The Medicare Part D doughnut hole: effect on pharmacy utilization

Abstract

The Medicare Prescription Drug Improvement and Modernization Act of 2003 offers prescription drug coverage through the Medicare part D program. However, the standard benefit does include a gap in coverage, commonly known as the "doughnut hole". This study, which included 90,615 subjects, aimed to evaluate the effect of the prescription drug coverage gap on drug utilization and expenditures. Beneficiaries in the study group were older (76.34 vs. 73.04 yr, P < .0001) and sicker (5.39 vs. 3.66 disease conditions, P < .0001) than those in the control group. They also incurred substantially higher out-of-pocket expenses ($2534 vs. $598, P < .0001) than the individuals in the control group. From the preperiod to the postperiod, the study group's average days of therapy decreased by 15.85% (from 1104 to 929, P < .0001), and total costs fell 28.02% (from $2441 to $1757, P < .0001). The average out-of-pocket costs increased by 88.94% (from $877 to $1657, P < .0001); in the control group, however, the average days of therapy increased by 1.77% (from 680 to 692), and total costs rose by 2.19% (from $1322 to $1351). Out-of-pocket costs decreased by 5.54% ($307 to $290). Using difference-indifference models, the Medicare part D prescription drug coverage gap was estimated to have reduced medication utilization by 187.49 days of therapy (P < .0001) while raising out-of-pocket costs by $796.49 (P < .0001) and increasing the generic utilization rate by 7.33% (P < .0001). Regular Medicare part D beneficiaries reduced medication utilization after they reached the coverage gap, which raises concerns those beneficiaries may face an increased risk of adverse health events.