As Prescription Drug Copayments Rise, Total Spending Falls, Study Finds

When health plans raise prescription drug copayments, overall spending on drugs falls because U.S. workers either switch to generics or do not fill some prescriptions, according to a study published in today's issue of the Journal of the American Medical Association, the Washington Post reports. For the study, funded by the California HealthCare Foundation, researchers at Rand analyzed the health coverage of 421,000 workers employed by 25 large private companies from 1997 to 1999. The study found that increasing copays for prescription drugs -- often implemented as part of tiered drug plans -- led some employees to buy generic drugs instead of brand-name medications, while others switched to over-the-counter treatments. When health plans increased copays from $5 to $10, workers spent 22% less on prescription drugs, the study determined (Brubaker, Washington Post, 10/9). The study did not address whether workers' health was impacted by their decision not to purchase some medications, according to Geoffrey Joyce, a Rand economist and lead author of the study. However, Joyce noted that a follow-up study showed most of the medications "skipped" by patients because of higher copays were for non-life-threatening conditions, such as allergies and arthritis. He added that researchers did not "see a lot of evidence that people are going without essential meds" (Rundle, Wall Street Journal, 10/9). Marianne Laouri, senior program officer at CHCF, said, "As prescription drug costs continue to rise, we must be sure to understand the impact of benefit designs on health plan members" (CHCF release, 10/8).

Some patient advocates said the study illustrates the negative impact that rising copayments have on health care quality. Donald Steinwachs, chair of the Department of Health Policy and Management at the Johns Hopkins Bloomberg School of Public Health, wrote in an accompanying editorial that the study "raises a significant public policy concern that 'cannot be ignored'" (Wall Street Journal, 10/9). "Raising the copayments is a statement by large corporations that the quality of health care employees and families get doesn't make a difference -- it's not as critical as the bottom line," Steinwachs added. Ron Pollack, executive director of Families USA, said, "There is abundant evidence [on] how increased copayments, especially for lower-income employees, can have an adverse impact on the care they need -- including prescription drugs." Diane Rowland, executive vice president of the Kaiser Family Foundation, added there should be more study of the impact of rising copays (Singer, Fort Lauderdale Sun-Sentinel, 10/9). "This [study] shows that policy makers should be very careful when they change [health] plans for low-income patients, because they may react to even smaller changes in copayments," Joyce noted (Heldt Powell, Boston Herald, 10/9). The study is available online.