In 2022, 43.3 million Medicare Part D enrollees (82 percent) filled 1.1 billion prescriptions for generic prescription drugs. While most enrollees filled at least one prescription for $2 or less, most (54 percent) paid more than $2 for at least one generic drug. Over 6 million enrollees filled at least one prescription for over $20. To address the costs of generic drugs, HHS has outlined plans for the Medicare $2 Drug List (M2DL) Model, which would create a high-value generic drug list that Medicare Part D prescription drug plan sponsors could offer enrollees at a low, fixed copayment ($2 for a month’s supply) without restrictions such as step therapy, prior authorization, or quantity limits.
The purpose of this Issue Brief is to understand the scope of generic drug utilization at baseline and reflect on the potential impact this model could have on making generic drugs more accessible and more affordable to Medicare beneficiaries with Part D coverage. We find that a standardized formulary of high-value generics that cost beneficiaries $2 or less in out-of-pocket spending would reduce confusion and help enrollees afford their prescription drugs.