OBJECTIVES To examine the effects of the Medicare Part D doughnut hole on patients who require treatment with high-cost medications. METHODS Using 2007 pharmacy claims from Medco Health Solutions, Inc., we used logistic regression analysis to examine the likelihood that patients' spending reached the doughnut hole ($2400) or catastrophic coverage ($5451), or total drug spending equivalents, for beneficiaries (enrolled for at least 6 months) with claims for cancer (N=32,625), osteoporosis (N=331,337), or rheumatoid arthritis (RA; N=5,712) medications. A comparison group with other chronic conditions (N=368,784) was matched to the study population by age, gender, geography, chronic disease score, and low-income subsidy (LIS) eligibility. Explanatory variables included plan type, coverage gap exposure, disease type, and demographic characteristics. RESULTS Compared to patients with other chronic conditions (55%), patients with cancer (79%), RA (92%), or osteoporosis (58%) had higher odds of reaching the doughnut hole compared to patients with other chronic conditions (Odds Ratios [OR] = 19.3, 32.1, and 2.1, respectively, p<0.01 for all). A similar pattern of increased odds was observed for reaching catastrophic coverage (OR cancer = 5.2, RA = 34.5, osteoporosis = 1.4, p<0.01). Compared with standard prescription drug plan (PDP) enrollees, enhanced PDP enrollees were more (OR=1.1, p<0.01), Medicare Advantage enrollees were less (OR=0.8, p<0.01), and Retiree Drug Subsidy beneficiaries were as likely (OR=0.99, p=0.88) to reach the doughnut hole. Relative to enrollees without a coverage gap, beneficiaries with one were less likely to reach $2400 in spending (OR = 0.87, p <0.01); but were more likely to reach catastrophic coverage (OR = 3.0, p<0.01). CONCLUSIONS Regardless of drug plan, the vast majority of Medicare beneficiaries in this study with cancer and RA, and most beneficiaries with osteoporosis faced large out of pocket drug costs. For beneficiaries with these conditions, available prescription coverage may not provide adequate protection from severe financial strain.