Impact of Copays in Vulnerable Populations

Published Online: November 01, 2006

Although prescription drug spending growth has slowed in recent years, increasing just 8.2% in 2004, double-digit increases over the past 10 years have led many private health insurance plans to substantially increase prescription drug cost sharing.1 Between 2001 and 2005, mean copays for generic drugs increased 43%, from $7 to $10; copays for preferred brand-name drugs rose 69%, from $13 to $22, whereas those for nonpreferred branded drugs rose 106%, from $17 to $35. In 2005, 89% of employees with insurance had some cost-sharing formula for prescription drugs, with 74% in plans with 3- or 4-tiered benefits.2

As a result, the Center for Studying Health System Change reports that more Americans, particularly those with chronic conditions, are going without necessary prescription drugs because of cost issues.3 Additionally, a Kaiser Family Foundation survey found that 37% of those without insurance reported that they did not fill a prescription because of cost compared with 13% of those with insurance.4

The rationale for increased cost sharing of drugs with patients is to deter the use of drug therapies that do little to improve health or to pay for the higher costs of drugs individuals choose to take.5 This rests on the assumption that individuals have the capacity to pay for essential drugs; will make rational, informed choices; and will prudently evaluate long-term consequences versus short-term costs.5 This is not always the case, particularly among vulnerable populations (eg, the economically challenged, ethnic minorities, and the uninsured).5

Impact of Copays on Vulnerable Populations
Data attesting to the impact that even a small increase in copays can have on vulnerable populations' abilities to fill prescription drugs are significant, and show that cost affects both utilization and patient health. For example, Goldman et al retrospectively reviewed pharmacy claims from 1997 to 2000 from 30 employers and 52 health plans, linking claims with health plan benefit designs. Researchers found that doubling copay amounts led to a reduction in the use of drugs in 8 therapeutic classes, with the largest decreases occurring in nonsteroidal anti-inflammatories (45%) and antihistamines (44%); decreases found for other drug classes included cholesterol-lowering medications (34%), antiulcerants (33%), asthma medications (32%), antihypertensives (26%), antidepressants (26%), and diabetes medications (25%).6

Although they found a reduction in drug use in patients with diagnosed chronic disorders, that reduction seemed to come at the expense of other medications. For example, overall use of antidepressants decreased 26%, but by only 8% among those diagnosed with depression. Yet, the use of all other medications among those with depression decreased 25%. One possible explanation, the authors note, is that these patients used cost savings from other prescriptions to offset higher copays for antidepressants. The study authors also found evidence of increased emergency department (ED) visits and longer inpatient stays for patients with diabetes, asthma, and gastric acid disorder with higher copays. Although the results from this study are valid, it is important to note that the study used predictive modeling to examine the impact of higher copays on medical service utilization. So these are modeled effects.6

Cost sharing has an effect on vulnerable populations, even in countries with national health insurance. In 1996, the Canadian province of Quebec legislated prescription drug insurance for all residents, implementing a deductible and a 25% coinsurance charge for the poor and elderly who had been receiving free medications. At the time, these populations used at least twice as many essential drugs (those necessary to maintain or improve health) as less essential drugs.7

Once the poor and elderly had to pay a share of their drug costs, however, their total number of drugs used on a daily basis decreased by 9.14% and 15.94%, respectively, with similar reductions for essential drugs. At the same time, the rate of adverse events in the elderly who reduced essential drug use increased from 5.8 to 12.6 events per 10 000 person-months, a net increase of 6.8 adverse events. There was also a significant increase of 12.9 (from 14.7 to 27.6) in adverse events in those patients who received welfare. The rate of ED visits related to patient reduction of the use of essential drugs also increased by 14.2 events per 10 000 person-months in the elderly and by 54.2 among patients receiving welfare.7

In an observational study of an intervention group of 20 326 children and a comparison group of 15 776 children aged 18 years or younger with attention-deficit/hyperactivity disorder (ADHD), Huskamp et al found that implementing a 3-tier formulary led to a 17% reduction in the monthly probability of medication use and a 20% decrease in expected total medication expenditures. There was also substantial cost shifting of copays from the health plan to the families. Children in the intervention group who were previously taking medications were more likely to take a drug in a different tier after switching to the 3-tier formulary than the comparison group. Increased copays associated with switching to the 3-tier formulary in this example resulted in lower total ADHD medication spending, a significant decrease in the probability of using these medications, and increases in out-of-pocket costs for families of children with ADHD.8

Roblin et al compared 12-month data on 13 110 episodes of oral antidiabetic drug use for members of 5 managed care organizations that increased cost sharing with data on 13 110 such episodes from a comparison group that did not experience a cost increase. They found that members with more than a $10 cost-sharing increase filled 18.5% fewer oral hypoglycemic drug prescriptions (as measured by average daily dose of medication) 6 months after the copay increase.9

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Issue: Prescription Drug Copays and Their Effect on Vulnerable Populations
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