Sources of Regional Variation in Medicare Part D Drug Spending

New England Journal of Medicine: February 9, 2012: Julie M. Donohue, Ph.D., Nancy E. Morden, M.D., M.P.H., Walid F. Gellad, M.D., M.P.H., Julie P. Bynum, M.D., M.P.H., Weiping Zhou, Ph.D., Joseph T. Hanlon, Pharm.D., and Jonathan Skinner, Ph.D. N Engl J Med 2012; 366:530-538.


Sources of regional variation in spending for prescription drugs under Medicare Part D are poorly understood, and such variation may reflect differences in health status, use of effective treatments, or selection of branded drugs over lower-cost generics.

Full Text of Background…


We analyzed 2008 Medicare data for 4.7 million beneficiaries for prescription-drug use and expenditures overall and in three drug categories: angiotensin-converting–enzyme (ACE) inhibitors and angiotensin-receptor blockers (ARBs), 3-hydroxy-3-methylglutaryl coenzyme A (HMG-CoA) reductase inhibitors (statins), and selective serotonin-reuptake inhibitors (SSRIs) and serotonin–norepinephrine reuptake inhibitors (SNRIs). Differences in per capita expenditures across hospital-referral regions (HRRs) were decomposed into annual prescription volume and cost per prescription. The ratio of prescriptions filled as branded drugs to all prescriptions filled was calculated. We adjusted all measures for demographic, socioeconomic, and health-status differences.

Full Text of Methods…


Mean adjusted per capita pharmaceutical spending ranged from $2,413 in the lowest to $3,008 in the highest quintile of HRRs. Read Full article