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Cost Sharing, Adherence, and Health Outcomes in Patients With Diabetes
Teresa B. Gibson, PhD; Xue Song, PhD; Berhanu Alemayehu, DrPH; Sara S. Wang, PhD; Jessica L. Waddell, MPH; Jonathan R. Bouchard, MS, RPh; and Felicia Forma, BSc
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Cost Sharing, Adherence, and Health Outcomes in Patients With Diabetes

Teresa B. Gibson, PhD; Xue Song, PhD; Berhanu Alemayehu, DrPH; Sara S. Wang, PhD; Jessica L. Waddell, MPH; Jonathan R. Bouchard, MS, RPh; and Felicia Forma, BSc

Higher cost-sharing levels reduced adherence to antidiabetic medications in patients with type 2 diabetes.

This key finding is consistent with previous literature regarding the effects of higher cost sharing on antidiabetic medication adherence. Specifically, Chernew and colleagues found that the price elasticity for OAD medications for patients with type 2 diabetes was around −0.05.8 Additionally, Colombi and colleagues measured the effect of the per-user average copayment of all prescription medications on antidiabetic medication adherence and found that patients in the high-copayment group were more likely to have lower levels of  adherence, with a reduction of 14 percentage points in overall adherence between the medium ($10-$19) and high ($20 ) copayment groups.17 Hunt and colleagues found that an  increase in cost sharing by $5 resulted in a decrease of 6% in the odds of being adherent to OAD.9 Differences in the magnitude of previous findings and the findings here point to differences in measuring cost sharing; we used several measures of cost sharing to mitigate selection bias.

To understand the effects of copayments on outcomes, we estimated reduced-form models on the outcomes and found a positive relationship between copayments and most of  the adverse events. Because our system was nonlinear, the association between copayments and outcomes was likely suggestive, but not entirely representative, of the  relationship that we are proposing exists between cost sharing and outcomes. Thus, we interpreted the findings directionally and found that lowering copayments holds promise as  a means to improve health.

There also may be some concern about employers with more generous copayments (lower copayments) having more generous disability policies, so there would be an existing  inverse relationship between copayments and disability days. However, our 2-part results, adjusted for selection bias, show an inverse relationship between copayments and adherence, and another inverse relationship between adherence and disability days. As such, our reported results are in the opposite direction of this concern and may be biased  downward. Although there was insufficient overlap to study net productivity effects, additional research measuring the net productivity gains (absence plus short-term disability) may provide insight into the consequences of inadequate adherence on indirect costs.

The study was based on administrative data; thus, actual antidiabetic medication consumption patterns cannot be ascertained. The adherence measure assumed that filling  behavior was correlated with medication consumption patterns. We do not know the entirety of the prescribed antidiabetic medication regimen, so we could only determine whether  there was at least 1 medication on hand, which is a conservative standard of adherence. 

Given the dosage form of insulin, measures of days supply can have a lower correlation to actual consumption patterns. However, in this study, all patients had type 2 diabetes and  were on OAD, so when insulin was used, it was mostly supplemental to OAD. We present a conservative measure of insulin adherence based on 1.5 times days supply, a multiplier determined empirically by Kleinman and colleagues to correspond with actual use.11 As a comparison, with this measure of insulin days, 74.5% of patients were adherent; when using OAD-only (without insulin) criteria to calculate PDC for the same patients, 68.4% of patients were adherent. We ran sensitivity analyses on the models that excluded insulin days (OAD alone); a second set of sensitivity analyses used the days supply for the insulin claims to calculate PDC and saw no material difference in findings.

Further, we measured adherence in an 18-month time frame and complications and service utilization in the subsequent 2 years. If these time periods were extended, the benefits of adherence might become more pronounced. Patients discontinuing medication use after achieving diabetes management would be classified here as nonadherent. We expect this number to be low, although adherence is generally associated with lower rates of utilization and complications; if these patients were misclassified as nonadherent, these  results would be biased toward zero. We varied the adherence threshold to meet or exceed 90% or 100% and consistently found better outcomes associated with adherence. Thus,  further research should incorporate clinical data, including innformation on side effects, disease severity, and A1C levels, if available, and measure effects over a longer study period.

In addition, some explanatory variables such as race were not available. Our study focused on a sample of patients with employer-sponsored insurance. In patient populations  where the percentage of income spent on healthcare is higher, the effects of cost sharing on adherence may be larger than these results.

Benefit plan documents reveal that fewer than 10% of plans applied out-of-pocket maximums to prescription drug copayments. In the event that these maximums applied to prescription drug copayments and patients with high spending in these plans were assessed a zero copayment after some point in the year, patients who were assigned to a  higher copayment level in our study would actually have lower copayments and would be more likely to become adherent. We believe that this phenomenon biases our reported  first-stage results downward.

In the adherence models, if more adherent patients selected plans with lower prescription drug cost-sharing levels, then the cost-sharing effects on adherence presented here  would be biased upward. In the complication and utilization models, patients with more advanced disease may be less adherent to medications, which would bias the adherence  effects upward. However, use of the 2-stage residual inclusion model mitigates selection concerns. There was no evidence of unobservable confounding (via a nonsignificant  coefficient on the residual term) in approximately half of the models; in the other half, the inclusion of the residual term aided in reducing these effects, producing consistent  estimates. As stated above, all instruments were statistically significant in the first-part models; however, as of this writing, we know of no existing overidentification test for a 2-stage residual inclusion model. We posit the relationship of the instruments to the endogenous variables, but were unable to test this relationship directly.


The results indicate that higher antidiabetic medication cost sharing is associated with lower adherence; and adherence to antidiabetic medications generally results in lower rates of complications, short-term disability, ED visits, and hospitalizations among patients with type 2 diabetes. Financial incentives to improve adherence, such as lower levels of cost sharing, may translate to better patient outcomes and lower employer costs resulting from increased productivity and decreased healthcare utilization. Medical plans, employers, and policy makers should consider implementation of interventions targeted to improve and maintain high levels of adherence to improve indirect and direct measures of health and well-being.

Author Affiliations: From Thomson Reuters Healthcare (TBG, XS, SSW, JLW), Ann Arbor, MI; AstraZeneca (BA), Wilmington, DE; Novo Nordisk (JRB), Princeton, NJ; and sanofi-aventis (FF), Bridgewater, NJ.


Funding Source: Funding for this study was provided by Novo Nordisk.


Author Disclosures: Dr Gibson is an employee of Thomson Reuters Healthcare, which has a consulting agreement with the funding organization, Novo Nordisk. Ms Forma is an employee of sanofi-aventis, a manufacturer of antidiabetic medications. The other authors (XS, BA, SSW, JLW, JRB) report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.


Authorship Information: Concept and design (TBG, XS, SSW, JRB, FF); acquisition of data (TBG, JRB, FF); analysis and interpretation of data (TBG,XS, SSW, JLW, JRB, FF); drafting of the manuscript (TBG, JLW, FF); critical revision of the manuscript for important intellectual content (TBG, XS, JRB,FF); statistical analysis (TBG); provision of study materials or patients (TBG);obtaining funding (TBG, XS, SSW, FF); administrative, technical, or logistic support (JLW, JRB); and supervision (TBG, JRB, FF).


Address correspondence to: Teresa B. Gibson, PhD, Thomson Reuters Healthcare, 777 E Eisenhower Pkwy, Ann Arbor, MI 48108. E-mail:

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