SEATTLE — With generic prescribing, a little can go a long way. In fact, by using generics 10% of the time, the Medicare Part D program could reduce drug spending by as much as $2.3 billion, according to an analysis presented at the annual research meeting of Academy Health.
That could be important because the analysis also showed that about 22% of Medicare beneficiaries who used to receive a $600 subsidy for prescription drugs under the previous Medicare program will no longer qualify for a subsidy and 16%–23% will probably end up in what is called the “doughnut hole” of Medicare Part D, where they will have no drug coverage, said M. Christopher Roebuck, an economist with CareMark, Hunt Valley, Md., a leading pharmacy-benefits management company.
Mr. Roebuck and colleagues used data from 37,425 people enrolled in Medicare drug discount card programs for at least 6 months, and who had filled at least one prescription. The researchers assumed those same usage patterns, with some increase in usage when out-of-pocket costs go down, and applied a 3.5% annual rate for inflation.
Enrollees filled a mean of 19 prescriptions per year, 10 of which were for generic drugs and 9 for brand name. The mean total cost for their drugs was $849, of which a mean of $538 was out of pocket.
The analysis suggests that out-of-pocket costs could increase for these beneficiaries by $38–$187 annually. Those who are low income and currently qualify for the $600 subsidy could face an increase in out-of-pocket costs in the range of $58–$86 annually.
If the generic prescription rate were increased by 10%, it would save the beneficiaries a mean amount in the range of $41–$55 in out-of-pocket costs and would decrease the amount spent by Medicare on each beneficiary by $62–$71.
That increase in the use of generics would also reduce the number of beneficiaries who would get into the doughnut hole by 1%–2%. The doughnut hole—where Medicare Part D stops coverage—kicks in when a patient has spent $2,250 on drugs and lasts until they have spent $5,100, at which point coverage begins again.