OBJECTIVES: To assess impact of the Medicare Part D coverage gap on prescription drug utilization and medication adherence using data from Medicare beneficiaries enrolled in a large health plan in New Mexico in 2007. METHODS: Quasi-experimental, retrospective, pre-post with control group study design was utilized. Pre- and post-coverage gap prescription drug utilization and medication adherence of beneficiaries enrolled in a health plan with no prescription drug coverage during the coverage gap (no coverage plan) was compared with generic drug coverage (generic coverage plan) and full prescription drug coverage (full coverage plan) plan beneficiaries. Prescription drug utilization was assessed using total number of prescriptions per member. Medication adherence was measured using Medication Possession Ratio and the Proportion of Days Covered (PDC). Difference-in difference analysis (DiD) was used to compare pre- and post-coverage gap prescription drug utilization and medication adherence between the three plans. RESULTS: Of the 14,846 beneficiaries who met inclusion and exclusion criteria, 2,661 (17.92%) entered the coverage gap in 2007. DiD analyses indicated that beneficiaries in the no coverage plan filled significantly fewer prescriptions in the post-coverage gap period, than beneficiaries in the full (14.67 fewer prescriptions; p=0.001) and generic (12.52 fewer prescriptions; p=0.001) coverage plans. Significant decrease in post-coverage gap medication adherence was observed between no coverage and full coverage plan beneficiaries with respect to statins (5.8%), ARBs (16%) and PPIs (18.1%). Significant decrease in post-coverage gap medication adherence was observed between no coverage and generic coverage plan beneficiaries utilizing statins (1.1%) and ARB’s (12%). No significant differences were observed between full and generic coverage plan beneficiaries. Significant differences in adherence were found only when adherence was measured using the PDC. CONCLUSIONS: Lack of prescription drug coverage during the Medicare Part D coverage gap may lead to decreased utilization and adherence to certain classes of prescription drugs.