Updated October 17, 2022

 

Our analysis of the most recent data provided by the Centers for Medicare and Medicaid Services (CMS) shows that more than $2.9 billion was wasted on discarded units of drugs from 2017 to 2020.

The majority of this wasted taxpayer money was spent on unused units of chemotherapy and cancer-treating drugs that were thrown away and unavailable for treating other patients in need of the drugs.

Most of this medication and financial waste is due to single-dose vials or containers of medications that include higher doses than are necessary to treat the average patient.

We identified key areas related to cancer treatment, women’s health and general public health (including COVID-19 vaccinations) that could benefit in drastic ways if given the amounts of money Medicare has wasted on discarded drugs.

In 2020, Medicare spent $719 million on discarded drugs. That was down from $752 million the year before.

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Graphic showing the change in Medicare spending on discarded units of drugs since 2017

Part B Drug Waste Report Key Findings

  • Nearly $107 million worth of discarded units of Velcade was charged to and reimbursed by Medicare in 2020. Velcade (Bortezomib) is a cancer-treating drug with 26% of each dose going to waste in 2020, on average. The cost of wasted Velcade was more than twice that of any other drug in 2020.

  • More than 30% of units of the drug Isovue-200 (generic name Iopamidol) reimbursed by Medicare in 2020 were discarded. Isovue-200 is used to help diagnose certain disorders of the heart, brain, blood vessels and nervous system. The cost to Medicare for these discarded units added up to more than $742,000 in 2020.

  • In 2020, more than 20% of each Medicare-reimbursed dose were discarded for 13 different drugs. The combined cost of these discarded units was almost $176 million.

  • The amount spent on wasted units of Givlaari (generic name Givosiran Sodium; used to treat porphyria) amounted to $43,287 per beneficiary.

  • Medicare paid for discarded units of at least 360 different drugs in 2020.

Why Is So Much Money Wasted on Discarded Drugs?

Research suggests that due to the “buy and bill” drug supply model, drug manufacturers are actually incentivized to produce medication quantities that are more likely to wind up discarded when single-dose vials or containers include higher doses than are necessary.

Profits are increased by billing for the whole vial, even if only a portion of it is needed and used. Doctors and hospitals also enjoy bloated profit margins under this system.

Valuable Cancer Drugs Are the Most Commonly Discarded and Account for Highest Costs of Waste

Medicare wasted more than $1 million per drug on discarded doses of 65 different drugs in 2020, most of them vital chemotherapy and cancer treatment drugs. 

  • More than 1 out of every 4 units (26.7%) of the cancer-treating drug Velcade (generic name Bortezomib) reimbursed by Medicare in 2020 were discarded. The cost to Medicare for these discarded units added up to more than $106 million in 2020.

  • The amount of wasted money spent on discarded Velcade in 2020 could have paid for an additional 2.6 million doses, or enough to treat another 5,921 cancer patients.

  • For every $3.60 Medicare spent on the prostate cancer drug Jevtana in 2020, $1 ended up being discarded as waste. This totaled more than $12,200 in wasted spending per beneficiary.

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Graphic showing amount of money per beneficiary spent on discarded doses

Necessary Women’s Health Treatments Could Have Reached More People With Wasted Funds

The money Medicare wasted on doses of drugs that were thrown away could have covered all or at least large portions of the costs many women face when getting treatment for breast cancerdepression and other conditions.

  • Medicare spent over $41 million on discarded dosage units of the breast cancer drug Herceptin. That wasted money could have covered the Medicare spending to treat over 1,100 additional women with Herceptin in 2020.

  • Medicare similarly wasted over $50.9 million on discarded units of Abraxane, which is also used to treat breast cancer. That wasted amount could have covered the Medicare spending for the Abraxane treatment of over 2,600 additional women.

  • The blood disorder drug Panhematin (Hemin) is used to help women who experience acute porphyria related to their menstrual cycle. Wasted Medicare spending on discarded units of Panhematin totaled over $16,700 per beneficiary who received the drug in 2020 alone.

  • According to a report from the Centers for Disease Control & Prevention (CDC), women are twice as likely as men to take antidepressant drugs. More than 2.7 million Medicare Part D beneficiaries were prescribed the antidepressant medication Sertraline or its name brand equivalent Zoloft in 2020, at a total cost to Medicare of $170.5 million.

    The $720 million in wasted 2020 Medicare Part B spending could have covered the Medicare cost of covering Zoloft or Sertraline for an additional 11.5 million beneficiaries – which we can assume would equal at least 5 million women.

  • Medicaid and Medicare combined to spend a total of over $164 million on the osteoporosis treatment drugs Actonel, Boniva, Fosamax and Reclast in 2020. Medicare wasted over four times that amount on discarded Part B drugs in the same year.

Putting $2.9 Billion Into Perspective: Opioid Addiction and Other Public Health Needs

To further illustrate the amount of taxpayer money that was wasted on discarded Medicare Part B drugs from 2017 through 2020, we compiled a list of ways this amount of money could be put to use for a number of public health issues, such as treating opioid addiction, providing flu shots, covering the cost of insulin and more.

  • Over 147,000 Medicare Part D beneficiaries were prescribed the drug Suboxone or its generic form Buprenorphine/Naloxone in 2020 to treat the symptoms of opioid withdrawal. The wasted Medicare Part B drug spending from the same year alone would cover the Medicare spending for Buprenorphine/Naloxone opioid-addiction treatment for nearly 66,000 Americans.

  • $2.9 billion would cover the cost of 64.4 million flu shots (more than enough for every person in 27 states and the District of Columbia).1

  • $2.9 billion could pay for the total annual household health spending for nearly 249,000 families of four on an employer health insurance plan.2

  • Medicare’s wasted $2.9 billion could cover a years-worth of insulin for 6.9 million Medicare beneficiaries with diabetes.3

  • The nearly $720 million spent on discarded drugs in 2020 alone would have covered the cost of approximately 18 million COVID-19 vaccine doses, or enough for 1 out of every 3 adults age 65 and over in the U.S.4

  • $720 million is also the same amount the U.S. government paid Eli Lilly & Co. for a new experimental Covid drug in February of this year.

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Graphic showing drugs with the highest amount of spending on discarded doses

How Is the Government Responding to Medicare Drug Spending Waste?

The discarded drug units report was first made publicly available as part of President Donald Trump's administrative efforts "to increase price transparency, lower prescription drug list prices and prevent drug wastage."5

Bipartisan legislation was introduced in February of 2019 by Senator Dick Durbin (D-IL) and co-sponsored by Senators Michael Bennet (D-CO), Sherrod Brown (D-OH), Rob Portman (R-OH) and Mike Braun (R-IN) which aims to require drug manufacturers to issue rebates to Medicare for discarded drugs in single-dose vials or else be subject to civil penalties.

Tweet from Senator Dick Durbin

The REFUND Act became law as part of the Infrastructure Investment and Jobs Act of 2021. Beginning on January 1, 2023, drug manufacturers will be required to refund Medicare for the billed amount of discarded doses of many types of drugs.

"For each calendar quarter beginning on or after January 1, 2023, the manufacturer of a refundable single dose container or single-use package drug shall, for such drug, provide to the [Medicare program] a refund" for the cost of discarded doses according to what CMS calls a JW Modifier.

Sen. Durbin's legislation will be the first major step in reducing future spending waste. ​Within three years, the Office of the Inspector General – in consultation with the CMS and the FDA – is required to submit a report to congress regarding the "impact this [legislation] is reported to have on the licensure, market entry, market retention, or marketing of biosimilar biological products."​​​​

Drug manufacturers and provider claims submitted for these drugs will be periodically audited by the Department of Health and Human Services.

Conclusion

Upcoming legislation will likely reduce wasted Medicare spending by incentivizing drug makers and providers to bill Medicare only for the units of medication that are used to treat beneficiaries. Data releases from the CMS and the Office of the Inspector General will reveal the extent to which this source of multibillion-dollar Medicare waste has been addressed.

MedicareAdvantage.com will update this report when the latest CMS data (2021) is made available.

Data notes

Our analysis is based on data made available through CMS.gov.

We compiled drug spending amounts and beneficiary counts using the 2020 Medicare Part B Drug Spending Dashboard, the 2020 Medicare Part D Drug Spending Dashboard, the 2020 Medicaid Drug Spending Dashboard and the Medicare Part B Discarded Drug Units Reports from 2017 through 2020. These are the most recent data available.

Drug usage was categorized by a drug’s primary use. 

 


1 Based on the median cost of $45 per flu shot in 2017 according to the Kaiser Family Foundation.

2 Using the Household Health Spending Calculator provided by Kaiser Family Foundation.

3 Based on 2023 Medicare insulin copay requirements.

4 $40 per vaccine cost according to the CMS. Over 65 population count according to the U.S. Census Bureau​.

5. CMS. (Dec. 19, 2019). CMS Releases Enhanced Drug Dashboards Updated with Data for 2018 [press release]. www.cms.gov/newsroom/press-releases/cms-releases-enhanced-drug-dashboards-updated-data-2018.

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