OBJECTIVES: Few studies have examined the effects of the Medicare Part D coverage gap on medication behaviors for diabetic patients. Diabetes accounts for 32% of the Medicare expenditure and 20% of the Medicare beneficiaries suffer from diabetes. The current study examined how entering the coverage gap in 2007 affected medication adherence rates, medication consumption behavior and resource utilization among Medicare Part D beneficiaries taking oral anti-diabetic medications with different levels of cost-sharing.  METHODS: The study used a longitudinal, retrospective pre-post cohort design with a 5% national random sample of Medicare enrollees. Beneficiaries on oral anti-diabetic medications entering the coverage gap (n=78,224) were identified using prescription drug records. Health resource utilization measures were derived from inpatient, outpatient and carrier claims for these beneficiaries. Adherence was measured as proportion of days covered (PDC). RESULTS: A total of 60.1 % of the beneficiaries entered the coverage gap and 20.3% reached catastrophic coverage. The number of patients who discontinued medications after entering the gap was associated with level of cost sharing (31.1 % (full copayment), 20-27% (partial copayment), 14.0% (no copayment), p <0.0001).  2.0 % of the beneficiaries switched medications after entering the coverage gap. However no association of switching medications with cost sharing was observed.  When examining beneficiaries entering the gap but not reaching catastrophic coverage, level of cost sharing was strongly associated with a drop in PDC ( (5.9% decrease (no copayment), ~17% decrease (partial copayment), 20.3% decrease (full copayment), p <0.0001).   CONCLUSIONS: Increased cost sharing after entering the coverage gap was associated with negative changes in medication consumption behaviors (adherence and continuation) among patients on oral anti-diabetic medications. The findings demonstrate the importance of efforts to fill the coverage gap in the Medicare Part D program in order to ensure more appropriate medication use behaviors, especially for beneficiaries with partial/full cost sharing.