OBJECTIVE: The Medicare Modernization Act of 2003 requires drug plan sponsors to provide medication therapy management (MTM) programs to beneficiaries with 1)annual drug expenditures above $4000; 2)multiple comorbidities; and 3)multiple prescription drugs. The purpose of this study was to obtain nationally representative estimates of the proportion of seniors who met the expenditure criteria and identify risk factors for high annual drug expenditures. METHODS: Prescribed medicines and demographic data came from the 2002 and 2003 Medical Expenditure Panel Survey (MEPS) for respondents ≥65 years of age. Survey-weighted logistic regression identified risk factors for high drug expenditures. Candidate variables included age, gender, race, income, education, marital status, functional limitations, health status, presence of chronic conditions, body mass index (BMI), and medical and prescription drug insurance. Standard errors (SEs) were adjusted for complex survey design and expenditures were adjusted to 2003 U.S. dollars. Annual expenses of $3810 in 2003 were deemed equivalent to $4000 in 2005. RESULTS: An estimated 9.2% (SE±0.4%) of 36 million seniors over 2002 and 2003 incurred more than $3810 annual drug expenditures, accounting for 35% of $55.3 billion in drug expenditures among all seniors. Respondents with high drug expenditures reported 10.8 (±0.2) unique medications with 77.9% (±1.9%) reporting ≥8 medications; all had ≥3 medications. These respondents also had 5.2 (±0.1) chronic conditions; 60.5% (±2.3%) had ≥4 conditions. Diabetes, hyperlipidemia, depression, and cardiac disease significantly increased the risk of high drug expenditures. Other significant risk factors included receiving help with activities of daily living (ADLs), housework limitations, high BMI, fair/poor health, and total number of chronic diseases. CONCLUSION: Respondents with drug expenditures exceeding the MTM threshold obtain significantly more drugs and have a higher disease burden than those with lower drug expenditures. Characteristics other than the number and type of medications can be used to identify candidates for MTM programs.