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An Analysis of the Impact of Breakthrough Therapies on Government Spending

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To evaluate public program spending on new medications in the drug development pipeline, Avalere projected the fiscal impact of 10 FDA breakthrough therapies to Medicare, Medicaid, and the health insurance exchanges created by the Affordable Care Act (ACA).

The 10 selected medications are likely to result in medication costs to the government of $49.3 billion over a 10-year period, including: $31.3 billion in Medicare spend; $15.8 billion in state and federal Medicaid spend; and $2.1 billion as a result of subsidies provided through exchange plans.

The analysis does not include the impact on government programs other than those identified above. Estimates reflect the gross cost of new medication use, and do not take into account changes in spending (positive or negative) as a result of treatment outcomes. This analysis does not consider savings or additional costs associated with other potential medical or pharmaceutical spending. The full analysis can be found in the chart pack.

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