Study: Medicare Part D Coverage Favors Generic Drugs Over Branded Counterparts

A new study found that Medicare Part D prescription drug insurance plans largely favor generic drugs over brand-name counterparts, despite previous reports to the contrary.

Published this week in Health Affairs, the study analyzed the Medicare Part D coverage of more than 1360 pairs of generic and brand-name drugs. The researchers observed that 0.9% of plans covered only the brand name drug in 2019, compared with approximately 84% of plans that cover only the generic. In total, approximately 15% of plans covered both the generic and brand-name versions.

"What our study found is, in fact, that Part D plan formularies are designed to favor generics much more often than the brand-name counterpart, which, in the end, saves patients money," said study lead Stacie Dusetzina, PhD, an Ingram associate professor of Cancer Research and associate professor of Health Policy, in a press release.

Using formulary coverage data from Medicare Part D and Medicare Advantage plans from the Centers for Medicare and Medicaid Services, the analysis looked at the data from 2012 to 2019. During that period, the researchers found that coverage of generic drugs increased, while the coverage of brand-name only drugs decreased to below 1%.

Additionally, the researchers found that for plans that cover both the generic and the brand-name drug, the generic was often either on the same or lower cost-sharing tier than the brand-name drug. This tier placement for generics means that patients would also pay less out of pocket for the generic version than the brand-name version.

"This is good news for patients who have chronic conditions that may need long-term treatment, since generics generally will save both the patient and the program money," Dusetzina said in the press release.

REFERENCE

Medicare Part D favors generic prescription drugs over branded counterparts, study finds. Vanderbilt University Medical Center; August 5, 2020. https://www.eurekalert.org/pub_releases/2020-08/vumc-mpd080520.php. Accessed August 5, 2020.