Generic Substitution within a Class of Drugs for Medicare Part D Plans

The researchers examined the extent of generic drug use in Medicare’s stand alone drug plans for three classes of drugs: cholesterol drugs, antidepressants, and hypertension drugs. They determined whether plan-level benefit design and formulary design characteristics and the program’s overall design are associated with the use of generics. Specifically, they examined four research questions: 1) are shifts to generic alternatives within a drug class influenced by differences in benefit and formulary design; 2) does the impact of benefit and formulary design features differ between beneficiaries eligible for the Part D program’s low-income subsidy (LIS) and other, unsubsidized beneficiaries; 3) do effects vary by drug and drug class; and 4) does the coverage gap design feature of the Part D program affect the use of generics? The objective of this project was to provide policymakers with a better understanding of the forces that influence generic utilization and the potential opportunities to create health care cost savings within the Part D program.