Medicare Spent $2.1 Billion On Discarded Drugs From 2017 to 2019

Wasted Medicare dollars could be better spent on medication for seniors, women and people with cancer

Updated June 17, 2021

 

Our analysis of data provided by the Centers for Medicare and Medicaid Services (CMS) shows that more than $2.1 billion was wasted on discarded units of drugs from 2017 to 2019.

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 treatmentwomen’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 2019, Medicare spent $752 million on discarded drugs. That was up from $725 million the year before.

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

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.

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Graphic showing the drugs with highest amount of discarded doses by treatment type

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.

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Graphic showing amount of wasted spending based on treatment type

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 56 different drugs in 2019, most of them vital chemotherapy and cancer treatment drugs. 

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Graphic showing drugs of which more than 20 percent of doses was wasted

  • More than 1 out of every 4 units of the cancer-treating drug Velcade (generic name Bortezomib) reimbursed by Medicare in 2019 were discarded. The cost to Medicare for these discarded units added up to more than $114 million in 2019.

  • The amount of wasted money spent on discarded Velcade in 2019 could have paid for an additional 2.7 million doses, or enough to treat another 5,475 cancer patients.

  • More than 20% of Medicare spending on each of 6 chemotherapy and cancer treatment drugs — Velcade (Bortezomib), Jevtana (Cabazitaxel), Synribo (Omacetaxine Mepesuccinate), Azacitidine (Azacitidine), Dacogen (Decitabine) and Hycamtin (Topotecan HCL) — was wasted in discarded units in 2019. The combined cost of those discarded units was more than $166 million, or roughly 22% of the total wasted Part B drug spending for the year.

  • For every $2.71 Medicare spent on the prostate cancer drug Jevtana in 2019, $1 ended up being discarded as waste. This totaled more than $10,400 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 cancermenopausedepression and other conditions.

  • Medicare spent nearly $75 million on discarded dosage units of the breast cancer drug Herceptin. That wasted money could have covered the Medicare spending to treat over 1,800 additional women with Herceptin in 2019.

    Medicare similarly wasted over $45.6 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 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 nearly $16,000 per beneficiary who received the drug in 2019 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 2.6 million Medicare Part D beneficiaries were prescribed the antidepressant medication Sertraline or its name brand equivalent Zoloft in 2019, at a total cost to Medicare of $141 million.

    The $752 million in wasted 2019 Medicare Part B spending could have covered the Medicare cost of covering Zoloft or Sertraline for an additional 14.2 million beneficiaries – which we can assume would equal at least 7 million women.

  • Medicaid and Medicare combined to spend a total of over $4.4 million on the osteoporosis treatment drugs Actonel, Boniva, Fosamax and Reclast in 2019. Medicare wasted over 188 times that amount on discarded Part B drugs in the same year.

Putting $2.1 Billion Into Perspective: Opioid Addiction, COVID-19 Vaccination and Public Health

To further illustrate the amount of taxpayer money that was wasted on discarded Medicare Part B drugs in 2017, 2018 and 2019, we compiled a list of ways this amount of money could be put to use for a number of public health issues, such as building hospitalsproviding N95 surgical masks to all Americanstreating opioid addiction and more.

  • Over 164,000 Medicare Part D beneficiaries were prescribed the drug Suboxone or its generic form Buprenorphine/Naloxone in 2019 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 Suboxone opioid-addiction treatment for nearly 177,000 Americans.

  • $2.1 billion would cover the cost of 46.6 million flu shots (more than enough for every person in each of the 38 largest cities in America).1

  • $2.1 billion could pay for the total annual household health spending for over 168,000 families of four on an employer health insurance plan.2

  • Medicare’s wasted $2.1 billion could cover a years-worth of insulin for 5 million Medicare Part D beneficiaries with diabetes.3

  • The $752 million Medicare wasted on discarded Part B drugs in 2019 is more than the 2019 GDP of 10 countries.4

  • $752 million could cover the cost of 18.8 million COVID-19 vaccine doses, or enough to give one shot to every person in each of the 14 smallest U.S. states and the District of Columbia. 

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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 wasted $2.1 billion only accounts for discarded drugs that were covered by Medicare Part B, the medical insurance component of federally provided Original Medicare. Part B drug spending is just 16% of total Medicare drug spending.

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

2020 Part B drug waste data will likely not be available until 2022, so it remains to be seen what sort of effect these accountability measures may have on Medicare Part B drug waste.​

Conclusion

Although the total amount of Part B spending on discarded drugs is high, it only accounts for about 2% of total Part B drug spending.

To address this wasted spending and to significantly impact both the cost and care outcomes for millions of Americans, two possible changes could be implemented:

  • Require pharmaceutical companies to make more appropriate vial sizes
  • Require drugmakers, hospitals and physicians to refund the federal government’s expenses for discarded drugs

Data notes

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

We compiled drug spending amounts and beneficiary counts using the 2019 Medicare Part B Drug Spending Dashboard, the 2019 Medicare Part D Drug Spending Dashboard, the 2019 Medicaid Drug Spending Dashboard and the Medicare Part B Discarded Drug Units Reports from 2017, 2018 and 2019. 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 2021 insulin copay requirements for Medicare Part D plan carriers.

4 According to figures from the International Monetary Fund published October 2019.

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

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