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Researchers Assess Impact of Medicare Drug Benefit

By Mary Agnes Carey, CQ HealthBeat Associate Editor

January 9, 2008 -- Medical researchers have found that the Medicare drug benefit has had a "modest but significant" effect on both reducing out-of-pocket expenses for seniors and increasing their use of prescription drugs.

The study, released Tuesday on the Web site of the Annals of Internal Medicine, found that the drug benefit led to a 13.1 percent decrease in out-of-pocket expenses for patients and a 5.9 percent increase in prescription use. Researchers from the University of Chicago Medical Center, Harvard University, and Virginia Commonwealth University used data from more than 117,000 patients to assess the impact of the drug plan, which was created in 2003 (PL 108-173) and implemented in January 2006. The study also will be published in the Feb. 5 print edition of the Annuals of Internal Medicine.

Researchers studied data on beneficiaries who filled at least one prescription in both the 2005 and 2006 calendar years at any retail or mail-order member of the Chicago-based Walgreens pharmacy chain. They compared the purchases of 117,648 patients aged 66–79 who were covered by Part D with control subjects aged 60–63 who were not yet eligible for the benefit.

For beneficiaries who enrolled before the May 15, 2006, deadline, the drug benefit saved them about $6 a month and gave them, on average, an extra three to four days worth of one medicine per month, the study found. After the enrollment deadline, the average savings among all eligible seniors in the study increased to about $9 a month and 14 extra days of medicine per month.

The study's authors said the report was the most thorough study to date to assess the impact of the drug benefit. G. Caleb Alexander, assistant professor of medicine at the University of Chicago Medical Center, said in a news release that the study found the drug benefit "had a modest but significant effect on both savings and drug use" but added that more research must be done to see whether those effects have any influence on people's health.

Centers for Medicare and Medicaid Services (CMS) Director of Media Affairs Jeff Nelligan said that CMS is reviewing the report's findings. "But we do know that on average, Part D beneficiaries are saving approximately $1,200 annually on their drugs and that Part D trimmed from 33 percent to 8 percent the number of seniors who had no drug coverage at all," he said. "Enhanced access, choice, and cost are some of the reasons underlying the most recent survey results of the program, which show that almost nine out of 10 beneficiaries are satisfied with Part D. "

On Monday, the group Consumers Union released an analysis that found 75 percent of Medicare drug plans have raised their costs in 2008, averaging $369 for the five commonly used drugs between December and January. Analyzing data from the Web site, the group found that about one in six plans increased prices on the five drugs by more than $500 alone during that time.

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