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Part D Nerds Celebrate Good Times

By John Reichard, CQ HealthBeat Editor

October 31, 2008 -- One of the databases that makes the Medicare research community drool consists of claims filed under the Medicare Part D prescription drug program. Researchers have been itching to know what secrets those claims reveal about the types of drugs seniors are being prescribed and potential flaws in the design of the Medicare drug benefit.

On Thursday, researchers were treated to some of the first findings gleaned from the data treasure trove, which Medicare officials hailed as an "unprecedented tool" for the evaluation of the drug benefit "and the entire Medicare program."

The biggest outlays under the drug benefit in 2006 were for the cholesterol reducer Lipitor, followed by the blood thinner Plavix and the anti-psychotic drug Zyprexa. Zyprexa is approved for treatment of schizophrenia and some cases of depression relating to bipolar disorder; one of its controversial off-label uses in the past has been for dementia but FDA warns that it is not approved for that use and that elderly patients taking the drug for that condition are at higher risk of death.

In the number four, five, and six positions respectively were Nexium, used for gastroesophogeal reflux disease; Seroquel, a treatment for bipolar disorder; and Risperdal, which is used to treat bipolar disorder and schizophrenia. Rounding out the top 10 of drugs that cost Medicare the most were in the number seven position, Prevacid, another acid reflux treatment; number eight, Norvasc, a drug for high blood pressure; number nine Aricept, a treatment for Alzheimer's disease, and number 10, Advair Diskus, used to prevent asthma and treat symptoms of chronic obstructive pulmonary disorder.

In terms of drug classes, cardiovascular drugs accounted for 22.7 percent of Part D spending on the top 100 drugs, followed by psychotherapeutic drugs at 17 percent and gastrointestinal drugs at 8.7 percent.

In 2006, which was the first year of the drug benefit, 90 percent of enrollees filled at least one prescription, the Centers for Medicare and Medicaid Services said. The rate at which generic drugs were dispensed climbed from 60 percent in 2006 to 64 percent in 2007. By the first quarter of 2008, that rate had climbed to 67.8 percent, according to data filed by plans offering Part D coverage.

In 2006, the average monthly Part D cost per beneficiary, including costs both to Part D plans and the beneficiary, was $203. Those costs were considerably higher under drug-only coverage plans compared to Medicare Advantage plans offering drug coverage.

The average number of prescriptions per enrolled beneficiary per month was 3.2 in 2006.

About 10 percent of Part D enrollees reached the level of prescription drug outlays in which they no longer received any Medicare coverage for prescription costs, a gap known as the "doughnut hole." On average it took beneficiaries reaching the gap about six months to get there in both 2006 and 2007, with those with drug-only coverage getting there faster than those with Medicare Advantage drug coverage. The average number of prescriptions filled showed little change after enrollees entered the gap, according to CMS.

Only 8.8 percent of all Part D enrollees had prescription drug expenditures high enough to qualify for catastrophic coverage provisions in which Medicare picks up 95 percent of drug costs. In almost all cases these enrollees were part of the low-income drug benefit that provides more comprehensive drug coverage.

Relatively few beneficiaries used medications in "specialty tiers," a category of high-cost drugs involving high out-of-pocket costs. Overall, 4.4 percent of enrollees used specialty tier drugs in 2007, which accounted for 10 percent of total drug costs.

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