii 

recombinant (various) 143 34 660 55 216,833 1 

Gamunex 142 35 8,420 42 16,862 17

Tysabri 139 36 7,340 46 18,978 14

Botox 136 37 67,860 20 2,008 42

Abraxane 128 38 7,520 44 16,989 16

Synvisc, 

Synvisc-One 126 39 168,560 9 746 51

Cellcept 113 40 48,740 25 2,322 41

Xolair 110 41 7,420 45 14,774 21

Hectorol 105 42 127,440 16 820 49

Doxil 103 43 9,160 41 11,195 25

Dacogen 100 44 3,860 51 25,858 6 

Primacor, Primacor

in Dextrose 87 45 1,380 52 62,790 4 

Immune globulin, 

powder (various) 80 46 6,120 47 13,139 22

Myfortic 80 47 19,280 33 4,131 36

Ventavis 79 48 940 54 84,205 3 

Privigen 78 49 5,100 49 15,335 19

Hycamtin 75 50 5,840 48 12,768 23

Pnuemovax-23, 

Pnu-Imune 73 51 1,692,940 2 43 54

Brovana 70 52 45,920 26 1,528 45

Faslodex 70 53 11,700 36 5,959 33

Hyalgan, 

Supartz 69 54 132,620 15 520 52

Flebogamma, 

Flebogamma DIF 63 55 4,020 50 15,684 18

Source: GAO analysis of CMS and FDA data.

a

End-stage renal disease (ESRD) is also known as stage 5 chronic kidney disease.
Enclosure III

20 GAO-13-46R Medicare Part B Drug Spending

High-Expenditure Medicare Part B Drugs with Orphan 

Marketing Exclusivity during 2008 to 2010

2010 rank by 

total 

Medicare 

expenditures

Brand 

name(s) 

of orphan 

drug

Orphan 

exclusivity in 

2008-2010

Orphan exclusivity start date(s) 

and indication(s), 2008-present

Year(s) of 

orphan 

exclusivity 

expiration

2 Rituxan Yes 02-18-2010 Treatment of patients previously 

untreated for CD20-positive chronic lymphocytic 

leukemia in combination with fludarbine and 

cyclophosphamide

04-19-2011 For the use of Rituxan (rituximab) in 

combination with glucocorticoids for the treatment 

of patients with Wegener’s Granulomatosis and 

Microscopic Polyangiitis 

2017, 2018

4 Avastin Yes 05-05-2009 Treatment of glioblastoma with 

progressive disease following prior therapy

07-31-2009 Treatment of renal cell carcinoma in 

combination with interferon alfa

2016

5 Remicade Yes 05-19-2006 For reducing signs and symptoms and 

inducing and maintaining clinical remission in 

pediatric patients with moderately to severely 

active Crohn’s disease who have had an 

inadequate response to conventional therapy;

09-23-2011 For reducing signs and symptoms and 

inducing and maintaining clinical remission in 

pediatric patients 6 years of age and older with 

moderately to severely active ulcerative colitis 

who have had an inadequate response to 

conventional therapy

2013, 2018

9 Alimta Yes 02-04-2004 Treatment of patients with malignant 

pleural mesothelioma whose disease is either 

unresectable or who are otherwise not candidates 

for curative surgery

2011

11 Herceptin Yes 10-20-2010 Treatment of patients with humana 

epidermal growth factor receptor 2 overexpressing 

metastatic gastric or gastroesophageal junction 

adenocarcinoma, who have not received prior 

treatment for metastatic disease

2017

12 Zometa Yes 08-20-2001 Treatment of hypercalcemia of 

malignancy

2008

15 Velcade Yes 05-13-2003 Treatment of multiple myeloma 

patients who have received at least two prior 

therapies and have demonstrated disease 

progression on the last therapy

12-08-2006 Treatment of patients with mantile cell 

lymphoma who have received at least one prior 

therapy. 

2010, 2013

17 Erbitux Yes 03-01-2006 For use in combination with radiation 

therapy, for the treatment of locally or regionally 

advanced squamous cell carcinoma of the head 

and neck (SCCHN) and for use as a single agent 

for the treatment of patients with recurrent or 

metastatic SCCHN for whom prior platinum-based 

therapy has failed

2013
Enclosure III

 21 GAO-13-46R Medicare Part B Drug Spending

2010 rank by 

total 

Medicare 

expenditures

Brand 

name(s) 

of orphan 

drug

Orphan 

exclusivity in 

2008-2010

Orphan exclusivity start date(s) 

and indication(s), 2008-present

Year(s) of 

orphan 

exclusivity 

expiration

18 Prograf Yes 03-29-2006 Prophylaxis of organ rejection in 

patients receiving allogenic heart transplants

2013

28 Vidaza Yes 05-19-2004 Treatment of patients with the 

following myelodysplastic syndrome subtypes: 

refractory anemia or refractory anemia with ringed 

sideroblasts (if accompanied by neutropenia or 

thrombocytopenia and requiring transfusions), 

refractory anemia with excess blasts, refractory 

anemia with excess blasts in transformation, and 

chronic myelomonocytic leukemia 

2011

30 Treanda Yes 03-20-2008 Treatment of patients with chronic 

lymphocytic leukemia

2015

32 Remodulin Yes 05-21-2002 Treatment of pulmonary arterial 

hypertension

2009

35 Gamunex Yes 09-12-2008 Treatment of chronic inflammatory 

demyelinating polyneuropathy to improve 

neuromuscular disability and impairment and for 

maintenance therapy to prevent relapse 

2015

43 Doxil Yes 05-17-2007 For use in combination with 

bortezomib for the treatment of patients with 

multiple myeloma who have not previously 

received bortezomib and have at least one prior 

therapy 

2014

44 Dacogen Yes 05-02-2006 for treatment of patients with 

myelodysplastic syndromes (MDS) including 

previously treated and untreated, de novo and 

secondary MDS of all French-American-British 

subtypes (refractory anemia, refractory anemia 

with ringed sideroblasts, refractory anemia with 

excess blasts, refractory anemia with excess 

blasts in transformation, and chronic 

myelomonocytic leukemia) and intermediate-1, 

intermediate-2, and high-risk International 

Prognostic Scoring System groups 

2013

48 Ventavis Yes 12-29-2004 Treatment of pulmonary arterial 

hypertension in patients with symptoms of 

moderate or severe heart failure 

2011

Source: GAO analysis of CMS and FDA data.

Note: Upon approval by FDA for specific orphan indications, orphan drugs receive marketing exclusivity for a period of 7 years. 

Other drugs in our analysis have been designated as orphan drugs by FDA, but did not have orphan marketing exclusivity at 

any point during 2008 to 2010. In addition to the drugs listed above, one drug in our analysis, Gammagard Liquid, has an 

orphan exclusivity start date of June 22, 2012, for an indication of maintenance therapy to improve muscle strength and 

disability in adult patients with multifocal motor neuropathy.
Enclosure IV

22 GAO-13-46R Medicare Part B Drug Spending

Nine of the 55 Highest-Expenditure Medicare Part B 

Drugs with Generic Products Approved

2010 rank by 

total Medicare 

expenditures Brand name(s)

Generic version 

approved by FDA

Date of first 

generic approval

10 Taxotere Yes 3/8/2011

13

a

Gemzar Yes 11/15/2010

14 Zemplar Yes 7/27/2011

16

a

Eloxatin Yes 8/7/2009

18 Prograf Yes 8/10/2009

22 Pulmicort Yes 11/18/2008

40 Cellcept Yes 7/29/2008

45 Primacor, Primacor in Dextrose Yes (however, some versions of this 

drug are listed as discontinued)

5/28/2002

50 Hycamtin Yes 11/29/2010

Source: GAO analysis of CMS and FDA data.

Notes: The date of first generic approval does not necessarily indicate the date on which a generic version was available on 

the market.

a

A generic version was approved after 2010, the most recent year of our analysis.
Enclosure V

23 GAO-13-46R Medicare Part B Drug Spending

Fifty-Five Highest-Expenditure Medicare Part B Drugs Ranked Highest to 

Lowest by Change in Expenditures, Change in Number of Beneficiaries, 

and Change in Average Price, 2008 to 2010

Change in expenditures, 

2008-2010

Change in beneficiaries, 

2008-2010

Change in average price, 

2008-2010

Brand name(s)

a

Percent 

change Brand name(s)

Percent 

change Brand name(s)

Percent

change 

Lexiscan 9,550.4% Lexiscan 11,008.7% Ventavis 51.5%

Treanda 7,440.2 Treanda 3,271.4 Pneumovax 23, 

Pnu-Imune

36.0

Privigen 836.3 Privigen 381.1 Myfortic 22.0

Reclast 140.7 Reclast 136.8 Hycamtin 17.5

Myfortic 106.9 Myfortic 73.4 Gammagard Liquid 15.4

Primacor, Primacor 

in Dextrose

94.0 Hectorol 71.1 Doxil 14.1

Ventavis 93.6 Flebogamma, 

Flebogamma DIF

46.7 Tysabri 12.3

Vidaza 81.9 Orencia 45.4 Vidaza 11.6

Gammagard Liquid 69.2 Vidaza 41.7 Gamunex 11.3

Orencia 66.9 Gamunex 36.7 Xolair 11.2

Gamunex 66.5 Velcade 35.5 Velcade 11.1

Flebogamma, 

Flebogamma DIF

62.3 Tysabri 34.9 Neulasta 11.1

Velcade 56.9 Gammagard Liquid 32.0 Rituxan 11.0

Lucentis 56.6 Alimta 30.3 Hectorol 10.6

Xolair 55.8 Lucentis 29.6 Herceptin 10.5

Tysabri 50.5 Brovana 28.8 Gemzar 10.0

Alimta 49.7 Synvisc, Synvisc-One 27.8 Dacogen 9.7

Brovana 48.0 Primacor, Primacor 

in Dextrose

27.8 Alimta 9.5

Hectorol 47.1 Venofer 27.0 Taxotere 9.2 b

Remodulin 40.7 Sandostatin Lar Depot 22.9 Aloxi 8.6

Synvisc, Synvisc-One 36.0 Remodulin 22.6 Flebogamma, 

Flebogamma DIF

7.7

Venofer 33.4 Xolair 20.5 Sandostatin Lar Depot 7.1

Sandostatin Lar Depot 29.2 Prograf 19.5 Immune globulin, 

powder (various)

6.9

Faslodex 27.7 Abraxane 16.8 Abraxane 6.4

Pneumovax 23, 

Pnu-Imune

26.1 Avastin 14.0 Orencia 6.3

Dacogen 24.6 Zemplar 8.6 Remicade 6.3

Eligard, Lupron Depot, 

Lupron Depot-PED 

24.3 Aloxi 7.2 Brovana 6.0

Herceptin 22.1 Botox 6.7 Epogen/Procrit 

(non-ESRD use)

5.9 c
Enclosure V

 24 GAO-13-46R Medicare Part B Drug Spending

Change in expenditures,

2008-2010

Change in beneficiaries,

2008-2010

Change in average price,

2008-2010

Brand name(s)

a

Percent 

change Brand name(s)

Percent 

change Brand name(s)

Percent

change 

Botox 20.8 Epogen/Procrit 

(ESRD use)

6.0 Epogen/Procrit 

(ESRD use)

5.8

Abraxane 20.4 Influenza Vaccine 

(various)

5.6 Pulmicort 5.5

Aloxi 18.7 Herceptin 4.3 Zometa 4.7

Doxil 16.9 Zometa 4.3 Privigen 3.8

Avastin 15.5 Cellcept 2.8 Botox 3.4

Epogen/Procrit 

(ESRD use)

11.6 Rituxan 2.8 Lexiscan 2.8 d

Rituxan 8.7 Eloxatin 0.5 Reclast 2.6

Remicade 8.6 Aranesp (ESRD use) 0.0 Venofer 2.4

Gemzar 8.5 Eligard, Lupron Depot, 

Lupron Depot-PED 

-0.5 Factor viii recombinant 

(various)

2.1

Neulasta 6.5 Gemzar -0.8 Faslodex 1.6

Zometa 6.0 Faslodex -1.5 Aranesp 

(non-ESRD use)

1.1

Hycamtin 5.1 Remicade -2.3 Aranesp (ESRD use) 1.1

Neupogen 3.8 Doxil -2.3 Remodulin 1.0

Prograf 0.3 Dacogen -3.0 Avastin 1.0 e

Influenza Vaccine 

(various)

-0.6 Taxotere -4.1 Erbitux -0.1

Erbitux -2.7 Neulasta -4.9 Lucentis -0.1

Taxotere -4.2 Pneumovax 23, 

Pnu-Imune

-5.5 Treanda -0.4 d

Epogen/Procrit 

(non-ESRD use)

-6.4 Neupogen -5.5 Eligard, Lupron Depot, 

Lupron Depot-PED 

-0.5

Aranesp 

(ESRD use)

-9.1 Ventavis -7.8 Zemplar -7.4

Zemplar -16.2 Pulmicort -9.3 Hyalgan, Supartz -9.0

Pulmicort -16.5 Hycamtin -12.0 Prograf -13.4

Hyalgan, Supartz -17.4 Hyalgan, Supartz -12.8 Primacor, Primacor 

in Dextrose

-17.6

Aranesp 

(non-ESRD use)

-27.8 Erbitux -14.4 Cellcept -38.1

Immune globulin, 

powder (various)

-28.1 Epogen/Procrit, 

(non-ESRD use)

-17.4 Eloxatin -38.2

Eloxatin -39.5 Immune globulin, 

powder (various)

-32.5 Influenza Vaccine 

(various)

N/A f

Cellcept -40.3 Aranesp 

(non-ESRD use)

-33.6 Neupogen N/A f

Factor viii recombinant 

(various)

N/A g Factor viii recombinant 

(various)

N/A g Synvisc, Synvisc-One N/A f

Source: GAO analysis of CMS and FDA data.

Notes: Our analysis excludes expenditures and utilization in 2008 that were reported using a not otherwise classified code, 

which may have had an impact on our analysis of new drugs, including Lexiscan and Treanda.

a

The change in price analysis was based on the unweighted average ASP across four quarters in each year, and does not 

include prices for drugs when supplied through infusion equipment.
Enclosure V

 25 GAO-13-46R Medicare Part B Drug Spending

b

Our analysis of the change in average price for Taxotere includes an adjustment for a change in dosage between 2008 and 

2010.

c

End-stage renal disease (ESRD) is also known as stage 5 chronic kidney disease.

d

Our analysis of changes in price for Lexiscan and Treanda only includes changes from 2009-2010 as 2008 ASP information 

was not available.

e

Our analysis of Avastin only includes changes in price for Healthcare Common Procedure Classification System (HCPCS) 

code J9035 due to dosage differences for other codes used to identify Avastin. Code J9035 accounted for the vast majority of 

Avastin expenditures in 2010.

f

Change in average price could not be analyzed for the influenza vaccine, Neupogen, or Synvisc/Synvisc-One because the 

multiple HCPCS codes that are associated with these drugs have different units or dosage amounts.

g

We removed factor viii recombinant from our analysis of change in expenditures from 2008-2010 because we were not 

confident that the expenditures for 2008 were valid.
Enclosure VI

26 GAO-13-46R Medicare Part B Drug Spending

Fifty-Five Highest-Expenditure Medicare Part B Drugs by Percentage 

Spent on Medicare Beneficiaries, 2010

Brand name(s)

Condition(s) 

treated

Spending on 

Medicare 

beneficiaries

(dollars in 

millions)

Spending on 

total U.S. insured 

population

(dollars in 

millions)

Percentage 

spent on 

Medicare 

beneficiaries 

(percent) 

2010 rank

by total 

Medicare 

expenditures

Myfortic Prevent transplant 

kidney rejection; 

treat Crohn’s 

disease

$80 $86 92.2% 47

Prograf Prevent transplant 

organ rejection; treat 

fistulizing Crohn’s 

disease

267 290 92.1 18

Brovana Symptoms of 

chronic obstructive 

pulmonary disease

70 77 91.3 52

Pulmicort Prevent wheezing, 

shortness of breath, 

and troubled 

breathing in asthma 

and lung disease 

patients

245 273 89.6 22

Aranesp 

(ESRD use)

Anemia in end-stage 

renal disease 

(ESRD) patients

162

a

182 88.7 33

Primacor, 

Primacor in 

Dextrose

Acute 

decompensated 

heart failure

87 101 85.6 45

Cellcept Prevent transplant 

organ rejection; treat 

Crohn’s disease

113 133 84.9 40

Epogen/Procrit

(ESRD use)

Anemia in ESRD 

patients

2,000 2,381 84.0 1 

Zemplar Hyperparathyroidism 

in chronic kidney 

disease patients

324 389 83.3 14

Lucentis Wet age-related 

macular 

degeneration (AMD)

1,180 1,486 79.5 3 

Dacogen Myelodysplastic 

syndrome

100 130 77.1 44

Vidaza Myelodysplastic 

syndrome

187 245 76.3 28

Ventavis Pulmonary arterial 

hypertension

79 104 76.1 48
Enclosure VI

 27 GAO-13-46R Medicare Part B Drug Spending

Brand name(s)

Condition(s) 

treated

Spending on 

Medicare 

beneficiaries

(dollars in 

millions)

Spending on 

total U.S. insured 

population

(dollars in 

millions)

Percentage 

spent on 

Medicare 

beneficiaries 

(percent) 

2010 rank

by total 

Medicare 

expenditures

Venofer Iron deficiency 

anemia in chronic 

kidney disease 

patients

257 350 73.5 19

Epogen/Procrit

(non-ESRD use)

Anemia in 

chemotherapy and 

HIV patients; prevent 

blood loss in surgical 

patients

443 609 72.7 8 

Hectorol Hyperthyroidism in 

chronic kidney disease 

patients

105 150 69.8 42

Aranesp 

(non-ESRD use)

Anemia in chemotherapy 

patients

504 755 66.7 7 

Eligard, Lupron 

Depot, Lupron 

Depot-PED 

Prostate cancer; various 

other conditions

256 410 62.4 20

Lexiscan Stress agent for 

myocardial perfusion 

imaging

181 299 60.7 29

Reclast Osteoporosis prevention 

and treatment; treat 

Paget’s disease of bone

245 408 60.0 21

Faslodex Cancer 70 117 59.6 53

Alimta Cancer 394 673 58.5 9 

Treanda Cancer 181 313 58.0 30

Velcade Cancer 297 527 56.5 15

Zometa High calcium levels and 

bone disease in cancer 

patients

350 630 55.6 12

Erbitux Cancer 275 495 55.5 17

Gemzar Cancer 349 629 55.5 13

Neupogen Prevent infection in 

cancer, bone marrow 

transplant, chronic 

neutropenia, and HIV 

patients; prepare blood 

for leukapheresis in 

chemotherapy patients

171 309 55.5 31

Hycamtin Cancer 75 134 55.5 50

Remodulin Pulmonary arterial 

hypertension

170 308 55.1 32

Doxil Cancer 103 188 54.4 43

Pneumovax 23, 

Pnu-Imune

Prevent meningitis 

and pneumonia

73 135 54.2 51

Rituxan Cancer; rheumatoid 

arthritis 

1,302 2,490 52.3 2 
Enclosure VI

 28 GAO-13-46R Medicare Part B Drug Spending

Brand name(s)

Condition(s) 

treated

Spending on 

Medicare 

beneficiaries

(dollars in 

millions)

Spending on 

total U.S. insured 

population

(dollars in 

millions)

Percentage 

spent on 

Medicare 

beneficiaries 

(percent) 

2010 rank

by total 

Medicare 

expenditures

Sandostatin 

Lar Depot

Acromegaly; diarrhea 

and flushing caused by 

carcinoid tumors and 

vasoactive intestinal 

peptide secreting 

adenomas

210 403 52.1 24

Flebogamma, 

Flebogamma DIF

Primary 

immunodeficiency

63 124 50.7 55

Avastin Cancer; wet AMD 1,130 2,527 44.7 4 

Abraxane Cancer 128 289 44.2 38

Hyalgan, Supartz Osteoarthritis of the 

knee

69 159 43.4 54

Orencia Rheumatoid arthritis 240 564 42.4 23

Synvisc, 

Synvisc-One

Osteoarthritis of the knee 126 314 40.0 39

Neulasta Prevent infection in 

chemotherapy patients

888 2,254 39.4 6 

Taxotere Cancer 387 1,041 37.2 10

Privigen Primary humoral 

immunodeficiency; chronic 

immune thrombocytopenic 

purpura

78 224 34.9 49

Aloxi Prevent nausea and vomiting 

in chemotherapy and surgical 

patients

190 553 34.4 27

Immune globulin, 

powder (various)

Primary defective antibody 

synthesis; primary 

immunodeficiency diseases; 

B-cell chronic lymphocytic 

leukemia; idiopathic 

thrombocytopenic purpura; 

Kawasaki syndrome

80 234 34.4 46

Eloxatin Cancer 290 868 33.4 16

Influenza Vaccine 

(various)

Prevent influenza 193 603 32.0 25

Botox Various conditions 136 429 31.8 37

Herceptin Cancer 375 1,257 29.8 11

Gamunex Primary humoral 

immunodeficiency; chronic 

inflammatory demyelinating 

polyneuropathy; idiopathic 

thrombocytopenic purpura

142 481 29.5 35

Xolair Asthma 110 374 29.3 41

Remicade Various autoimmune 

disorders

900 3,229 27.9 5 

Factor viii 

recombinant 

(various)

Hemophilia A 143 526 27.2 34
Enclosure VI

 29 GAO-13-46R Medicare Part B Drug Spending

Brand name(s)

Condition(s) 

treated

Spending on 

Medicare 

beneficiaries

(dollars in 

millions)

Spending on 

total U.S. insured 

population

(dollars in 

millions)

Percentage 

spent on 

Medicare 

beneficiaries 

(percent) 

2010 rank

by total 

Medicare 

expenditures

Gammagard 

Liquid

Primary humoral 

immunodeficiency; 

multifocal motor 

neuropathy

191 770 24.8 26

Tysabri Multiple sclerosis; 

Crohn’s disease

139 588 23.7 36

Source: GAO analysis of CMS, FDA, NIH, and drug manufacturer data.

a

End-stage renal disease (ESRD) is also known as stage 5 chronic kidney disease.

(290962)
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