The Effect of Medicare Part D on Drug Utilization and Expenditures

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The summary below is from the full report titled "The Effect of the Medicare Part D Prescription Benefit on Drug Utilization and Expenditures." It is in the 5 February 2008 issue of Annals of Internal Medicine (volume 148, pages 169-177). The authors are W. Yin, A. Basu, J.X. Zhang, A. Rabbani, D.O. Meltzer, and G.C. Alexander.

What is the problem and what is known about it so far?

In January 2006, the U.S. government began helping to pay for medicines taken by older people. The program, called Medicare Part D, is popular. However, it is not clear to what extent the program is saving people money or allowing them to obtain drugs they might not otherwise be able to afford.

Why did the researchers do this particular study?

To see what effect the new drug benefit has had on the amount that older people pay for their drugs and the number of pills they get from the pharmacy.

Who was studied?

117,648 adults between 66 and 79 years of age who filled at least 1 prescription at Walgreens in both 2005 and 2006.

How was the study done?

The researchers used information from the 16 months before and after the Medicare Part D program started to estimate how much money people would have spent on their medicines, and how many pills they would have received, if the program never existed. Then, to estimate the effect of the program, they compared peoples' actual expenses and pills received with the predictions of what would have happened if Part D had never existed.

What did the researchers find?

Before the enrollment deadline of 30 April 2006, the program saved people who enrolled in it about $8 a month and gave them an extra 5 to 6 days of pills, on average. After the enrollment deadline, the program saved enrollees about $9 a month and gave them an extra 14 days of pills, on average. Medicare beneficiaries who did not enroll in Part D saw smaller changes in out-of-pocket expenditures and prescription use.

What were the limitations of the study?

The information comes from only a small sample of people who used 1 pharmacy. In addition, the study does not tell us whether Medicare Part D led to any important changes in people's actual health.

What are the implications of the study?

Medicare Part D appears to have led to modest savings and modest increases in drug use by older people. More research is needed to see whether these effects have any influence on people's health.