Health Affairs Article: Medicare Part D Plans Rarely Cover Brand-Name Drugs When Generics Are Available

Policy Watch

In 2019, an estimated forty-five million Medicare beneficiaries enrolled in one of the program’s Part D prescription drug plans. Recent news reports and other evidence suggest that Medicare Part D plans may be encouraging the use of brand-name drugs instead of generics.
In an article in Health Affairs, KFF’s Juliette Cubanski, Sarah True and Tricia Neuman, and several other co-authors, explore how often brand-name drugs receive favorable formulary inclusion relative to generics by studying Medicare Part D formularies between  2012-19 for all Part D stand-alone prescription plans and Medicare Advantage prescription drug plans.  They find that generic-only coverage has increased over time – 84 percent of all product-plan combinations covered the generic and excluded the brand name drug in 2019, an increase from 69 percent in 2012. Brand-only coverage was rare, occurring for less than 1 percent of all plan-product combinations in 2019.
They also found that, among the formularies that covered both brands and generics in 2019, generics were on the same cost-sharing tier or on a lower tier than brands in 99 percent of observations. According to the authors, most Part D plan formularies are designed to encourage the use of generics rather than their brand name counterparts.  They recommend that policy makers continue to monitor Part D formulary coverage patterns to ensure consistent and generous coverage for generic drugs.

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