December 11, 2006

Generics could see wider use in Medicare Part D next year, as many of the new drug plans participating in the program substitute generics for their brand equivalents, according to a new side-by-side examination of the 2006 and 2007 programs by the Kaiser Family Foundation.

Researchers said the number of drug plan participants is expected to increase by 30 percent to approximately 1,875 in 2007. Unlike most plans in 2006, a number of benefit plans in 2007 are expected to provide Medicare beneficiaries with gap coverage to fill the so-called "doughnut hole" using generic drugs only. This gap occurs once beneficiaries' prescription drug costs have reached $2,250 and they become responsible for 100 percent of the costs. Part D coverage kicks back in after they have spent a total of $3,600 in out-of-pocket expenses.

Roughly 27 percent of plans provide gap coverage using generic drugs exclusively. One percent of plans provide coverage using both generic and brand drugs. Still the majority of plans, about 71 percent, are not expected to offer any gap coverage, the report said.

Brand drugs that lost patent protection, such as Zocor and Zoloft, also drove drug plans to adjust their formularies, according to Kaiser.

The report can be seen at www.kff.org/medicare/7589.cfm (http://www.kff.org/medicare/7589.cfm).