Study shows generics now own 63% of Medicare Part D market

Jun 23 2008

Wolters Kluwer Health, a division of Wolters Kluwer, has released the results of a study that looks at key statistical outcomes of the Medicare Part D (MPD) prescription drug program.

After conducting a comprehensive comparative analysis of 2007 MPD prescription drug claims to commercial plan claims, the company compiled a whitepaper with some compelling statistical revelations about the program's impact on both patients and pharmaceutical companies. All in all, it bears clear evidence of a growing affinity for generics and a continual slide away from brands. The publicly accessible whitepaper is posted on the company's website at www.wkhealth.com.

The study's aim was to measure how much impact the MPD coverage gap had on treatment decisions. In the end, it found that once a patient enters the coverage gap and has to pay all out-of-pocket expenses for a prescription there emerges a profound preference for generics over brands. For example, prior to January 2006 when the MDP program commenced, the generic-to-brand ratio was even with 50% of MPD patients overall using generics and 50% using brands. By the end of 2006, within the MPD population, that split increased to 56% for generics versus 43% for brands. But by 2007, that trend became even more pronounced with 63% of all MPD prescriptions going to generics versus 37% for brands - a split of more than 26 percentage points.

"Wolters Kluwer Health has been tracking Medicare Part D prescription data since the program's inception and we are now seeing a more pronounced shift away from branded medications towards generics," said Bob Jansen, Vice President of Managed Markets and Brand Analytics, Wolters Kluwer Health. "What's most striking though is the fact that of those who discontinue their branded drug therapy in the coverage gap, only 6% return to them after leaving the gap."

Using a statistical sampling of the "standard eligible" patient segment, the study suggests several outcomes that may not have been commonly anticipated. Highlights for 2007 include:

• Fewer patients entered the coverage gap in 2007 with 15.5% entering versus 17.1% in 2006.
• Patients are willing to stay on their branded medication while in the coverage gap for the first 60 to 90 days. However, with the average stay in gap increasing to over 100 days and the overall cost of branded medications rising, many patients are choosing to replace their branded drugs with generic alternatives.
• Claims for generics climbed to 63% of all MPD claims - a jump of nearly 6 percentage points over 2006.
• Among those in the coverage gap who discontinue their brands, only 6% returned to their branded medication after leaving the gap.
• For patients within the gap, drugs experienced extraordinary price disparity between brands and generics. For example, in the Lipid market alone, there is a $72 difference between the cost of a 30-day supply to the patient between a brand and a generic.
• In 2007, Medicare patients paid, on average, $21.99 for a 30-day supply of branded drugs in the top 10 therapeutic categories compared to $17.58 in 2006 - an increase of 25%.
• In contrast, commercial plan patients in 2007 paid an average of $26.31 for a 30-day supply - only $4.32 more than MPD patients. Conversely, in 2006, commercial plan patients paid an average $37.54 suggesting commercial plans decreased their costs on average by $11.23 in 2007.

Study Methodology

The study was compiled using Wolters Kluwer Health's Medicare Part D product suite, a powerful combination of information products designed to offer the most complete perspective on the impact of MPD. The study examined a statistical sample of the 2006 and 2007 cohorts and assigned MPD patients into either Standard Eligible or Low Income Subsidies (LIS) patient groupings.

Medicare Part D, originally enacted in 2003 as part of the Medicare Modernization Act (MMA), began on January 1, 2006. This federal drug program was designed to subsidize the cost of prescription drugs for over 44 million Medicare beneficiaries within the United States. Since its inception, MPD has been a harbinger of change within the prescription drug industry.

http://www.wkhealth.com/