Medicare beneficiaries' out-of-pocket costs for commonly used generic drugs, 2009-2017

Patrick Liu, Sanket S. Dhruva, Nilay D. Shah, Joseph S. Ross

Research output: Contribution to journalArticlepeer-review


Objectives: To examine differences in the out-of-pocket costs for common generic drugs used to treat chronic conditions when individuals used their Medicare prescription drug plan (PDP) or when purchased through Walmart's generic drug discount programs (GDDPs) from 2009 to 2017. Study Design: A retrospective analysis of Medicare PDP Formulary files and Walmart's GDDP retail drug lists from 2009 to 2017. Methods: We identified all generic drugs used to treat chronic conditions that were on Walmart's GDDP retail drug list from 2009 to 2017. We then determined the out-of-pocket costs for each drug for each Medicare PDP and compared those costs with Walmart's GDDP cash price. Results: There were 62 and 43 generic medications used to treat common chronic diseases available through Walmart's GDDP in 2009 and 2017, respectively. Across all PDPs, the median beneficiary out-of-pocket expenditure for a 30-day supply of the GDDP-available medications for chronic diseases decreased from $5.70 (interquartile range [IQR], $2.55-$7.98) in 2009 to $2.00 (IQR, $0.00-$4.00) in 2017 (P <.001) Approximately three-fifths (60.2%) of PDPs required beneficiaries to pay out-of-pocket costs higher than those of Walmart's GDDP in 2009, but only one-third (33.4%) did so in 2017. Conclusions: Although Medicare beneficiary out-ofpocket costs for commonly used generic drug prescriptions generally decreased over time, Medicare beneficiaries may still be paying more for the same drugs than they would through Walmart's GDDP. Increased generic drug price transparency, including enforcing bans on gag clauses, is needed to ensure that Medicare beneficiaries obtain drugs using the most affordable options.

Original languageEnglish (US)
Pages (from-to)112-117
Number of pages6
JournalAmerican Journal of Managed Care
Issue number3
StatePublished - 2020

ASJC Scopus subject areas

  • Health Policy


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