Issue Brief 16-56
November 9, 2016

On October 28, the Centers for Medicare & Medicaid Services (CMS) notified states of next year’s clawback charges—the cost-sharing payments to the federal government for the Medicare Part D prescription drug program. The CMS release indicates that the per-beneficiary monthly clawback charge to states will increase by 11.93% in calendar year (CY) 2017. This is the largest increase since the program’s inception, and the second year of double-digit increases. Based on this rate increase, FFIS estimates that state payments will total more than $11 billion in CY 2017, a $1.2 billion increase.

For several years, the Part D program benefited from a slowdown in prescription drug costs, particularly as major specialty medications lost their patent protections. With the availability of new specialty drugs (such as those for Hepatitis C), growth in prescription drug utilization, and rising drug prices overall, this trend is reversing.