Brand-names and higher-cost generics drive avoidable Medicare Part D expenditures: A quantitative analysis using...

Serving more than 50 million beneficiaries, Medicare Part D has a responsibility to balance broad prescription drug coverage with fiscal sustainability. We provide an up-to-date assessment of expenditures and cost-saving opportunities within the program, exemplified by our analysis on angiotensin-converting enzyme inhibitors (ACEis) and angiotensin II receptor blockers (ARBs). Our objectives were to characterize trends in utilization and spending on ACEis and ARBs among Part D beneficiaries, and to model potential savings from substituting (1) every brand-name prescription with therapeutically equivalent generics, or (2) every prescription with the least expensive generic in each drug class.

This was a retrospective analysis of the latest Medicare Part D database, containing prescription drug expenditure data from 2018 to 2022.

Between 2018 and 2022, the number of Part D enrollees increased from 44,249,461 to 50,305,097 (+13.7%). The number prescribed an ACEi or ARB rose from 18,625,796 to 20,643,466 (+10.8%), while annual expenditures on these drugs grew from $1.25 billion to $1.28 billion (+2.30%). Cost per dosage unit of brand-names remained largely unchanged (ACEis: -1.36%; ARBs: -1.98%), while generics saw a more notable price reduction (ACEis: -26.4%; ARBs: -13.3%). Over the years studied, we estimated potential cumulative savings of 1) $429 million with complete generic substitution, and 2) $2.66 billion by defaulting all prescriptions to the lowest-cost generic within each drug class.

Substantial savings are possible with both 1) complete generic substitution, and 2) mandatory use of the least costly generic formulation. Comparable opportunities likely exist for other widely prescribed drugs.