The Effect of the Medicare Part D Discount Program on Prescription Drug Utilization Rates
Open Access
- Author:
- Miller, Laura Anne
- Area of Honors:
- Actuarial Science
- Degree:
- Bachelor of Science
- Document Type:
- Thesis
- Thesis Supervisors:
- Ron Gebhardtsbauer, Thesis Supervisor
Ron Gebhardtsbauer, Thesis Honors Advisor
Lisa Lipowski Posey, Faculty Reader - Keywords:
- Medicare
Prescription Drugs
Part D
Discount Program
Generic Dispensing Rate
Utilization Trends
PPACA - Abstract:
- After the national Medicare program was established in 1965, several decades passed until a prescription drug benefit was finally added to the program in 2003 as a result of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA). The Medicare Part D prescription drug benefit generally helped reduce the financial burden of prescription drug costs on elderly beneficiaries. However, the beneficiaries who reached the coverage gap of the Part D plan benefit design structure continued to face significant out-of-pocket costs. The Patient Protection and Affordable Care Act (PPACA) of 2010 established discount and subsidy payment programs to gradually phase out the coverage gap by year 2020. The PPACA provisions began in 2011 with a 50% manufacturer discount on brand-name drugs in the coverage gap and a 7% plan subsidy on generic drugs in the coverage gap. Prior to the implementation of these provisions, several researchers were concerned that the large 50% discount on brand-name drugs would encourage beneficiaries to utilize more expensive brand-name drugs instead of cheaper generic alternatives. This thesis examines brand-name and generic drug dispensing and utilization rates of pharmacy benefit management companies from before and after the implementation of the PPACA provisions to determine if the researcher’s initial concerns actually occurred. Additionally, this thesis examines some of the possible reasons for the trends in dispensing and utilization rates over the last several years.