GAO: Specialty drugs accounted for 10% of Medicare Part D spending in 2007

WASHINGTON The kinds of high-cost drugs commonly dispensed in specialty pharmacies accounted for 10% of the total prescription drug spending under Medicare Part D plans in 2007, according to a new report by the Government Accountability Office.

The GAO report found that of the $54.4 billion spent on prescription drugs in 2007, $5.6 billion went to specialty drugs, generally meaning those used to treat autoimmune disorders, cancer and chronic viral infections such as HIV and hepatitis C.

Of that $5.6 billion, Medicare beneficiaries who received low-income subsidies accounted for $4 billion, or 70% of the total. Of all beneficiaries who used at least one specialty drug, 55% reached the so-called “catastrophic coverage” threshold, at which point Medicare pays at least 80% of all drug costs. By contrast, 8% of beneficiaries who did not use specialty drugs reached the threshold.