Brand-Names and Higher-Cost Generics Drive Avoidable Medicare Part D Expenditures: A Quantitative Analysis Using ACEis and ARBs as a Model.

Abstract

Objectives: Serving more than 50 million beneficiaries, Medicare Part D has a responsibility to balance broad prescription drug coverage with fiscal sustainability. We provide an up-to-date assessment of expenditures and cost-saving opportunities within the program, exemplified by our analysis on angiotensin-converting enzyme inhibitors (ACEis) and angiotensin II receptor blockers (ARBs). Our objectives were to characterize trends in utilization and spending on ACEis and ARBs among Part D beneficiaries, and to model potential savings from substituting (a) every brand-name prescription with therapeutically equivalent generics, or (b) every prescription with the least expensive generic in each drug class.

Methods: This was a retrospective analysis of the latest Medicare Part D database, containing prescription drug expenditure data from 2018 to 2022.

Results: Between 2018 and 2022, the number of Part D enrollees increased from 44,249,461 to 50,305,097 (+13.7%). The number prescribed an ACEi or ARB rose from 18,625,796 to 20,643,466 (+10.8%), while annual expenditures on these drugs grew from $1.25 billion to $1.28 billion (+2.30%). Cost per dosage unit of brand-names remained largely unchanged (ACEis: -1.36%; ARBs: -1.98%), while generics saw a more notable price reduction (ACEis: -26.4%; ARBs: -13.3%). Over the years studied, we estimated potential cumulative savings of 1) $429 million with complete generic substitution, and 2) $2.66 billion by defaulting all prescriptions to the lowest-cost generic within each drug class.

Conclusion: Substantial savings are possible with both 1) complete generic substitution, and 2) mandatory use of the least costly generic formulation. Comparable opportunities likely exist for other widely prescribed drugs.