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Publication Briefs

Medicare Drug Beneficiaries with Diabetes Use 2 to 3 Times More Brand-Name Drugs than VA Patients, at Substantial Cost

Medicare Part D provides drug coverage to nearly 30 million beneficiaries and contracts with more than 1,000 private plans to administer drug benefits, each using a distinct formulary and cost-sharing arrangement. VA drug benefits are managed by a central pharmacy benefits manager (PBM) with a single formulary, which has substantially lowered pharmacy spending while maintaining high quality care. This study compared the use of brand-name medications among patients using Medicare or VA drug benefits, and estimated how spending would change if the use of brand-name drugs in one system mirrored the other. Using Medicare and VA data from 2008, investigators identified a national sample of 1,061,095 Part D beneficiaries and 510,485 Veterans age 65 and older with diabetes. Investigators focused on prescription use for four medication groups commonly used for diabetes: 1) oral hypoglycemics, 2) long-acting insulins (analogues), 3) statins, and 4) ACE inhibitors/ARBs.


  • Medicare beneficiaries with diabetes are more than twice as likely to use brand-name drugs than a comparable group within VA: 35% vs. 13% for oral hypoglycemics, 51% vs. 18% for statins, 43% vs. 21% for ACEs/ARBs, and 75% vs. 27% for insulin analogues.
  • If brand use in Medicare matched that in VA for these four medication groups, investigators estimated more than $1 billion in avoidable spending by Medicare on brand-name drugs in 2008 alone. Conversely, spending in VA would have increased by 57% for these drugs if Veterans used brand-name drugs at the same rate as in Medicare.
  • Substantial regional variation exists in brand-name use in both Medicare and VA. For each drug group, however, the highest-using VA regions still had lower rates of brand use than the lowest using Medicare regions.


  • There may be unmeasured differences in the patient populations that were compared, although it is unlikely they would explain the substantial differences in brand use found.
  • Investigators could not estimate the effect of discount pharmacies offering $4 generics; in both VA and Medicare, some patients could purchase $4 generics without generating an insurance claim.
  • Potential savings could be over-estimated because some brand-name drugs have lost patent protection since 2008; however, similar patterns of brand use likely exist among other drug groups.


  • Medicare Part D could substantially reduce program costs by lowering brand-name drug use to match VA (where quality of care is equal to, or better, than in Medicare). Conversely, program costs would increase dramatically in VA if brand-name use were more similar to Medicare.

Dr. Gellad was supported by an HSR&D Career Development Award; he and Drs. Zhao, Mor, Thorpe, Good, and Fine are part of HSR&D's Center for Health Equity Research and Promotion, Pittsburgh, PA.

PubMed Logo Gellad WF, Donohue JM, Zhao X, et al. Brand-Name Prescription Drug Use among Diabetes Patients in the VA and Medicare Part D: A National Comparison. Annals of Internal Medicine June 11, 2013;e-pub ahead of print.

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What are HSR Publication Briefs?

HSR requires notification by HSR-funded investigators about all articles accepted for publication. These journal articles are reviewed by HSR and publication briefs or summaries are written for a select number of articles that are then forwarded to VHA Central Office leadership to keep them informed about important findings or information. Articles to be summarized are selected by HSR based on timeliness of the findings, interest of leadership, or potential impact on the organization. Publication briefs are written for only a small number of HSR published articles. Visit the HSR citations database for a complete listing of HSR articles and presentations.

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