Medicare Drug Spending: Where the Money Goes (2024 Data)
Analysis of Medicare Part D drug spending data. Which drugs cost Medicare the most, spending trends, and how to access CMS pricing datasets.
The scale of Medicare drug spending
Medicare Part D spent approximately $230 billion on prescription drugs in 2024. That covers about 50 million beneficiaries filling roughly 4.7 billion prescriptions per year.
Ten drugs alone account for over $60 billion of that spending. Understanding where Medicare drug dollars go is critical for anyone building in healthtech, whether for pharmacy analytics, formulary management, or policy research.
Top 10 drugs by Medicare spending (2024)
Based on CMS Medicare Part D Spending by Drug data:
| Rank | Drug | Condition | Spending (est.) |
|---|---|---|---|
| 1 | Eliquis (apixaban) | Blood clots | ~$16B |
| 2 | Ozempic/Wegovy (semaglutide) | Diabetes/obesity | ~$12B |
| 3 | Xarelto (rivarobaxan) | Blood clots | ~$8B |
| 4 | Revlimid (lenalidomide) | Cancer | ~$6B |
| 5 | Jardiance (empagliflozin) | Diabetes | ~$5.5B |
| 6 | Trulicity (dulaglutide) | Diabetes | ~$5B |
| 7 | Entresto (sacubitril/valsartan) | Heart failure | ~$4.5B |
| 8 | Mounjaro (tirzepatide) | Diabetes/obesity | ~$4B |
| 9 | Imbruvica (ibrutinib) | Cancer | ~$3.5B |
| 10 | Stelara (ustekinumab) | Autoimmune | ~$3.5B |
The dominance of diabetes, blood thinners, and oncology drugs reflects Medicare's aging population.
The GLP-1 spending explosion
GLP-1 receptor agonists (Ozempic, Wegovy, Mounjaro, Trulicity, Rybelsus) are the fastest-growing drug class in Medicare spending. Combined GLP-1 spending exceeded $20 billion in 2024, up from approximately $8 billion in 2022.
Drivers of this growth:
- Expanded indications (obesity coverage for Wegovy)
- Massive prescribing increases across primary care
- List prices of $900-1,300 per month
- Limited generic competition (first semaglutide generics expected 2026-2027)
The Inflation Reduction Act's Medicare drug price negotiation selected semaglutide for negotiation in 2025, with negotiated prices taking effect in 2027.
How to access Medicare drug spending data
CMS publishes several datasets for drug spending analysis:
Medicare Part D Spending by Drug: Annual file showing total spending, beneficiary count, and cost per unit for each drug.
https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-opioid-prescribing-rates/medicare-part-d-spending-by-drug
Medicare Part D Prescribers: Provider-level prescribing data showing which doctors prescribed which drugs and in what quantities.
NADAC (National Average Drug Acquisition Cost): Weekly pharmacy-level acquisition costs by NDC code.
# NADAC data via SODA API
curl "https://data.medicaid.gov/resource/a4y5-998d.json?\$limit=10&\$where=ndc_description like '%semaglutide%'"
ASP (Average Sales Price): Quarterly file for drugs administered in physician offices (Part B drugs).
Spending vs. volume: different stories
A drug can rank high in spending without being high in prescribing volume. The relationship between rank-by-cost and rank-by-claims tells you about pricing:
| Drug | Spending rank | Claims rank | Takeaway |
|---|---|---|---|
| Eliquis | 1 | 5 | Expensive per-claim |
| Atorvastatin (generic) | ~50 | 1 | Cheap, massively prescribed |
| Revlimid | 4 | ~200 | Extremely expensive, few patients |
This distinction matters for different analyses. Formulary managers care about spending rank. Population health teams care about claims volume.
The Inflation Reduction Act impact
Starting in 2026, Medicare can negotiate prices for select high-spending drugs. The first 10 drugs selected for negotiation (announced 2023, prices effective 2026):
- Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, plus NovoLog insulin
Estimated savings: $6 billion in the first year. The second batch of 15 drugs (including Ozempic) was selected in 2025 with negotiated prices effective in 2027.
For developers building pricing tools, this means drug prices are no longer static annual figures. Negotiated prices, rebates, and IRA provisions create a more complex pricing landscape that changes based on which program the patient is enrolled in.
Building analytics on CMS data
Practical approaches for working with CMS drug spending files:
Data size: The Part D Prescriber file is approximately 2 GB per year. The Drug Spending file is much smaller (~50 MB). Plan your infrastructure accordingly.
Join keys: NDC code connects spending data to drug identity. NPI connects to prescriber demographics.
Time series: CMS publishes these files annually with a 12-18 month lag. The 2024 data typically becomes available in mid-2026.
Normalization challenges:
- Drug names change (brand to generic transitions)
- NDCs get reassigned
- Dosage forms split and combine
- Spending includes both plan-paid and beneficiary out-of-pocket
FAQ
Where does the spending data come from? Part D spending data comes from prescription drug event (PDE) records submitted by Part D plans to CMS. It reflects actual claims processed through the system.
Does spending include rebates? No. Published CMS spending data reflects gross spending before manufacturer rebates. Net spending (after rebates) is approximately 20-30% lower but is not publicly reported at the drug level.
How often is spending data updated? Annually, with about an 18-month lag. CMS typically releases a year's data in the summer of the following year (2024 data available summer 2026).
Can I see spending by state or region? The prescriber-level file includes provider state. You can aggregate spending by geography through the prescriber data, though this reflects where the prescriber practices, not where the patient lives.
What about Part B drug spending? Part B covers drugs administered in physician offices (infusions, injections). This data is published separately in the ASP file and Medicare Part B Drug Spending dashboard.
Published on 2026-07-26 · 5 min read
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