Medicare Spent $1.4B on Discarded Medicare Drugs

According to a recent study, Medicare spent $1.4 billion on drugs in 2017 and 2018 that ended up being discarded. More specifically, Medicare spent $695 million on discarded Part B drugs in 2017, and $725 million in 2018. Most of these wasted tax dollars went towards chemotherapy and cancer-treating drugs that were not used. Medicare now has plans for utilizing that $1.4 billion rather than wasting it.

Wasted Resources

hundred dollar bills and other bills crumbled in a trash can
$1.4 billion of wasted money was on drugs that were discarded, that could’ve been used for other things.

Most of the drugs that were discarded in this two-year period were unused units of chemotherapy drugs. They ended up being disposed of because many units were single-dose vials that contained a higher dose than was needed to treat the average patient. This $1.4 billion of essentially wasted money accounts for 16% of Medicare spending, and 2% of Part B drug spending. 

According to a report put forward by, this amount of spending could:

  • Cover a year’s worth of insulin for more than 3.3 million Part D beneficiaries 
  • Buy 87,000 hospital ventilators, which the country is in desperate need of due to the coronavirus pandemic 
  • Buy more than 1 billion N95 masks
  • Cover the cost of 31.6 million flu shots
  • Go towards necessary women’s health treatments

Why Is So Much Money Wasted?

The report also suggests that Medicare’s “buy and bill” drug supply model is likely to blame for the waste. In the “buy and bill” model, healthcare providers and hospitals purchase, store and administer drugs to patients, and then bill insurers or patients for the drug. All drugs purchased by providers must either be administered or thrown away after opening, which often happens because many vials contain higher doses than is appropriate for patients.purple pill bottle laying down with white circle pills poured out

“Because of this model, drug manufacturers are incentivized to produce medication amounts that are more likely to end up discarded when single-dose vials or containers include higher doses than are necessary,” says the report on “Profits are increased by billing for the whole vial even if only a portion of it is needed and used. Doctors and hospitals also enjoy bloated profit margins under this system.”

The Government’s Considerations

The information in this study has prompted  CMS to consider enacting two possible solutions:

  • Require drugmakers, hospitals, and doctors to refund CMS for discarded drugs
  • Require pharmaceutical companies to right-size drug containers so that no medication gets wasted/discarded
  • Do both of the above

About The Author:
Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.

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