Study: Medicare 'doughnut hole' can lead to a decrease in medication adherence

WOONSOCKET, R.I. — Medicare Part D beneficiaries who enter the "doughnut hole," where they have to pay 100% of previously subsidized prescription costs, are twice as likely to discontinue their medications as they are to switch to more affordable or generic medications, according to a new study conducted by researchers from Harvard University, Brigham and Women's Hospital and CVS Caremark.

The study, published in PLoS Medicine, examined prescription drug use among more than 660,000 Medicare beneficiaries enrolled in more than 200 Medicare Part D and retiree drug plans in 2006 and 2007.

"Proponents of the doughnut hole argue the coverage gap benefits the healthcare 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 doughnut hole and that action will result in cost savings both for them and for their health plans," stated Jennifer Polinski, of the division of pharmacoepidemiology and pharmacoeconomics at Brigham and Women's Hospital and Harvard Medical School, and lead author of the study. "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 nonadherent 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."

When Congress created the Medicare Part D program in 2003, the standard benefit design included a coverage gap, known widely as the doughnut hole. Under the standard benefit, Medicare Part D enrollees receive financial assistance to pay for drugs until plan and out-of-pocket spending reaches an initial threshold of $2,830 (2010). At that point, the Medicare beneficiary is financially responsible for 100% of medication costs until they have spent more than $4,550 (2010), when the program's financial benefits begin again. The research team said of the 663,850 beneficiaries it tracked in 2006 and 2007, approximately one-third reached the doughnut hole seven months into the fiscal year. Other studies estimate between 11% and 14% of Part D enrollees who do not receive a low-income subsidy reach the doughnut hole each year.

"No doubt, this is a difficult area for policymakers. Taking cost out of the health care system is something everyone is trying to achieve," added Troyen Brennan, EVP and chief medical officer of CVS Caremark, who heads the research initiative that conducted the study. "The Affordable Care Act incrementally eliminates the doughnut 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 healthcare costs."

The Medicare Part D study is a product of a three-year research collaboration between CVS Caremark, Harvard and Brigham and Women's Hospital that is focused on understanding why many consumers do not take their prescriptions as directed, and developing solutions to assist patients in using their medications effectively. Annual excess healthcare costs due to medication nonadherence in the United States are estimated to be as much as $300 billion annually.