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Logo of nihpaAbout Author manuscriptsSubmit a manuscriptHHS Public Access; Author Manuscript; Accepted for publication in peer reviewed journal;
 
J Am Geriatr Soc. Author manuscript; available in PMC 2011 September 1.
Published in final edited form as:
PMCID: PMC2946375
NIHMSID: NIHMS199782

Changes in drug utilization and out-of-pocket costs associated with Medicare Part D implementation: a systematic review

Jennifer M. Polinski, MPH, MS,1,2 Elaine Kilabuk, BA,3 Sebastian Schneeweiss, MD, ScD,1,2 Troyen Brennan, MD, JD,4 and William H. Shrank, MD, MSHS1,2,3

Abstract

Medicare Part D was implemented 4 years ago. Despite the fact that public-use Part D data were unavailable until late 2008, researchers have used alternate data to examine Part D's impact on drug utilization and out-of-pocket costs. In a systematic review of Medline from 2006 – October 2009, we sought to summarize the literature about drug use and costs after implementation and during the transition period and coverage gap. We included studies presenting original results regarding drug utilization and costs following Part D implementation. Case reports and series and simulation studies were excluded. Of 552 originally identified articles, 26 met selection criteria: 13 regarding Part D's overall impact in the year(s) following implementation, 7 describing the Part D transition period, and 6 concerning the coverage gap. Part D implementation was associated with a 6-13% increase in drug utilization and a 13-18% decrease in patients' costs. The transition period was associated with no significant changes in utilization or costs for elderly dual-eligible beneficiaries, but effects in other populations were mixed. Entry into the coverage gap was associated with a 9-16% decrease in drug utilization and increases in costs of up to 89%. In summary, studies examining disparate data associated Part D's implementation found consistent positive effects on drug utilization and costs but revealed unfavorable trends in the coverage gap. The effect of the Part D transition period remains unclear. While public-use data will validate these results, policymakers can use the existing evidence to inform changes and enhancements to Part D immediately.

Keywords: Medicare Part D, drug utilization, out-of-pocket costs, systematic review

Background

To improve seniors' access to prescription medications, Congress passed the Medicare Prescription Drug Improvement and Modernization Act.1 The Act established a voluntary prescription drug insurance benefit, known as Medicare Part D (Part D) which began on January 1, 2006. Since the program's inception, policymakers and researchers have been eager to assess Part D's impact on prescription drug utilization and beneficiaries' out-of-pocket costs. However, the Part D legislation did not allow for use of Medicare prescription drug data for nearly 3 years. To date, 4 years after Part D's inception, no studies have been published using these data.

Despite this data limitation, researchers have turned to alternate data sources, including retail pharmacy transaction data and patient self-report surveys, to evaluate Part D's impact. In this systematic review, we evaluate the peer-reviewed literature from 2006 – October 2009 and focus on studies assessing Part D's effect on seniors' drug utilization and out-of-pocket spending for prescription medications. We examine studies regarding 1) Part D's impact in the first year(s) of the benefit and 2) in the early months of 2006, known as the transition period, during which many patients with previous drug insurance through Medicaid were automatically transitioned to Part D drug coverage. We also examine studies that highlight changes during the coverage gap (Donut Hole) when beneficiaries are responsible for 100% of drug costs. Taken together, these studies currently represent the best data available regarding Part D's impact on Medicare beneficiaries' access to, utilization of, and spending for prescription drugs.

Methods

Data sources

A systematic search was performed to identify studies addressing the impact of Medicare Part D implementation on beneficiaries' drug utilization and out-of-pocket costs. Initial searches were limited to articles published in Medline between January 1, 2006 and October 31, 2009. Our search focused on any term relating to Medicare Part D (e.g., [Medicare AND drug benefit OR drug plan OR prescription]). Articles containing at least one search term were included in the review. We reference mined articles from our initial search.

Study selection

Articles were included if they reported original results, whether drawn from self-report surveys or prescription drug claims. We excluded case reports and series as well as simulation and modeling studies. Two reviewers [W.S. and E.K.] evaluated the titles and abstracts of search results to identify potentially relevant articles. Complete articles were assessed for inclusion by two reviewers [J.P. and E.K.].

Data extraction

Data was extracted from selected articles by three reviewers [J.P., W.S., E.K.] and differences resolved by consensus. Variables assessed included the key research questions, Part D time period assessed, data sources, characteristics of the patient population, study design, results regarding drug utilization and/or costs, and patients' progression through the four phases of the Part D benefit. Two reviewers [J.P. and W.S.] used the Newcastle-Ottawa Scale2 to assess the quality of each cohort study. Studies were grouped into 3 main evidence tables: those that focused on Part D's impact on drug utilization and costs during 1) the year(s) following implementation 2) the transition period, and 3) the coverage gap. Data sources for each study are listed in the “Data sources and patient characteristics” column of each evidence table.

Results

Of 552 potentially relevant abstracts and titles screened, 42 were evaluated in full, and 26 met all inclusion and exclusion criteria. Thirteen articles described prescription drug utilization and costs in the year(s) following Part D implementation,3-15 7 described use and costs during the Part D transition period,16-22 and 6 examined the Part D coverage gap.23-28 One study8 reported data related to the year after implementation and to the coverage gap.

Part D's overall impact in the year(s) following implementation (Table 1)

The first study used a random sample of 584,509,537 prescription claims from a large pharmacy chain.4 Researchers observed a 12.8% absolute increase in days of therapy and an absolute 18.5% decrease in out-of-pocket costs per day of therapy following Part D implementation. A second study using data from the same chain found a 5.9% increase in pill-days and a 13.1% decrease in out-of-pocket expenditures from 2005–2006.5 An assessment using claims from a prescription transaction manager found that compared with a cohort of patients aged 58-64, elderly patients 65+ experienced an increase in days supply of 8.1% from 2005—2006. Out-of-pocket costs for elderly patients decreased 17.2% relative to those of near-elderly patients from 2005—2006.3

Compared to a control group of patients in employer-sponsored drug plans, patients with hyperlipidemia who were newly enrolled in a Medicare Advantage Part D plan increased their number of monthly prescriptions by 44% in 2006 compared to 2005, but patients using oral anti-diabetic drugs did not.10 New Part D enrollees with hyperlipidemia immediately increased their out-of-pocket costs by $17 in January 2006 as compared to December 2005 (a 31% change) and then an additional $41 per month during 2006 (a 74% change) in comparison to the control group. Researchers using Medicare Current Beneficiary Survey (MCBS) data from 2004 and enrollment and pharmacy claims data from a large Part D plan in 2006 found a 7% increase in the number of prescriptions and a 16% decrease in out-of-pocket costs associated with Part D implementation.7 Cost effects were modified by type of Part D insurance. Low-income subsidy recipients saw costs decline from $741 in 2004 to $160 in 2006, while dually-eligible patients saw costs decline from $164 in 2004 to $45 in 2006. Part D enrollees with no subsidies saw costs increase slightly, from $842 in 2004 to $897 in 2006.

Several studies examined Part D's impact on specific types of drugs. Using claims from a large pharmacy chain from 2005-2006 to examine 3 psychotropic drug classes, Part D's implementation was associated with a monthly increase of 1,679 prescriptions for antidepressants and 567 prescriptions for antipsychotics.6 There were no changes in benzodiazepine use. The proportion of costs paid out-of-pocket decreased 18% for antidepressants and 21% for antipsychotics, but increased 19% for benzodiazepines. A second study in patients who had no drug insurance in 2005 and had the opportunity to enroll in Part D in 2006 examined drug utilization changes for four drug classes.8 Defined daily dose increases were observed for statins (22%), clopidogrel (11%), and proton pump inhibitors (37%) during the year following Part D implementation. Warfarin use did not change. Co-payments for all drugs except branded omeprazole declined significantly, with monthly co-payments per 30 defined daily doses $15-$80 lower during the stable Part D period than in 2005. In another study using retail pharmacy data, Part D implementation was associated with changes in generic utilization which varied by drug class: increased use of generic ACE inhibitors (10%) and benzodiazepines (19%) but decreases in the use of generic anti-hyperlipidemics (-5%), NSAIDs (-8%), antihistamines (-25%), and beta-blockers (-3%).9 Overall, Part D enrollees were 5% (95% CI, -6% to -5%) less likely to fill a prescription for a generic medication in 2006 than in 2005 compared to non-enrollees.

Three studies focused on specific populations. Using data from a large long-term care pharmacy provider, Breisacher et al, found little impact of Part D enrollment among long-term nursing home residents.11 As compared to non-enrollees, Part D enrollees had a 0.50 prescription per month decrease in utilization following enrollment, a decline that resolved by December 2006. Part D enrollment was associated with a 3% decrease in out-of-pocket costs in 2006 as compared to 2005. Kim et al. quantified the average number of prescriptions and the costs of Part D coverage for 16,655 patients with atrial fibrillation.12 In 2006, these beneficiaries filled 46 prescriptions on average, and 58.8% reached the coverage gap. Patients spent $3,457 out-of-pocket in 2006, but atrial fibrillation drugs accounted for only 15% of that spending, suggesting that comorbidities drove spending. A second limited descriptive study quantified costs among 42,801 patients with diabetes enrolled in 2 Medicare Advantage Part D plans. Total drug spending averaged $2,182, and out-of-pocket spending averaged $807 in 2006.15

Finally, two studies assessed changes in the prevalence of cost-related non-adherence to medications (CRN) using 2004–2007 MCBS data.13, 14 Part D implementation was associated with a significant reduction in CRN prevalence, from 14.1% in 2005 to 11.5% in 2006. More modest reductions were seen between 2004-200514 and 2006-2007.13

The Part D transition period (Table 2)

Most studies of the Part D transition period examined the experiences of patients dually-eligible for Medicare and Medicaid. Basu et al. spotlighted elderly dual-eligibles' experiences using a 5% random sample of pharmacy chain data. The Part D transition appeared to have no effect on medication continuation, discontinuation, initiation, and initiation of a generic drug, as rates of these behaviors were comparable in dual-eligible elderly patients and in near-elderly Medicaid patients. There were no observed changes in out-of-pocket expenditures. Shrank et al. similarly found no drug utilization differences during the transition period among elderly dual-eligibles for five drug classes: warfarin, proton pump inhibitors, statins, clopidogrel, and benzodiazepines.21 After Part D, elderly dual-eligible warfarin users experienced significant decreases in out-of-pocket costs of $0.41 per 30 days' supply, while statin, proton pump inhibitor and clopidogrel payments did not change. Users of benzodiazepines, which were not covered under Part D because of safety concerns, saw co-payments increase 91% post-Part D. Drug switching, possibly due to Part D plan coverage issues, was modest and no significant differences were seen in 2006 as compared to 2005 in each class studied except proton pump inhibitors (2.99% switching rate), a class where all drugs have similar efficacy and safety profiles. Golden et al. further explored benzodiazepine use by dual-eligibles in Florida's Medicaid program, which contracted with an outside pharmacy benefits provider to fill prescriptions not covered by Part D. 18 Seventy percent of all prescriptions filled were for benzodiazepines, suggesting that because Medicaid programs continued to provide coverage, Part D's goal of reducing benzodiazepine use was not met. In contrast, Hall et al. observed Part D transition difficulties among 325 non-elderly dual-eligibles in Kansas who participated in a telephone survey.19 During the transition to Part D, 20% reported prescription filling difficulties and 8% reported discontinuations. Many patients (46%) reported increased out-of-pocket costs under Part D.

Das-Douglas et al. conducted a cross-sectional study among 125 homeless and marginally-housed individuals with HIV.17 Of 14 patients who reported HIV treatment interruptions during the first quarter of 2006, 10 (71%) were Part D insured, and 9 of these cited plan coverage restrictions as a cause. Of 44 patients who enrolled in Part D, almost 60% reported increased costs for HIV medications. However, it is unclear whether all patients were transitioning to Part D, as some had other drug insurance coverage in 2006.

Finally, two studies reported the results of a cross-sectional survey of psychiatrists to assess the experiences of dual-eligibles with mental illness.20, 22 Psychiatrists surveyed reported that 44% of their 1,816 dual-eligible patients experienced a psychiatric medication access problem during the transition period. Of these, 35% were unable to access refills or new prescriptions, 19% were switched to a different drug because of coverage issues, and 22% had access difficulties due to cost.20

Part D's impact in the coverage gap (Table 3)

Sun and Lee focused on Part D enrollees who reached the coverage gap by June but did not reach the catastrophic coverage period in 2006.27 Compared to non-enrollees who reached the coverage gap spending threshold but did not experience a gap, enrollees decreased their prescription days purchased by an average of 16% in the coverage gap. During the gap, generic drug utilization increased by 25% in the Part D group but only 5% in the non-enrollee group. Average total costs in the Part D group decreased 28% in the coverage gap, but out-of-pocket costs increased 89%, while total costs in the non-enrollee group increased 2% and out-of-pocket costs decreased 6%. Zhang et al. found similar drug utilization decreases of 14% in the coverage gap among Medicare Advantage Part D plan enrollees.28 Pedan et al. observed that patients who reached the coverage gap filled an average of 4.86 prescriptions per 30 days in the initial coverage period and 4.40 prescriptions per 30 days in the coverage gap, a 9.47% decrease.25 In Schneeweiss' study, prescription use during the coverage gap also showed per month declines: clopidogrel -5%, warfarin -4.8%, and statins -6.3%.8 Out-of-pocket expenditures during the coverage gap increased between $12 (warfarin) and $65 (clopidogrel) per 30 defined daily doses compared with pre-coverage gap costs.

In looking at adherence, Raebel et al's study noted that declines in medication adherence were similar between Part D enrollees who experienced a gap in coverage and non-Part D enrollees who reached the coverage gap spending threshold (but whose coverage was uninterrupted) with the exception of 2 drug classes, the anti-hypertensives and anti-diabetic agents, where discontinuation rates were higher among Part D enrollees in the coverage gap.26 Cronk et al. found that in the coverage gap, 20% of Part D enrollees discontinued a medication because of cost compared to only 5% of non-enrollees who reached the coverage gap spending threshold.23 Part D enrollees were 5 times (95% CI, 2—13) more likely to use medication cost-lowering strategies in the gap than were non-Part D enrollees. Hsu et al. surveyed Part D enrollees who did and did not reach the coverage gap in 2006 about their drug cost-coping behaviors.24 Compared to beneficiaries who were not aware of the coverage gap, the 36% of beneficiaries who knew about the gap were 11% (95% CI, 0.8—21.9%) more likely to report a behavior to reduce drug costs.

Discussion

In this review, we identified 26 studies evaluating the effect of Medicare Part D implementation on drug utilization and out-of-pocket costs. As expected, Part D's inception was associated with a consistent overall increase in drug utilization and a decrease in out-of-pocket costs for enrollees. The transition to Part D went smoothly for many elderly dual-eligible patients, but other vulnerable populations appear to have experienced difficulties. Finally, the Part D coverage gap was associated with decreased drug utilization and increased out-of-pocket costs.

There was little variation in effect estimates among studies evaluating the effect of Part D implementation: a 6-13% increase in drug utilization and a 13-18% decrease in out-of-pocket drug costs. Changes in utilization and costs varied by drugs, disease and/or population studied, underscoring the need to consider such factors when assessing Part D's impact. However, there was little indication that Part D selectively led to increased use of essential, underused drugs as compared to overused medications.13

In studies of the Part D transition period, elderly dual-eligible beneficiaries generally fared well, while other populations seemed to experience problems. Two hypotheses may explain these disparate experiences. Due to concerns about the Part D transition for dual-eligibles, many of whom are elderly, both the Centers for Medicaid Services and the states instituted a variety of mechanisms to ease the change, including auto-enrollment and temporary continuation of Medicaid drug coverage during early 2006.29 In contrast, vulnerable populations, such as those with HIV or mental illness, may have had difficulties with the transition due to factors associated with their illnesses.

A second hypothesis is that studies using claims data were unable to identify medication access problems because claims reflected only successfully filled prescriptions, not attempted fills, whereas the survey-based studies were able to tease out these problems. Using claims data, no changes were seen in medication continuity for benzodiazepines.26 Similar methodology might be used to examine continuity of other medications during the transition period, shedding light on the ability of drug claims versus survey-based data to expose medication access problems.

Finally, across all studies, Part D beneficiaries' entry into the coverage gap was associated with decreased drug utilization of 9-16% (an amount similar in magnitude to the increases seen after Part D implementation) and increased out-of-pocket costs with changes as high as 89%. Patients who entered the coverage gap were 5-11% more likely to report discontinuing, switching and/or failing to initiate a medication than were patients who did not enter the coverage gap. Use of generic drugs increased 20% during the coverage gap. These studies suggest that when patients enter the coverage gap, the cost burden dramatically and immediately affects drug utilization and moves patients towards more affordable generic drugs.

The consistency of these findings has important implications. Similarly structured benefit gaps (e.g., drug caps) have been associated with adverse outcomes such as death and increased non-elective healthcare use.30 As Part D reforms are contemplated, policymakers must consider whether drug cost savings during the gap offset the benefits of drug coverage, with the gap potentially leading to adverse health outcomes and even greater spending on healthcare services.

The conclusions drawn from studies in this systematic review must be interpreted with caution. Even though research has found that elderly patients fill 97% of prescriptions within a single pharmacy chain, 31 studies that rely on retail prescription claims may miss prescriptions for patients who use more than one pharmacy chain. Studies evaluating patients without prior drug insurance did not have Part D enrollment files for patients but rather estimated Part D coverage using cost algorithms, so there is likely some misclassification. Finally, these studies offer little or no evidence regarding the impact of Part D on health outcomes. Because the primary goal of Part D was to improve the health of Medicare beneficiaries, such studies are desperately needed.

Using different data sources, designs, and analytic approaches, the studies included in this systematic review showed consistent estimates of Part D's impact in the initial year(s) of the benefit as well as during the coverage gap period. Conflicting results regarding the Part D transition period can be further examined using existing data and methodologies applied to specific drug classes and populations. While we look forward to studies that employ public-use Part D claims, we believe that the currently available evidence documents Part D's role in improving medication access for Medicare beneficiaries and highlights Part D benefit features such as the coverage gap that merit reconsideration and potential improvement. As the fate of the Part D benefit and the coverage gap are pondered, data about effects on health outcomes are urgently needed.

Acknowledgments

Sponsors' role: The sponsors had no role in the design or analysis of the study or in preparation of the manuscript.

Funding support: National Institute on Aging T32 AG000158 (Ms. Polinski); National Institute of Mental Health R01 5U01MH079175-02 (Dr. Schneeweiss); National Heart Lung and Blood Institute K23 HL-090505 (Dr. Shrank), and a research grant from CVS/Caremark. The sponsors had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; or preparation, review, or approval of the manuscript.

Footnotes

Author contributions: Ms. Polinski, Dr. Shrank, and Dr. Schneeweiss participated in the conception and design, acquisition of data, writing and critical review of the manuscript, and data analysis as well as obtaining funding. Ms. Polinski had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis. Ms. Kilabuk participated in the conception and design, acquisition of data, writing and critical review of the manuscript, and data analysis. Dr. Brennan participated in the conception and design, critical review of the manuscript and data analysis.

Conflict of interest: Dr. Schneeweiss is a paid member of the Scientific Advisory Board of HealthCore and a consultant to HealthCore, WHISCON and RTI. Dr. Schneeweiss is Principal Investigator of the Brigham and Women's Hospital DEcIDE Center on Comparative Effectiveness Research funded by AHRQ and of the Harvard-Brigham Drug Safety and Risk Management Research Center funded by FDA. Within the past 5 years, Dr. Schneeweiss was funded by an investigator-initiated grant from Pfizer which has ended. Dr. Shrank is the principal investigator for and has research funding from CVS/Caremark and Express Scripts. Dr. Schneeweiss is a co-investigator on and receives research funding from the CVS/Caremark grant. Dr. Troyen Brennan is an employee of CVS/Caremark. This work was funded, in part, by CVS Caremark, a private firm who offers coverage through the Part D program. Opinions expressed here are only those of the authors and not necessarily those of the agencies or sponsors. The remaining authors have no conflicts of interest to disclose.

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