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Health Care Costs and Financing

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Researchers examine impact of drug cost-sharing on prescribing practices

Medication costs have continued to escalate, prompting many countries to consider a variety of cost-containment strategies. In one strategy, reference-based pricing (RP), patients who use high-priced medications must pay out-of-pocket for the difference in price between that drug and the lower-cost alternative drug within the same class. The introduction of RP in British Columbia in 1995 and 1997 was expected to save money and to contain the increasing costs for drugs borne by the province's publicly funded drug-benefit plan, Pharmacare. Two recent studies that were supported in part by the Agency for Healthcare Research and Quality (HS10881 and HS09855) and led by Sebastian Schneeweiss, M.D., Sc.D., of Brigham and Women's Hospital, examine the use of RP and income-based deductibles to address rising medication costs.

The first study found differences in drug prescribing policies among female and male physicians following the start of the RP policy. The second study demonstrated that evaluating the consequences of income-based deductibles for prescription drugs is more complicated than evaluating other drug cost-containment measures. The two studies are summarized here.

Duetz, M.S., Schneeweiss, S., Maclure, M., and others. (2003). "Physician gender and changes in drug prescribing after the implementation of reference pricing in British Columbia." Clinical Therapeutics 25(1), pp. 273-284.

These authors examined differences between male and female physicians in prescribing angiotensin-converting enzyme (ACE) inhibitors, which are used to treat hypertension, after implementation of RP for ACE inhibitors in January 1997. They conducted the analysis by linking pharmacy and medical service claims data on 927 female and 2,922 male physicians treating 47,680 Pharmacare Plan A elderly enrollees, who were prescribed a high-priced ACE inhibitor before the implementation of RP. If a higher-cost drug was chosen or continued, the amount of shared cost ranged from $2 to $62 (Canadian dollars) per monthly supply. Physicians could request an exemption from the RP policy through prior authorization for frail elderly patients or in cases of drug intolerance or treatment failure.

The patients of female physicians were 25 percent more likely to receive a written physician-requested exemption from copayment, and they were 43 percent more likely to stop antihypertensive drug therapy (for example, captopril, quinapril, and ramipril). These slightly different patient management strategies may suggest a higher degree of responsiveness of female doctors to their patients' requests. However, since there are few female doctors in British Columbia, these management differences were unlikely to have meaningful clinical or economic consequences, conclude the authors.

Although not a significant finding, patients seen by female physicians were somewhat more likely than patients seen by male physicians to discontinue antihypertensive treatment. However, this difference was unrelated to the introduction of the drug cost-sharing policy because it was observed to the same extent in the year before the policy change. Rather, it suggests a difference between male and female physicians in the treatment of hypertension independent of reference pricing.

Schneeweiss, S., Maclure, M., and Dormuth, C. (2002). "On the evaluation of drug benefits policy changes with longitudinal claims data." Disease Management Health Outcomes 10(12), pp. 763-769.

Drug cost-containment policies often involve cost-sharing for higher cost medications as well as an annual deductible for prescription drugs. Evaluating the clinical and economic consequences of drug cost-containment policies is critical to ensure that these policies do not adversely affect patient health. However, in contrast to standard studies of one-time drug policy interventions, designs for studies of the impact of income-based deductibles are more complex because individual patients reach the deductible at different times. Also, some patients will never reach their annual deductible. The duration of each patient's uncovered period before reaching the deductible—and therefore the time at risk for increased rates of unintended outcomes—depends on the amount of the deductible and on individual drug use. Both of these are functions of income and health status, according to these researchers.

In this paper, they develop a causal model of the consequences of income-based deductibles, which includes outcomes such as health status, health care use, and expenditures. In the model, reduced drug use is a direct consequence of deductibles and available income. Using longitudinal claims data, they propose testing the impact of income-based deductibles by comparing the experience of a group of patients during the uncovered period versus the hypothetical experience (based on the population's prior experience) of the same group of patients if the policy had not been introduced. They conclude that the evaluation of complex drug coverage changes with observational data can be subject to subtle sources of bias.

The evaluation of the consequences of income-based deductibles for prescription drugs is more complicated than the evaluation of other drug cost-containment measures. For example, the duration of exposure to an uncovered period cannot be assumed to be independent of patient characteristics, including income and health status. The validity of an evaluation therefore depends on the ability to measure and adjust for such factors.

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