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Report shows Medicare spent more than $1.4 billion on discarded drugs during 2017 and 2018

The drugs were wasted because of the purchase of single-dose vials of medication, study says.

Mallory Hackett, Associate Editor

Medicare spent more than $1.4 billion on drugs that would eventually be wasted or discarded between 2017 and 2018, according to a report from MedicareAdvantage.com.

The majority of the medications that went unused were chemotherapy and cancer-treating drugs. In 2018, Medicare spent $392.3 million and $115.1 million, respectively, on discarded chemotherapy and anti-cancer drugs. They were wasted because the single-dose vials of medication had a higher dose than necessary to treat the average patient, according to the report from the company that bills itself as one of the largest Medicare sellers in the country.

The wasted $1.4 billion only accounts for discarded drugs that were covered by Medicare Part B, according to the report. Part B drug spending is just 16% of total Medicare drug spending, and the wasted or discarded drug spending accounts for only 2% of total Part B drug spending.

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In 2017, Medicare spent $695 million on discarded drugs. In 2018, this figure rose to $725 million.

WHAT'S THE IMPACT?

Under a system nicknamed "buy and bill," providers and hospitals can purchase single-dose vials of drugs and then bill insurers or patients for them when it gets used.

However, the drug must either be administered or thrown away after opening and because there is often a higher dosage in the vial than is appropriate for the patient. Some of it can get wasted, according to a study in The BMJ.

"The leftover drug still has to be paid for, even when discarded, making it possible for drug companies to artificially increase the amount of drug they sell per treated patient by increasing the amount in each single-dose vial relative to the typically required dose," the study in The BMJ said.

The drugs with the highest dollar waste in 2018 were Velcade, which had $122.6 million spent on discarded units, or about 27% of the total amount spent on it; Herceptin, which had $77.7 million for discarded units, or about 9% of total spending on the drug; and NPlate, which had $48.8 million spent on discarded units, or about 22% of the total amount spent on it.

To try to decrease the amount of money spent on unused drugs, the study suggests that policies should be put into place that require pharmaceutical companies to make more appropriate vial sizes and require drug-makers, hospitals and physicians to refund the federal government's expenses for discarded drugs.

THE LARGER TREND

To make its point, the MedicareAdvantage.com study gave examples of how the wasted money could have been spent on women's health, opioid-addiction recovery and COVID-19 treatment.

The $77.7 million that was spent on discarded units of Herceptin, a breast cancer drug, could have covered the Medicare spending to treat close to 2,000 additional women with Herceptin in 2018.

The wasted Medicare Part B drug spending from 2018 alone could cover the Medicare spending for Suboxone opioid-addiction treatment for over 250,000 Americans.

The $1.4 billion Medicare spent on discarded drugs in 2017 and 2018 could pay for 87,000 hospital ventilators, or nearly 16 ventilators for every hospital in the U.S., including prison infirmaries.

Twitter: @HackettMallory
Email the writer: mhackett@himss.org