Download How Do Drug Benefits Affect Use and Spending on Prescription

How Drug Benefits Affect
Pharmaceutical and Medical Use
Geoffrey Joyce
Rising Expenditures on
Prescription Drugs
• Drug spending increasing rapidly
– New drugs and higher prices
– Increased insurance coverage
– Aging population
– Earlier diagnosis
– Increased marketing and advertising
• Drug spending about 10% of total expenditures
– Higher percentage for non-elderly
A5094-2 01/04
Health Plans Face Largest Increases
in Pharmaceutical Spending
% Annual Increase
1990–98
Private health plans
18%
Patients
4%
Source: C. Copeland, EBRI Notes (September, 2000)
A5094-3 01/04
Study Questions
• How does benefit design affect Rx use and
costs?
• Do the effects of higher cost-sharing vary by
drug class and patient group?
• Do pharmacy benefits affect use of medical
services?
• What will pharmacy benefits look like over the
next 3-5 years?
A5094-4 01/04
Study Sample
• Linked health care claims to health plan benefits
of 30 large employers (1997-2000)
– 52 health plans
– 529,000 primary beneficiaries age 18-64
(960,000 person-years)
– Adding data for 2001-2003
A5094-5 01/04
Analytic Approach
Outcomes
• Pharmacy spending and use (days supplied)
• Inpatient and ER use
Other factors controlled for
•
•
•
•
•
Rx drug benefits
Medical benefits; plan type
Patient demographics
Health status (26 chronic conditions)
Area characteristics and year
A5094-6 01/04
Doubling Co-payments
Reduces Rx Spending
Type
of plan
Co-payment
% Reduction
in total Rx
spending
$ Savings to
plan
1-tier
$5 for all drugs
 $10
22%
2-tier
$5 generic, $10 brand
 $10/20
33%
$220
3-tier
$5 generic, $10 preferred,
$15 non-preferred brand
 $10/20/30
35%
$237
$165
A5094-7 01/04
Adding Tiers Reduces Rx Spending
Rx benefit
Benefit change
% Reduction in
total Rx
spending
1-tier plan:
$10 co-payment
for all drugs
Add 2nd tier
($20 for
brand drugs)
19%
2-tier plan:
$10 generic
$20 brand drugs
Add 3rd tier
($30 for
non-preferred
brand drugs)
4%
2-tier plan:
$10 generic
$20 brand drugs
Require generics
8%
A5094-8 01/04
Drugs for Treating Chronic Conditions
Drug class
Top drugs in 2000
Antihistamines
Claritin, Allegra, Zyrtec
Antiinflammatories
Celebrex, Relafen, Vioxx
Antidiabetics
Glucophage, Rezulin, Avandia
Antiasthmatics
Singulair, Flovent
Antiulcerants
Prilosec, Prevacid, Propulsid
Antihyperlipidemics
Zocor, Lipitor, Pravachol
Antihypertensives
Norvasc, Vasotec, Cardizem CD
Antidepressants
Zoloft, Paxil, Prozac
A5094-9 01/04
Higher Co-Pays Reduce Use; Effects Differ
Across Drug Classes
Antihistamines
Antiinflammatories
Antidiabetics
Antiasthmatics
Antiulcerants
Chronicallyill only
All members
Antihyperlipidemics
Antihypertensives
Antidepressants
0
10
20
30
40
50
Reduction in days supplied from doubling copays (%)
A5094-10 01/04
Disease-Specific Medications Decline Less
Therapeutic class
Antihistamines
NSAIDs
Antidiabetics
Antiasthmatics
Antiulcerants
Antihyperlipidemics
Within Class
Other Classes
Antihypertensives
Antidepressants
0
5
10
15
20
25
30
35
Reduction in days supplied when co-payments double (%)
A5094-11 01/04
Impact on Medical Use
For diabetes, asthma and gastric acid disorder…
• Doubling co-payments led to a :
• 10% increase in hospital days
• 17% increase in ER visits
• No significant effects for other 5 conditions
Preliminary evidence
• Limited information on full extent of medical
plan choice
A5094-12 01/04
Effect of Moving Prilosec (omeprazole) to 3rd Tier
1
0.9
Plan A
0.8
0.7
Proportion
of GI
prescriptions
0.6
0.5
0.4
Plan B
0.3
0.2
Plan C
0.1
0
1
3
5
7
9
11
13 15
17 19
21 23
Month
A5094-13 01/04
Assessing the Effects of Spending Caps
The tradeoff:
• Lower caps decrease cost of Rx benefit, making
drug coverage available to more patients
• Exceeding the cap increases risk that patients
will reduce medication use
Study sample:
• About 1300 Medicare+Choice enrollees in one
state
• Exceeded annual Rx benefit cap of $750 or
$1,200 in 2001
• Had resulting coverage gaps of 75-180 days
A5094-14 01/04
Exceeding Caps Significantly Affected
Medication Use
Switched
Used less often
Used free samples
0
10
20
30
40
50
% of beneficiaries using strategy
A5094-15 01/04
Shifting More Costs to Patients Will Continue…
Survey of health plans and insurers indicate:
• Continued growth in 3-tier and 4-tier benefits
• Promote generics and generic-only plans
• Larger co-pay differences between 1st & 3rd tiers
• Tiered coinsurance
• Concern over injectibles and biotech agents
A5094-16 01/04
Summary of Findings
• Cost-sharing matters (across plans, patient groups)
– Doubling co-payments reduced use by 1/3rd
– Largest reductions for drugs that treat symptoms
– Smaller reductions in use by chronically ill
• But price sensitivity raises health concerns
• Spending caps affect adherence and use
– 18% exceeding cap took less medication
– 15% switched medications
A5094-17 01/04
A5094-18 01/04