Trends in Medicare Part D spending on topical steroids from 2012 to 2021: Increasing costs of generic topical steroids and potential savings

Abstract

Background: Increasing prescription drug costs are a major concern in health care. The literature lacks an up-to-date assessment of US expenditures on topical steroids, one of the most prescribed medications in dermatology.

Objective: To characterize trends in Medicare spending and costs per unit of topical steroids and to model potential savings from substitution of the cheapest steroid within each potency class.

Methods: This is a retrospective analysis of Medicare Part D Public Use Files, which provides prescription drug expenditure data between 2012 and 2021.

Results: Between 2012 and 2021, Medicare Part D spent $5.7 billion on topical steroids, with generics accounting for 98.3%. While there has been a steady decline since 2015, total annual spending has overall increased by 35.6%, from $322.2 million in 2012 to $437 million in 2021. Inflation-adjusted costs per unit increased for most generic topical steroids, while the rate of change declined with increasing market competition. Medicare had potential savings of $2.4 billion if prescriptions were substituted for the cheapest steroid within each potency class.

Limitations: The data set represented only 70% to 77% of beneficiaries with Part D plans, excluded manufacturer rebates, and aggregated all drug strengths. We also excluded drugs with proprietary vehicles.

Conclusion: Medicare expenditures on topical steroids have increased in the past decade, primarily driven by rising generic drug costs.

Keywords: Medicare; cost savings; health care expenditures; prescription costs; topical steroids.