American College of Rheumatology Annual Meeting

American College of Rheumatology Annual Meeting

November 10, 2019
3 min read

Price increases doubled public spending on biologic DMARDs

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Natalie McCormick

ATLANTA — Annual public spending by Medicare and Medicaid on biologic DMARDs more than doubled, from $5.3 billion in 2012 to $10.3 billion in 2016, largely due to post-market price increases, according to Natalie McCormick, PhD, of Massachusetts General Hospital and Harvard Medical School.

At a press conference at the 2019 ACR/ARP Annual Meeting, McCormick added that manufacturers’ rebates have had little impact on these rising costs.

“Our study looked at the recent trends in spending on biologic DMARDs for U.S. public payers and the reasons behind those trends,” McCormick said. “Biologics are efficacious drugs for those with moderate to severe forms of inflammatory arthritis, but they are also quote expensive. They cost about $20,000 to $30,000 per patient each year, and because they are placed in specialty tiers, patients are responsible for a large portion of those costs, They pay a percentage instead of just a copayment.”

“Biologics are among some of the highest-spend drugs in the U.S.,” she added. “In 2016, three biologics were among the top five highest-spend drugs. However, the trends in public spending on these drugs have not been determined. It is important to separate the drivers of these costs because they have different implications, both for patients and for taxpayers, to see whether spending may be increasing because of increasing utilization or because of changes in price.”

To assess the changes in total spending and per-unit prices for biologic DMARDs, McCormick and colleagues studied data from the Medicaid Drug Spending Dashboard, for the years 2012 through 2016. Published by CMS, the datasets include national-level information on outpatient prescription medications, and cover all Medicare Part B, Part D and Medicaid enrollees. In addition, the researchers included all 11 biologic DMARDS approved by the FDA through December 2014 for the treatment of one or more rheumatic disease. The researchers set the December 2014 cutoff date to provide at least 2 years of follow-up data.

McCormick and colleagues calculated 5-year changes in total spending and per-unit prices, both for each included biologic DMARD and in aggregate. They then completed standard decomposition analyses to isolate four sources of spending growth. These sources were drug prices, uptake, treatment intensity and treatment duration, both excluding and including timevarying rebates.

According to the researchers, annual public spending on claims for the included biologic DMARDs from 2012 to 2016 more than doubled, from $5.3 billion to $10.3 billion. In addition, the mean drug price increased 52% in Medicare Part D and 20% in Part B. After adjusting for inflation, unit-price increases accounted for 56%, or $1.7 billion, of the $3 billion Part D spending increase during the study period, whereas only 37% was attributable to increased uptake.


Even after accounting for timevarying rebates, drug price increases were still responsible for 53% of increased spending, the researchers wrote. Although unitprices and spending were lower with Medicaid than Part D, the temporal trends and contributors were similar.

The researchers also found that adalimumab (Humira, AbbVie) and etanercept (Enbrel, Amgen), two of the oldest biologics, were prescribed to the largest numbers of Medicare Part D beneficiaries, and saw the most drastic price increases. These spending and price trends were also reflected in Medicaid.

Price increases were largely responsible for Medicare Part B’s spending growth on older biologics, such as adalimumab, infliximab (Remicade, Janssen) and rituximab (Rituxan, Genentech). However, increases in the number of recipients was the main driver of increased spending on five newer drugs — golimumab (Simponi, Janssen), ustekinumab (Stelara, Janssen), tocilizumab (Actemra, Genentech), certolizumab (Cimzia, UCB) and belimumab (Benlysta, GlaxoSmithKline).

“Our findings really show that there is a need to target price increases within Part D,” McCormick said. “One of the proposed measure to try to contain costs has been to shift some of the infusion medications from Medicare Part B to Part D, but we actually found that the price increases the most in Part D, and that is concerning because that is where patient cost sharing is greater.” – by Jason Laday


McCormick N. Abstract #2731. Post-market price changes alone account for most recent spending growth for biologics, and rebates have little impact. Presented at: American College of Rheumatology/Association of Rheumatology Professionals Annual Meeting; Nov. 9-13, 2019; Atlanta.

Disclosure: McCormick reports no relevant financial disclosures. Please see the study for all other authors’ relevant financial disclosures.