Health Care Costs and Financing

Seniors use fewer generic drugs as a result of Medicare Part D

Generic drugs offer the same benefit as name-brand drugs but at greatly reduced prices. A new study shows that since the Federal Government began offering seniors help in paying for their prescription medications through Medicare Part D in 2005, many seniors have opted for brand-name medications over less expensive generic drugs.

Instead of generics, seniors were slightly more inclined to choose brand-name anti-inflammatories, antihistamines, beta blockers, and cholesterol-control drugs in 2006. Thus, they incurred more out-of-pocket expenses than before they were offered assistance through Medicare Part D. Generics accounted for 58 percent of all prescriptions in 2006 and the authors estimate that each generic prescription dispensed that year saved consumers and insurers about $120. When generics offer the same benefits as their name-brand counterparts and provide significant cost savings for consumers and insurers, the authors contend that shunning generics wastes money.

This slight decrease in the uptake of generics suggests that Medicare Part D's cost-saving benefits have not come to fruition, found the study. It compared 2005 with 2006 Medicare prescription data for 117,970 Medicare beneficiaries aged 67 to 79. This study was funded in part by the Agency for Healthcare Research and Quality (HS15699).

See "The impact of the Medicare Part D prescription benefit on generic drug use," by James X. Zhang, Ph.D., Wesley Yin, Ph.D., Shawn X. Sun, Ph.D., and G. Caleb Alexander, M.D., M.S., in the October 2008 Journal of General Internal Medicine 23(10), pp. 1673-1678.

Return to Contents
Proceed to Next Article