Out-of-Pocket Costs Declined for Generic Drugs Available Through Discount Programs


Medicare beneficiary out-of-pocket costs for generic drugs used to treat chronic conditions declined from 2009 to 2017.

Drug Costs

Medicare beneficiary out-of-pocket costs for common generic drugs that treat chronic conditions declined from 2009 to 2017 through Walmart’s generic drug discount programs (GDDPs), according to a study published in The American Journal of Managed Care.

GDDPs can improve the affordability of generic medications, especially for patients without pharmaceutical coverage. The retrospective analysis looked at Medicare PDP Formulary files and Walmart’s GDDP retail drug lists from 2009 to 2017 to determine trends in out-of-pocket costs required by Medicare prescription drug plans compared with the drugs’ cash price.

Overall, the study showed that there were 62 and 43 generic medications used to treat common chronic diseases available through Walmart’s GDDP in 2009 and 2017, respectively. Based on the findings, 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, or 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, according to the study. 

Additionally, the analysis also showed that in 2009, there were no significant differences among the proportions of plans requiring co-payments greater than the GDDP cash price by therapeutic class, whereas in 2017, there were more significant differences by therapeutic class (20.6%, 52.7%, and 28.3% for cardiovascular, mental health, and endocrine classes, respectively).

“Nevertheless, median beneficiary out-of-pocket costs and the proportion of plans requiring co-payments greater than the GDDP cash price decreased for all plan type and tier stratifications,” the study authors wrote.

According to the authors, the availability of cheaper medications through GDDPs may have led to these lower out-of-pocket costs for beneficiaries. The authors noted that, despite this progress, it is still necessary to identify further opportunities to lower costs, especially given concerns about the ability of older patients to afford their medications and the number of beneficiaries taking GDDP-available medications.

“A multimodel solution is needed to help patients navigate the complexities of prescripton drug coverage, reduce total medication costs, increase medication adherence, and promote better health outcomes among Medicare beneficiaries, thereby fulfilling the mission of the Part D benefit,” the authors concluded.


Liu P, Dhruva SS, Shah ND, Ross JS. Medicare Beneficiaries Out-of-Pocket Costs for Commonly Used Generic Drugs, 2009-2017. The American Journal of Managed Care. 2020. https://www.ajmc.com/journals/issue/2020/2020-vol26-n3/medicare-beneficiaries-outofpocket-costs-for-commonly-used-generic-drugs-20092017?p=1

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