Cost sharing and the initiation of drug therapy for the chronically ill

Abstract

Background: Increased cost sharing reduces utilization of prescription drugs, but little evidence demonstrates how this reduction occurs or the factors associated with price sensitivity.

Methods: We conducted a retrospective cohort study of older adults with employer-provided drug coverage from 1997 to 2002 from 31 different health plans. We measured the time until initiation of medical therapy for 17 183 patients with newly diagnosed hypertension, diabetes, or hypercholesterolemia.

Results: For all study conditions, higher copayments were associated with delayed initiation of therapy. In survival models, doubling copayments resulted in large reductions in the predicted proportion of patients initiating pharmacotherapy at 1 and 5 years after diagnosis: for hypertension, 54.8% vs 39.9% at 1 year and 81.6% vs 66.2% at 5 years (P < .001); for hypercholesterolemia, 40.2% vs 31.1% at 1 year and 64.3% vs 53.8% at 5 years (P < .002); and for diabetes, 45.8% vs 40.0% at 1 year and 69.3% vs 62.9% at 5 years (P < .04). However, patients' rate of initiation and sensitivity to copayments strongly depended on their prior experience with prescription drugs. Those without prior drug use (26.1%, 10.4%, and 12.9%) initiated later (833, >1170, and >1402 days later in median time until initiation) and were far more price sensitive (increase of 34.5%, 20.1%, and 27.2% remaining untreated after 5 years when copayments doubled) than those with a history of drug use among patients with newly diagnosed hypertension, hypercholesterolemia, and diabetes, respectively. These results were robust to a wide range of sensitivity analyses.

Conclusions: High cost sharing delays the initiation of drug therapy for patients newly diagnosed with chronic disease. This effect is greater among patients who lack experience with prescription drugs. Policy makers and physicians should consider the effects of benefits design on patient behavior to encourage the adoption of necessary care.

Figure 1. Unadjusted Kaplan-Meier Estimates of Time Until First Medication for Patients with Newly Diagnosed Chronic Disease, Above and Below Median Copay Levels 1997–2002*

*Note: “Below median” includes patients in plans below the median OOP index value; “Above median” includes patients in plans above the median OOP index value.

Figure 2. Effect of Doubling Copayments on the Initiation of Drug Therapy for Patients with Newly Diagnosed Chronic Disease*

*Note: An OOP index level of 205 roughly corresponded to a 1-tier $5-$5-$5 / $10-$10-$10 retail / mail-order copayment plan (actual OOP index value = 206.7), and an OOP index value of 410 roughly corresponded to a 3-tier $5-$15-$20 / $10-$20-$30 retail / mail-order copayment plan (actual OOP index value = 425.7). Both values were well within the range of OOP index values observed in the sample.

Figure 3. Effect of Doubling Copayments on the Initiation of Drug Therapy for Patients with Newly Diagnosed Chronic Disease With and Without Prior Drug Use*

*Note: An OOP index level of 205 roughly corresponded to a 1-tier $5-$5-$5 / $10-$10-$10 retail / mail-order copayment plan (actual OOP index value = 206.7), and an OOP index value of 410 roughly corresponded to a 3-tier $5-$15-$20 / $10-$20-$30 retail / mail-order copayment plan (actual OOP index value = 425.7). Both values were well within the range of OOP index values observed in the sample.