Access to and use of $4 generic programs in Medicare

Abstract

Background: Although four-dollar programs ($4 per 30-day supply for selected generic drugs) have become important options for seniors to obtain affordable medications, little is known about access to these programs and the characteristics of those who use them.

Objectives: We quantify access to $4 programs based on driving distance; evaluate factors affecting the program use and potential cost-savings associated with switching to $4 programs in Medicare.

Design: Observational study.

Setting: US Medicare Part D data, 5% random sample, 2007

Participants: 347,653 elderly beneficiaries without Medicaid coverage or low-income subsidies.

Main measures: We evaluated how use of $4 programs was affected by driving distance to the store and the beneficiary's demographic and socioeconomic status, insurance coverage, health status, comorbidities, and medication use. For those who did not use the $4 programs, we calculated potential savings from switching to $4 generics.

Key results: Eighty percent of seniors in Medicare Part D filled prescriptions for generic drugs that were commonly available at $4 programs. Among them, only 16.3% filled drugs through $4 programs. Beneficiaries who lived in poor areas, had less insurance, more co-morbidities, and used more drugs and lived closer to $4 generic retail pharmacies, were more likely to use these programs. Blacks were less likely to use the program relative to Whites (15.0% vs. 16.4%; OR=0.75, 95% CI 0.71-0.80). While 53.2% of nonusers would save by switching to $4 program after incorporating travelling costs, 58% of those who could save would have net annual out-of-pocket savings of less than $20.

Conclusions: The take-up rate of $4 programs was low in 2007 among Medicare beneficiaries. As more stores offer $4 programs and increasing numbers of drugs become generic, more beneficiaries could potentially benefit, as could the Medicare program.

Figure 1

Distribution of driving distance to nearest retail pharmacy offering $4 generics according to whether beneficiaries resided in rural or metropolitan areas. Abbreviation: MSA Metropolitan Statistical Area.

Figure 2

Distribution of potential annual savings from switching to $4 programs among potential users. Panel A. Potential gross savings without incorporating the travelling costs among all non-users (n = 203,116). Panel B. Potential net savings after incorporating the travelling costs among those with positive net savings (n = 108,058).