Healthy Skepticism Library item: 11417
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Publication type: Journal Article
Gilman BH, Kautter J.
Consumer response to dual incentives under multitiered prescription drug formularies.
Am J Manag Care 2007 Jun; 13:(6):
http://www.ajmc.com/files/articlefiles/AJMC_07junPrt2Gilman353to59.pdf
Abstract:
OBJECTIVE: To decompose the overall effect of multitiered formularies on drug utilization and spending into the following 2 observed effects on consumer behavior: first, higher copayments on drug equivalents create an incentive to reduce the number of prescriptions, and, second, wider differential copayments between drug equivalents create an incentive to use a greater proportion of generics.
STUDY DESIGN: We merged drug claims for 352,760 retired Medicare enrollees having employer-sponsored health insurance with benefit information. Our unit of analysis was the enrollee. We used cross-sectional variation in incentive-based formularies to compare the effects of increased copayment amounts for drug equivalents with those of increased copayment differentials between drug equivalents. The study sample may not be representative of the Medicare population.
METHODS: Multivariate regression analysis using the 2002 MarketScan Medicare Supplemental and Coordination of Benefits database and Benefit Plan Design database.
RESULTS: A 10% increase in copayments for drug equivalents was associated with a 1.3% reduction in total drug spending, a 16.0% increase in out-of-pocket expenditures, a 2.0% reduction in the number of prescriptions filled, and a 0.7% reduction in proportion of prescriptions filled with generics. A 10% increase in copayment differentials between drug equivalents was associated with a 1.0% reduction in total drug spending, a 4.1% increase in out-of-pocket expenditures, a 1.0% reduction in the number of prescriptions filled, and a 0.7% increase in proportion of prescriptions filled with generics.
CONCLUSION: Increasing copayment differentials between drug equivalents is as effective a strategy for reducing total drug spending as increasing copayment amounts for drug equivalents but better maintains access to prescription medications.
Keywords:
Publication Types:
Research Support, Non-U.S. Gov't
MeSH Terms:
Age Distribution
Aged
Aged, 80 and over
Consumer Satisfaction/economics*
Consumer Satisfaction/statistics & numerical data
Deductibles and Coinsurance/economics*
Deductibles and Coinsurance/statistics & numerical data
Drug Utilization Review
Female
Formularies
Health Care Surveys
Health Status
Humans
Insurance, Pharmaceutical Services/classification*
Insurance, Pharmaceutical Services/economics*
Insurance, Pharmaceutical Services/statistics & numerical data
Male
Medicare/statistics & numerical data
Multivariate Analysis
Prescription Fees
Regression Analysis
Sex Distribution
United States
Notes:
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