Using the 2016 Medicare part D coverage gap as an example, we explored effects of increased out-of-pocket costs on adherence to branded dipeptidyl peptidase 4 inhibitors (DPP-4i) in patients without financial subsidies relative to subsidized patients who do not experience increased spending during the gap. We also explored seasonality of reinitiation, because discontinuers may be more likely to reinitiate in January when benefits reset.We identified DPP-4i or sulfonylurea initiators, aged ≥66 years, from a 20% sample of 2015-2016 Medicare claims. Difference-in-differences Poisson regression was used to compare adherence before and after entering the coverage gap between nonsubsidized and subsidized patients. Among discontinuers, monthly hazard ratios (HRs) for reinitiation relative to January 2016 were derived with Cox models. As a second control, we repeated analyses using sulfonylureas, generic low-cost alternatives.In 2016, 8,096 subsidized and 6,173 nonsubsidized DPP-4i initiators entered the coverage gap. For nonsubsidized patients, copayment in the coverage gap was 45% ($227 per DPP-4i prescription), and adherence decreased from 68.4 to 49.0% after gap entry. Accounting for adherence differences in subsidized patients, nonsubsidized patients demonstrated reduced adherence to DPP-4i (difference-in-difference: -16.9%; CI -18.7%, -15.1%) but not sulfonylureas (-1.6%; 95% CI -3.4%, 0.2%). Reinitiation was lowest in the months before January (HR 0.4-0.5) among nonsubsidized DPP-4i patients, demonstrating a strong seasonal pattern.Increased out-of-pocket costs negatively affect adherence and reinitiation of branded antihyperglycemic drugs among patients without financial subsidies. Despite closure of the coverage gap, affordability remains a concern given increasing list prices for many drugs on Medicare and the growing use of deductibles and coinsurance by commercial health plans.