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Who pays more for second- and third-tier drugs?

MANAGED CARE August 2010. © MediMedia USA
The Formulary Files

Who pays more for second- and third-tier drugs?

MANAGED CARE August 2010. ©MediMedia USA

Medicare Part D beneficiaries shoulder significantly more of the cost of second- and third-tier medications than Medicare beneficiaries with employer–based coverage, according to a new study in Research in Social and Administrative Pharmacy. The study looked at copayments and generic utilization from 2005 and from 2007, which is when Part D was implemented.

“Medicare Part D plans seem to be more aggressive in their use of cost sharing,” says Julie Urmie, PhD, co-author and associate professor in the department of pharmacy practice and science in the College of Pharmacy at the University of Iowa. “The differential that patients pay if they want a branded product instead of a generic was a lot higher in the Part D plans than in the employer-based plans.”

The researchers point out that generic use by Part D enrollees rose from 50 percent before the benefit began to 63 percent in 2007. The researchers cite the increasing use of cost sharing by prescription drug plans. Nearly 31 percent of Medicare-age people chose to stay with the prescription drug coverage in their employer plan rather than switch to a Part D plan in 2006, but data about this group’s cost sharing and use of generics after Part D was implemented is limited.

“Beneficiaries in Part D plans were achieving rates of generic utilization that were almost the same as people who had no insurance at all,” says Urmie. “Surprisingly, we found no effect of the copayment amount on the number of prescriptions used, but this group that we followed tended to be a higher income, higher educated population.”

In 2005, the generic utilization rate in the uninsured group exceeded the rate in the group with employer coverage by 7.4 percentage points. The difference between the uninsured and those with employer coverage was even greater in 2007 — 12.7 percentage points higher in the uninsured. The generic utilization rate for respondents in Part D was 11.5 percentage points higher than the rate for those in employer plans in 2007.

Copayment amounts/Generic utilization rates

Source for both charts: Goedken AM, Urmie J, Farris KB, Doucette WR. Impact of cost sharing on prescription drugs used by Medicare beneficiaries. Res Soc Admin Pharm; 2010(6):100–109