OIG: High-price drugs driving up cost of Medicare Part D catastrophic coverage

Federal payments for Part D catastrophic coverage exceeded $33 billion in 2015, more than triple the amount paid in 2010, according to a new report by the Department of Health and Human Services’ Office of Inspector General. Drugs with an average price of more than $1,000 per month accounted for almost two-thirds of drug spending for catastrophic coverage by 2015, up from one-third in 2010. Ten of these high-price drugs accounted for nearly one-third of all drug spending for catastrophic coverage in 2015, according to the report. Beneficiaries enter catastrophic coverage when their out-of-pocket costs exceed a certain threshold. Under the catastrophic coverage, most beneficiaries pay a 5% coinsurance for drugs, while the federal government pays most of the remaining costs.