Variation in generic dispensing rates in Medicare Part D

Area of Science:

• Health Economics
• Pharmaceutical Policy
• Geriatric Medicine

Background:

• Medicare Part D facilitates generic drug utilization, offering cost savings to beneficiaries, plan sponsors, and the government.
• Significant variability exists in generic drug adoption rates among different Medicare Part D plans, even within the same drug categories.

Purpose of the Study:

• To quantify the extent of variation in generic drug use within Medicare Part D.
• To identify patient, plan, and geographic factors associated with generic drug prescribing patterns.

Main Methods:

• An observational study design was employed, analyzing Medicare Part D claims data from 2006 to 2016.
• Descriptive statistics and regression analyses were used to assess variations in generic versus brand-name drug use and associated factors.

Main Results:

• Generic drug use has substantially increased in Medicare Part D over the study period.
• Persistent, significant variations in generic use across plans were observed in common therapeutic classes.
• Beneficiary demographics (gender, health status) and plan characteristics (type, premium, parent company) were associated with differing generic use rates.

Conclusions:

• While generic use has grown, plan-level variations persist, suggesting underlying influences beyond patient factors.
• Indirect evidence suggests that manufacturer rebates may influence the preference for brand-name drugs over generics in specific therapeutic classes.
• The proprietary nature of rebate data limits direct assessment, but observed variations provide circumstantial insights into plan and pharmacy benefit manager incentives.