Regional Differences in Medicare Drug Spending due to Drug Costs

According to a study led by researchers from the University Of Pittsburgh Graduate School Of Public Health and published in The New England Journal of Medicine, the cost of medications through Medicare’s subsidized prescription drug program differs in various regions across the United States. They state that this is mainly because of more costly brand-name drugs and not due to the amount of drugs prescribed.

The study results, suggest that better use of lower-cost generic medications could reduce drug spending and beneficiary out-of-pocket costs to a great extent without having to compromise on quality of care or health.

The research puts forward that the Medicare Part D benefit design, which endorses cost-sharing and utilization management, may be a significant tool for encouraging the use of generic drugs in the program and saving money, particularly in high-cost regions.
Julie M. Donohue, Ph.D., associate professor of health policy and management and lead author of the study and his team examine 2008 Medicare data for 4.7 million beneficiaries. Apart from studying the overall medication use, they also focused on three drug groups mostly prescribed to the elderly: blood pressure medications, cholesterol-lowering statins and newer antidepressants. The data was then evaluated across hospital referral regions and adjustment were made for demographic, socioeconomic and health status variations.

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