The effect of the Medicare Part D prescription benefit on drug utilization and expenditures

Ann Intern Med. 2008 Feb 5;148(3):169-77. doi: 10.7326/0003-4819-148-3-200802050-00200. Epub 2008 Jan 7.


Background: Information about the effect of the Medicare Part D Prescription Drug Benefit on drug utilization and expenditures is limited.

Objective: To estimate changes in prescription utilization and out-of-pocket expenditures attributable to Part D among a sample of persons eligible for the benefit.

Design: Generalized estimating equations were used to estimate changes in expenditures and utilization among beneficiaries. A control group was included to control for secular trends unrelated to the Part D benefit.

Setting: National pharmacy chain representing approximately 15% of all U.S. retail pharmacy sales.

Participants: Persons age 66 to 79 years (those eligible for Part D) and a control group of persons age 60 to 63 years (those ineligible for Part D). The final sample represented approximately 5.1 million unique beneficiaries and 1.8 million unique control individuals.

Measurements: Prescription utilization (measured in pill-days) and out-of-pocket expenditures, as determined from pharmacy claims from September 2004 to April 2007.

Results: During the penalty-free Part D enrollment period (January 2006 to May 2006), average monthly drug utilization increased by 1.1% (95% CI, 0.5% to 1.7%; P < 0.001) and out-of-pocket expenditures decreased by 8.8% (CI, 6.6% to 11.0%; P < 0.001). After enrollment stabilized (June 2006 to April 2007), average monthly drug utilization increased by 5.9% (CI, 5.1% to 6.7%; P < 0.001) and out-of-pocket expenditures decreased by 13.1% (CI, 9.6% to 16.6%; P = 0.003). Compared with eligible nonenrollees, enrollees had higher out-of-pocket expenditures and utilization at baseline but experienced significantly larger decreases in expenditures and increases in utilization after enrollment.

Limitations: Analyses were limited to claims within 1 pharmacy chain. The effect of the "doughnut hole" and the effect of changes on clinical outcomes were not evaluated.

Conclusion: The Medicare Part D prescription benefit resulted in modest increases in average drug utilization and decreases in average out-of-pocket expenditures among Part D beneficiaries. Further research is needed to examine patterns among other beneficiaries and to evaluate the effect of these changes on health outcomes.

Publication types

  • Research Support, Non-U.S. Gov't
  • Research Support, U.S. Gov't, P.H.S.

MeSH terms

  • Aged
  • Drug Prescriptions / economics*
  • Drug Prescriptions / statistics & numerical data*
  • Fees, Pharmaceutical*
  • Humans
  • Medicare Part D*
  • United States