The Effect of the Medicare Part D Prescription Benefit on Drug Utilization and Expenditures

Information about the effect of the Medicare Part D Prescription Drug Benefit on drug utilization and expenditures is limited. The focus of this study was to estimate changes in prescription utilization and out-of-pocket expenditures attributable to Part D among a sample of persons eligible for the benefit. Generalized estimating equations were used to estimate changes in expenditures and utilization among beneficiaries. A control group was included to control for secular trends unrelated to the Part D benefit.

The setting for this study was a national pharmacy chain representing approximately 15 percent of all U.S. retail pharmacy sales. Participants included persons age 66 to 79 years (those eligible for Part D) and a control group of persons age 60 to 63 years (those ineligible for Part D) who had filled at least one prescription during the previous two calendar years (2005 and 2006). The final sample represented approximately 5.1 million unique beneficiaries and 1.8 million unique control individuals. The authors measured prescription utilization (measured in pill-days) and out-of-pocket expenditures, as determined from pharmacy claims from September 2004 to April 2007.

The study found that during the penalty-free Part D enrollment period (January 2006–May 2006), average monthly drug utilization increased by 1.1 percent (95% CI, 0.5% to 1.7%; P < 0.001) and out-of-pocket expenditures decreased by 8.8 percent (CI, 6.6% to 11.0%; P < 0.001). After enrollment stabilized (June 2006–April 2007), average monthly drug utilization increased by 5.9 percent (CI, 5.1% to 6.7%; P < 0.001) and out-of-pocket expenditures decreased by 13.1 percent (CI, 9.6% to 16.6%; P = 0.003). Compared with eligible non-enrollees, enrollees had higher out-of-pocket expenditures and utilization at baseline but experienced significantly larger decreases in expenditures and increases in utilization after enrollment.

Limitations of this study included that analyses were limited to claims within one pharmacy chain. The effect of the "doughnut hole" and the effect of changes on clinical outcomes were not evaluated. The authors concluded that the Medicare Part D prescription benefit resulted in modest increases in average drug utilization and decreases in average out-of-pocket expenditures among Part D beneficiaries. Further research is needed to examine patterns among other beneficiaries and to evaluate the effect of these changes on health outcomes.