Effect of tiered prescription copayments on the use of preferred brand medications

Med Care. 2003 Mar;41(3):398-406. doi: 10.1097/01.MLR.0000053022.47132.82.


Background and objective: Health plans are increasingly using more open drug formularies that offer differential prescription copayments as an incentive to enrollees to use brands that plans prefer. How much this financial incentive affects use of preferred brands has not been widely reported. The aim of this study was to estimate the effect of tiered copayments on the choice between preferred and nonpreferred brand medications.

Materials and methods: Longitudinal logistic regression analyses of pharmacy claims from 1998 and 1999 comparing concurrent groups that were or were not exposed to tiered copayments.

Subjects: Enrollees in four independent physician practice association model health plans who had pharmacy claims for angiotensin converting enzyme inhibitors (ACEI), proton pump inhibitors (PPI), or hydroxymethylglutaryl coenzyme A reductase inhibitors (STATINS).

Outcome measure: Change in the percentage of prescription claims that were for preferred brands.

Main results: Regression adjusted estimates of the average net increase in the percentage use of preferred brands of ACEI, PPI and STATIN from first quarter 1998 to third quarter 1999 attributed to tiered prescription copayments were 13.3 (P = 0.001), 8.9 (P = 0.03), and 6.0 (P <0.001) percentage points, respectively.

Conclusions: Tiered prescription copayments were associated with a significant shift from nonpreferred to preferred brand medications. This type of financial incentive can help purchasers providing open access drug benefits by steering use of medications toward lower cost brands. The clinical effects of changes in medication use brought about differential copayments warrant further investigation.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • Aged
  • Angiotensin-Converting Enzyme Inhibitors / classification
  • Angiotensin-Converting Enzyme Inhibitors / economics
  • Cost Sharing*
  • Female
  • Formularies as Topic*
  • Health Services Research
  • Humans
  • Hydroxymethylglutaryl-CoA Reductase Inhibitors / classification
  • Hydroxymethylglutaryl-CoA Reductase Inhibitors / economics
  • Independent Practice Associations / economics*
  • Independent Practice Associations / organization & administration
  • Insurance, Pharmaceutical Services*
  • Longitudinal Studies
  • Male
  • Middle Aged
  • Patient Satisfaction / economics*
  • Prescription Fees
  • Proton Pump Inhibitors
  • Proton Pumps / economics
  • Regression Analysis
  • Therapeutic Equivalency
  • United States


  • Angiotensin-Converting Enzyme Inhibitors
  • Hydroxymethylglutaryl-CoA Reductase Inhibitors
  • Proton Pump Inhibitors
  • Proton Pumps