Impact of Medicare Part D on Generic Prescription Rate in the Long Term Care Facilities

Date of Original Version



Working Paper

Abstract or Description

On January 1, 2006, Medicare initiated the biggest change in its history by implementing the Part D Prescription Drug Plan, the first stand-alone drug coverage for Medicare beneficiaries, in an attempt to provide access to prescription drugs for seniors and people with disabilities. Studies show that Part D lowered the soaring cost of prescription drugs dispensed to seniors, partly through conversion to generic drugs. Due to their unique characteristics: polypharmacy, homogeneous age structure, and high prevalence of chronic diseases, there are few studies of the impact of this program on long-term care residents in terms of generic drug utilization, despite being its heaviest users of prescription medications. In this study, we examine whether Part-D program has any impact on the generic drug prescription rate among residents in Long Term Care Facilities (LTCF). We analyze prescription orders associated with three different therapeutic classes in order to induce a general pattern: AA (Atypical Antipsychotic), PPI (Proton Pump Inhibitor), and Statin. We use data from a regional online pharmacy serving over 150 long-term care facilities in Pennsylvania and neighboring states. Difference in difference estimates are used to explore the change in generic prescription rate of the three medication classes in LTCF. Contrary to our expectation, impact of Part D program on the generic prescription rate is not found in this particular study setting. The complex dynamics of prescription drug market, particularly the availability of generic versions of popular prescription medications, may have a bigger role in the utilization of generic drugs.