Van Hollen Releases GAO Report Documenting Skyrocketing Costs of New Drugs

Press Release

Today Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, released a report from the Government Accountability Office (GAO) that examines trends in the costs of new drugs entering the market. The GAO looked at a variety of drugs covered under Medicare Part B -- and the results are cause for deep concern. Numerous new prescription drugs have come on the market over the past several years, some with extraordinary prices -- sometimes resulting in costs per patient of $100,000 per year or more.

"The rising cost of prescription drugs is putting heavy financial burdens on families and seniors across the country. People can live longer, healthier lives thanks to innovative research that leads to effective new drugs. But great strides forward in medical science will not be very useful if people cannot afford them. When you are asking people to spend tens of thousands of dollars out of their own pocket to treat diseases like cancer, we have a serious problem. " said Congressman Van Hollen. "We must look closely at how to promote innovation in a way that allows greater access and affordability for all Americans -- not just the wealthy few."

The GAO looked at 75 new drugs approved by the Food and Drug Administration since 2006 and covered under Medicare Part B, and found the following:

The 20 drugs with the highest costs per beneficiary had total yearly expenditures per beneficiary ranging from $51,000 to $536,000 in 2013.

Nearly half of the new drugs had expenditures per beneficiary greater than $20,000 in 2013.

Nearly two-thirds of new drugs had expenditures per beneficiary in excess of $9,000 in 2013.

Medicare beneficiaries are financially responsible for 20 percent of that cost -- meaning that for nearly two-thirds of new drugs, senior citizens and disabled workers with Medicare were on the hook for $1,900 to $107,000 per drug.

"We must act with urgency to address the skyrocketing prices that make these drugs unaffordable for most Americans. I am pleased that the Department of Health and Human Services is hosting a public forum today to discuss ideas for promoting pharmaceutical innovation, access, affordability, and better health. Finding real solutions will require all stakeholders to work together," Van Hollen added. "The information in this GAO report provides useful insight into the challenges we face."

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