Medicare Part D spending drops $6 billion in 2008

The increased use of generic drugs is credited with a $6 billion drop in the cost of Medicare prescription drugs (Source: “Medicare drug plan spending drops $6B in 2008,” USA Today, Oct. 30, 2008).

The prescription drug program for seniors has cost about one-third less — about $50 billion — than originally estimated since it started in January 2006.

Beyond a higher use of generics (64 percent of Medicare prescriptions, compared with 61 percent in the private sector), another factor that contributed to the savings were that 2 million fewer participants enrolled in the program than was originally forecast.

Medicare officials also site seniors desire to avoid the so-called “doughnut hole,” a coverage gap in which drug expenses between $2,510 and $4,050 a year are not covered.