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Researchers examine the impact of drug pricing and copayments on medication use among elderly Canadians

Copayments for higher priced, equally effective prescription medications, so-called reference-based pricing, has been suggested as one way to help finance drug coverage for elderly patients. With reference-based pricing, only the cost of a specific, less expensive drug within a therapeutic class is covered fully by drug benefit plans, with a copayment required for expensive medications above a fixed limit. This approach to drug pricing apparently reduces drug expenditures without reducing use of antihypertensive therapy or increasing related health care use and costs among elderly residents of British Columbia Canada. That's the conclusion of three studies supported by the Agency for Healthcare Research and Quality (HS09855 and HS10881) and led by Sebastian Schneeweiss, M.D., Sc.D., of the Harvard Medical School. The studies are described here.

Schneeweiss, S., Soumerai, S.B., Glynn, R.J., and others. (2002, March). "Impact of reference-based pricing for angiotensin-converting enzyme inhibitors on drug utilization." Canadian Medical Association Journal 166(6), pp. 737-745.

In this study, the researchers analyzed 3 years of claims data from British Columbia for 2 years before and 1 year after implementation of reference-based pricing in a large group of elderly Canadian Pharmacare beneficiaries, who took angiotensin-converting enzyme (ACE) inhibitors to treat hypertension during the study period. They found that reference-based drug pricing achieved a sustained reduction in drug expenditures and no changes in overall use of antihypertensive therapy. Use of the higher priced, cost-shared ACE inhibitors sharply declined by 29 percent immediately after implementation of a reference-based pricing policy. After a transition period, the postimplementation use rate for all ACE inhibitors was 11 percent lower than projected from preimplementation data. Nevertheless, overall use of antihypertensives was unchanged.

The policy saved $6.7 million in pharmaceutical expenditures during the first 12 months. Patients with heart failure or diabetes mellitus who were taking a cost-shared ACE inhibitor were more likely to remain on the same medication after implementation of reference-based pricing. Low-income patients were more likely than those with high incomes to stop all antihypertensive therapy, which reflected a general trend toward discontinuation of therapy among these patients even before implementation of reference-based pricing.

Schneeweiss, S., Walker, A.M., Glynn, R.J., and others. (2002, March). "Outcomes of reference pricing for angiotensin-converting enzyme inhibitors." New England Journal of Medicine 346, pp. 822-829.

These researchers analyzed data from the Ministry of Health on nearly 40,000 elderly residents of British Columbia, who were enrolled in the provincial health insurance program and who received ACE inhibitors priced higher than the reference price of $27 a month in 1996 before the reference pricing policy began (January 1997). They compared 5,353 residents who switched to an ACE inhibitor not subject to cost sharing during the first 6 months with 27,938 residents who continued to receive only ACE inhibitors subject to cost sharing. Reference pricing for ACE inhibitors was not associated with changes in the rates of visits to physicians, hospitalizations, admissions to long-term care facilities, or mortality.

The probability of stopping all antihypertensive therapy decreased 24 percent after policy implementation compared with the probability before the change in policy. However, 18 percent of patients who had been prescribed ACE inhibitors subject to cost sharing switched to lower-priced alternatives. Compared with patients who did not switch, those who did had a moderate transitory increase in the rates of physician visits and hospital admissions through the emergency room during the 2 months after switching but not subsequently, which is most likely due to increased monitoring following the medication change.

Schneeweiss, S., Maclure, M., and Soumerai, S.B. (2002, March). "Prescription duration after drug copay changes in older people: Methodological aspects." Journal of the American Geriatrics Society 50, pp. 521-525.

This study examined 3 years of individual claims data for ACE inhibitor use for elderly people enrolled in Pharmacare, the drug benefits program covering all elderly patients in the province of British Columbia, Canada, who used ACE inhibitors between 1995 and 1997. There was a transitional sharp decline in the overall use of all ACE inhibitors after reference pricing was implemented. After 5 months, use rates had increased but remained under the predicted prepolicy trend. Coinciding with the sharp decrease was a reduction in prescription duration by 31 percent in patients switching to drugs not requiring a copayment.

The spurious temporary reduction in the use of cost-sharing ACE inhibitors and the transitional phase of shorter prescription duration were most likely attributable to increased monitoring of patients who switched medications, suggest the researchers. They conclude that analysis of prescription duration adds important insight to the time trend analysis of overall use data in the evaluation of drug policy changes.

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