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Research Letter
April 2018

Medicare Spending and Potential Savings on Brand-Name Drugs With Available Generic Substitutes Excluded by 2 Large Pharmacy Benefit Managers, 2012 Through 2015

Author Affiliations
  • 1Collaboration for Research Integrity and Transparency, Yale University, New Haven, Connecticut
  • 2Section of General Internal Medicine, Yale School of Medicine, New Haven, Connecticut
  • 3Robert Wood Johnson Foundation Clinical Scholars Program, Veterans Affairs Connecticut Healthcare System, New Haven
JAMA Intern Med. 2018;178(4):567-569. doi:10.1001/jamainternmed.2017.8016

The Centers for Medicare and Medicaid Services (CMS) Part D program provided prescription drug coverage to 40.8 million beneficiaries in 2016.1 Between 2012 and 2015, the program spent $397.8 billion on prescription drugs, while beneficiary out-of-pocket costs totaled $54.6 billion.2 Over the next decade, spending is projected to increase by 77%.3 Several large pharmacy benefit managers (PBMs) have attempted to limit prescription drug costs by using formulary drug exclusion lists, but the extent to which these apply to Medicare Part D plans is unknown. These lists identify brand-name medications that are ineligible for coverage and specify either covered brand-name and/or lower-cost, generic substitutes. We estimated potential Part D program and beneficiary savings on medications excluded by PBMs for which generic substitutes are available.