Medicare Part D beneficiaries are twice as likely to discontinue their medication when they enter the “donut hole” than to turn to generic or cheaper drugs, researchers from Harvard University, Brigham and Women’s Hospital and CVS Caremark reported in PLoS Medicines. The donut hole is when a beneficiary has to pay 100% of previously subsidized prescription costs.

The authors looked at prescription medication use among 663,850 Medicare beneficiaries who were enrolled in over 200 Medicare Part D and retiree drug plans in 2006-2007.

The investigators wrote:

“The adverse clinical consequences of stopping or reducing adherence to essential medications can be both severe and costly. Our results indicate that beneficiaries faced with increased out-of-pocket cost burdens during the Part D coverage gap are twice as likely to discontinue their medications altogether, resulting in reduced medication adherence, rather than switch to more affordable or generic medications.”

Lead author, Jennifer M. Polinski, ScD, MPH, said:

“Proponents of the donut hole argue the coverage gap benefits the health care system by making participants more sensitive to medication costs. There is an expectation that people will seek less expensive drug options when they enter the donut hole and that action will result in cost savings both for them and for their health plans.

However, our findings show that when beneficiaries have to bear the full financial burden of the cost of their medications, they are twice as likely to stop taking their medications altogether and become non-adherent than they are to switch to more affordable or generic drugs. The resulting decrease in medication adherence could ultimately result in higher medical costs as a result of adverse health events.”

The Medicare Part D program was created by Congress in 2003. It included a coverage gap, which became known as the donut hole. Under the program, beneficiaries receive financial help on medication payments until plan and out-of-pocket expenses reach a $2,380 threshold (2010), at which point the beneficiary has to pay for 100% of drug costs until spending exceeds $4,550 (2010), at which point the financial benefits kick in again.

The researchers found that about two-thirds of all the beneficiaries they examined reached the donut whole within seven months of the fiscal year. According to other studies, between 11% and 14% of Part D enrollees who were not on low-income subsidies reach the donut hole annually.

Troyen A. Brennan, MD, MPH, executive vice president and chief medical officer of CVS Caremark, said:

“No doubt, this is a difficult area for policymakers. Taking cost out of the health care system is something everyone is trying to achieve. The Affordable Care Act incrementally eliminates the donut hole by 2020, but until that time program beneficiaries remain at risk of decreased drug utilization because of high out-of-pocket drug costs. A strategy that promotes the use of low cost medications and that keeps people adherent would result in better health outcomes and overall reduced health care costs.”

The authors concluded:

“A lack of financial assistance after reaching the gap spending threshold was associated with a doubling in discontinuing essential medications but not switching drugs in 2006 and 2007. Blunt cost-containment features such as the coverage gap have an adverse impact on drug utilization that may conceivably affect health outcomes.”

Written by Christian Nordqvist