Medicare Part D's Effects on Elderly Patients' Drug Costs and Utilization

Objectives: To analyze Medicare Part D's net effect on elderly patients' use of and out-of-pocket (OOP) costs for prescription drugs and to compare these with standardized results from prior studies. Study Design: Our dataset contains 1.4 billion prescriptions from Wolters Kluwer Health from December 2004 through December 2007 for patients whose age as of 2007 was more than 57 years. Methods: Days' supply per capita, OOP cost per day's supply, and number of individuals filling prescriptions were compared before and after January 2006 for those over age 66 years versus those age 58-64 years. Adjustment was made for under-reporting of pure cash prescriptions in the data. Results: Elderly patients' utilization in the first year of Part D increased compared with that of supply near-elderly patients by 8.1% for days and 4.8% for the number of individuals filling prescriptions, and their OOP costs declined by 172%. Although elderly patients' OOP costs in the second year were reduced an additional 5.8%, days' supply increased by only an additional 1.0%. Correcting for the under-reporting of pure cash prescriptions yielded effects of 8.1% and -3.5% for days' supply and -15.6% and -7.2% for COP costs in 2006 and 2007, respectively. A standardized comparison with previous estimates from Walgreens data showed that our utilization estimates were 2.6 times larger. Conclusion: Part D lowered elderly patients' OOP costs and increased utilization, primarily during the first year of the program. Magnitudes vary substantially across studies because of differences in data and methods.