CVS Caremark, Harvard and Brigham and Women's Researchers Say Medicare 'Donut Hole' Can Lead to a Decrease in Medication Adherence

WOONSOCKET, R.I., Aug. 16, 2011 /PRNewswire/ -- Medicare Part D beneficiaries who enter the "donut hole," where they have to pay 100 percent of previously subsidized prescription costs, are twice as likely to discontinue  their medications as they are to switch to more affordable or generic medications, a new study published today in PLoS Medicine concludes.

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The study conducted by researchers from Harvard University, Brigham and Women's Hospital and CVS Caremark (NYSE: CVS) examined prescription drug use among more than 660,000 Medicare beneficiaries enrolled in more than 200 Medicare Part D and retiree drug plans in 2006 and 2007. The researchers said: "The adverse clinical consequences of stopping or reducing adherence to essential medications can be both severe and costly. Our results indicate that beneficiaries faced with increased out-of-pocket cost burdens during the Part D coverage gap are twice as likely to discontinue their medications altogether, resulting in reduced medication adherence, rather than switch to more affordable or generic medications."

"Proponents of the donut hole argue the coverage gap benefits the health care system by making participants more sensitive to medication costs. There is an expectation that people will seek less expensive drug options when they enter the donut hole and that action will result in cost savings both for them and for their health plans," said Jennifer M. Polinski, ScD, MPH, of the Division of Pharmacoepidemiology and Pharmacoeconomics at Brigham and Women's Hospital and Harvard Medical School, and lead author of the study. "However, our findings show that when beneficiaries have to bear the full financial burden of the cost of their medications, they are twice as likely to stop taking their medications altogether and become non-adherent than they are to switch to more affordable or generic drugs.  The resulting decrease in medication adherence could ultimately result in higher medical costs as a result of adverse health events."

When Congress created the Medicare Part D program in 2003, the standard benefit design included a coverage gap, known widely as the donut hole. Under the standard benefit, Medicare Part D enrollees receive financial assistance to pay for drugs until plan and out-of-pocket spending reaches an initial threshold of $2,830 (2010). At that point, the Medicare beneficiary is financially responsible for 100 percent of medication costs until they have spent more than $4,550 (2010), when the program's financial benefits begin again. The research team said of the 663,850 beneficiaries it tracked in 2006 and 2007, approximately one-third reached the donut hole seven months into the fiscal year. Other studies estimate between 11 and 14 percent of Part D enrollees who do not receive a low-income subsidy reach the donut hole each year.

"No doubt, this is a difficult area for policymakers. Taking cost out of the health care system is something everyone is trying to achieve," said Troyen A. Brennan, MD, MPH, executive vice president and chief medical officer of CVS Caremark, who heads the research initiative that conducted the study. "The Affordable Care Act incrementally eliminates the donut hole by 2020, but until that time program beneficiaries remain at risk of decreased drug utilization because of high out-of-pocket drug costs. A strategy that promotes the use of low cost medications and that keeps people adherent would result in better health outcomes and overall reduced health care costs. "

The Medicare Part D study published today is a product of a three-year research collaboration between CVS Caremark, Harvard and Brigham and Women's Hospital that is focused on understanding why many consumers do not take their prescriptions as directed, and developing solutions to assist patients in using their medications effectively.  Annual excess health care costs due to medication non-adherence in the U.S. are estimated to be as much as $300 billion annually.

About CVS Caremark

CVS Caremark is the largest pharmacy health care provider in the United States with integrated offerings across the entire spectrum of pharmacy care. We are uniquely positioned to engage plan members in behaviors that improve their health and to lower overall health care costs for health plans, plan sponsors and their members. CVS Caremark is a market leader in mail order pharmacy, retail pharmacy, specialty pharmacy, and retail clinics, and is a leading provider of Medicare Part D Prescription Drug Plans. As one of the country's largest pharmacy benefits managers (PBMs), we provide access to a network of approximately 65,000 pharmacies, including more than 7,200 CVS/pharmacy® stores that provide unparalleled service and capabilities. Our clinical offerings include our signature Pharmacy Advisor™ program as well as innovative generic step therapy and genetic benefit management programs that promote more cost effective and healthier behaviors and improve health care outcomes. General information about CVS Caremark is available through the Company's website at http://info.cvscaremark.com/.

Media Contact:
Jon Sandberg
CVS Caremark
(401)770 4914
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SOURCE CVS Caremark