Open AccessMedicare Part D Plans Rarely Cover Brand-Name Drugs When Generics Are Available
Author(s) -
Stacie B. Dusetzina,
Juliette Cubanski,
Léonce Nshuti,
Sarah True,
Jack Hoadley,
Drew J. Roberts,
Tricia Neuman
Publication year - 2020
Publication title -
health affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.837
H-Index - 178
eISSN - 2694-233X
pISSN - 0278-2715
DOI - 10.1377/hlthaff.2019.01694
Subject(s) - formulary , beneficiary , generic drug , medicare part d , brand names , product (mathematics) , prescription drug , business , medical prescription , medicare advantage , scope (computer science) , plan (archaeology) , advertising , medicine , drug , family medicine , pharmacology , health care , economics , computer science , finance , history , geometry , mathematics , archaeology , programming language , economic growth
Recent press reports and other evidence suggest that Medicare Part D plans may be encouraging the use of brand-name drugs instead of generics. However, the scope of such practices is unclear. We examined Medicare Part D formulary coverage and tier placement of matched pairs of brand-name drugs and generics to quantify how often preferred formulary placement of brand-name drugs is occurring within and across Part D plans and to assess the cost implications for Medicare and its beneficiaries. We found that in 2019, 84 percent of 4,176,772 Part D plan-product combinations had generic-only coverage (that is, the brand-name counterparts were not covered). Another 15 percent covered both the brand-name and generic versions of a product. For the small number of products whose brand-name versions were covered preferentially to their generic equivalents, beneficiary and Medicare prices were generally low for both products. Overall, we found that most Part D plan formularies are designed to encourage the use of generics rather than their brand-name counterparts. Policy makers should continue to monitor Part D formulary coverage patterns to ensure consistent and generous coverage for generic drugs, given their important role in reducing prescription drug spending.