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2003-12-04 -- Higher Copayments Can Lead Patients to Stop Taking Medication


Bloomberg News, December 4, 2003

Study Examines Rising Co-Pays


Patients with high blood pressure and other diseases stop buying their
medicines when insurance co-payments rise as much as twofold or more,
according to a study in today's New England Journal of Medicine.

Medco Health Solutions Inc. and Harvard Medical School scientists
tracked employees at two companies in 2000 that changed co-payments
for the list of drugs they cover. The lists included Merck & Co.'s
Mevacor cholesterol drug and Wyeth's Protonix for heartburn.

When insurance plans required patients to start paying a higher share
of drug costs at the pharmacy counter, 16 percent to 32 percent of
them quit buying medicines to lower blood pressure and cholesterol
levels and treat severe heartburn, researchers found.

"We need much greater knowledge about these details in order to reap
the advantages in cost savings without causing deleterious
consequences for patients," said researchers led by Haiden A. Huskamp,
a Harvard assistant professor of health economics.

Insurers create the lists of covered drugs, called formularies, to
encourage patients to use less expensive forms of the same medicines,
the researchers said. The formularies also allow insurers to offer
drugmakers higher sales as an incentive to negotiate discounts, they
said. Companies involved in the study declined to be identified.

The first company's insurer had been charging a $7 co-payment for any
medicine. Under the new system, workers were asked to pay $8
co-payments for generic medications, $15 for brand-name drugs on the
list and $30 for other prescriptions.

Employees at the second company, who paid $6 for generic drugs and $12
for brand-name medicines, now have to pay an additional $24 for any
medicine not on the insurance company's list of preferred drugs.

The most expensive drugs on the lists included AstraZeneca Plc's
Zestril, Bristol-Myers Squibb Co.'s Monopril, Abbott Laboratories'
Mavik, and King Pharmaceutical's Inc.'s Altace for high blood
pressure; Merck & Co.'s Mevacor and Novartis AG's Lescol for
cholesterol; and Wyeth's Protonix and AstraZeneca's Nexium for acid
reflux disease, a severe form of heartburn.

"Some pharmacists say patients just leave" without their medicines,
Huskamp said. "There could be some risks associated with making
particularly aggressive changes" to drug plans, she said.

The results will help Medco, a pharmacy-benefit management company
based in Franklin Lakes, N.J., advise its clients, said Robert S.
Epstein, chief medical officer and a study researcher.

"You can move too far, too fast," said Epstein. "There is some
influence on people dropping therapy, which is not a good thing."

Most companies don't make such dramatic changes, he said, and even
small ones can yield a significant benefit.

"Consumers voted with their feet," he said. "More than 50 percent of
them chose the more cost-effective medication, and that was more
dramatic than we would have predicted."


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Boston Globe,  December 04, 2003


Researchers Find Higher Copayments Can Lead Patients to Stop Taking
Medication

Dec. 4--Since the late-1990s health insurers and employers have
dramatically increased the copayments they charge members for
prescription drugs, but new research shows this may harm patients.

In one of the first studies to examine this significant shift in
insurance coverage, higher copayments not only helped control costs
but also apparently led some employees to stop taking their
medications.

Researchers at Harvard Medical School, who reported their results in
today's New England Journal of Medicine, examined what happened to
employees whose companies raised medication copayments dramatically or
moderately. At the unnamed company that raised copayments
dramatically, 16 percent of workers who were taking ACE inhibitors for
high blood pressure stopped taking the medication altogether; 32
percent of workers taking proton-pump inhibitors for heartburn
stopped, and 21 percent taking statins to lower cholesterol
discontinued their medicine.

The study did not follow these patients to determine whether their
health deteriorated or not.

At this particular company, an additional 35 to 50 percent of
employees taking these drugs switched to lower cost drugs -- the
original intent of the higher copayments.

"We definitely want to provide this information to employers, health
plans, and policy makers," said Harvard researcher Haiden Huskamp.

"These arrangements sprang up pretty recently, and they're the
dominant method now, but there hasn't been a lot of information about
their effects on patients."

She said the information is particularly important for federal
regulators as they decide how to implement prescription drug coverage
for senior citizens enrolled in Medicare.

In an accompanying editorial, Cindy Parks Thomas of Brandeis
University said that while Congress debates Medicare prescription drug
coverage, "a quiet revolution has been taking place in the way
benefits are managed for 200 million Americans who already have
insurance for prescription drugs."

Just a decade ago, most employees paid a standard $5 copayment for a
prescription, no matter what kind of medication they bought. Now, 63
percent of all health plans have adopted so-called "three-tier
formularies," which often charge workers $10 for generic drugs, $15
for preferred or low-cost brand-name drugs, and $25 or more for
non-preferred or expensive brand name drugs. This means, Thomas said,
that for specific drugs, an insured person pays up to half the full
price -- a dramatic change from the mid- and late-1990s.

These three-tier plans have saved money for health plans and
employers, reducing drug expenditures up to 30 percent, by encouraging
members to buy fewer prescription drugs and cheaper ones.

But, Thomas said, "important questions remain regarding the effect of
these formularies on patients' health outcomes."

The Harvard study didn't answer these questions, but suggested that
negative effects on patients are possible and that more research is
needed. Almost all Massachusetts health plans and employers have
three-tier formularies.

The researchers studied pharmacy data from 1999 to 2001 gathered by
Medco Health Solutions, which manages pharmacy benefits for health
insurers and employers. Researchers tracked employees at two companies
that were adopting higher copayments, and who had filled at least two
prescriptions for ACE inhibitors, statins, and proton-pump inhibitors
before the change.

They reviewed patients' prescriptions for six months after their
companies adopted higher copayments. The compared changes in patients'
behavior to those at two other companies that had not made any changes
in copayments.

The most dramatic change -- patients dropping drugs altogether --
occurred at the company that increased copayments from $7 for all
drugs to $8, $15 and $30. It is possible, however, that some of these
employees continued taking their drugs but switched to filling their
prescription under a spouse's health insurance plan.

Researchers also studied a company that made more modest changes --
keeping a $6 copayment for generic drugs and a $12 copayment for
cheaper brand-name medicines but adding a $24 copayment for expensive
brand-name drugs. Employees at that company switched to less expensive
drugs but did not drop their medicines more often than those at the
comparison company.

"What we would recommend to employers and health insurers is to go
slowly," said Dr. Patricia Deverka vice president of scientific
affairs for Medco.


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Contra Costa Times, Thursday, Dec. 04, 2003

Study: Some give up drugs as prices jump

STEPHANIE NANO

Associated Press

A study found that when employers switch to a three-tier prescription
drug plan that charges a lot extra for brand-name medications, a
disturbing number of people simply stop taking their blood pressure
and cholesterol pills, instead of switching to cheaper varieties.

More and more employers have been adopting three-level pricing plans,
which are designed to encourage employees to use generics or other
less expensive drugs. Those who want to use pricier drugs have to pay
the highest out-of-pocket expenses.

In a study of two such plans, as many as half of the employees changed
from an expensive drug to a cheaper one when their benefits switched
to three tiers. But many others quit getting their prescriptions for
chronic conditions.

While researchers said they do not know exactly why the employers gave
up their drugs and what effect that had on their health, "it is
worrisome to see that people have stopped taking their medication,"
said one of the researchers, Dr. Patricia Deverka of Medco Health
Solutions, the nation's largest pharmacy benefit-management company.

The study was conducted by researchers at Harvard Medical School and
Medco and was reported in Thursday's New England Journal of Medicine.

Nearly all employer-provided insurance plans offer workers some kind
of prescription drug benefit, and 63 percent of those employees are
now in three-tier plans, up from 27 percent in 2000, according to the
nonprofit Kaiser Family Foundation. The newly passed Medicare
legislation allows for the use of tiered pricing for its prescription
drug benefit.

Under the plans, employees pay the lowest copayment for generic drugs,
a higher amount for brand-name drugs on a preferred list, and the
highest amount for other brand-name medicines.

The study examined how the move to a three-tier plan by two large
companies in 2000 affected spending and the use of three commonly
prescribed drugs: ACE inhibitors for high blood pressure and heart
failure; proton pump inhibitors for acid reflux; and statins for high
cholesterol.

The first employer, with 55,500 hourly workers, went from a $7
copayment for all prescriptions to $8 for generics, $15 for preferred
brand names and $30 for third-tier brand names. The second employer,
with 11,600 salaried workers, had a less dramatic change, adding a
third level of $24 for brand names to its two-level plan of $6 for
generics and $12 for preferred brand names.

The researchers also looked at similar plans at other companies to see
what happens when no changes in copayments occur.

Only in the first employer group were workers more likely to quit
taking their top-tier drugs when the copayment jumped. About 16
percent stopped taking their ACE inhibitors compared with 6 percent in
the comparison group, 21 percent stopped statins compared with 11
percent, and 32 percent dropped acid reflux drugs compared with 19
percent.

Harvard researcher Haiden Huskamp said it is possible that some of the
workers filled their prescriptions through a spouse's health plan or,
in the case of acid reflux drugs, the medication may no longer have
been necessary.

Many of the workers in both employer groups did switch to lower-priced
drugs, ranging from 18 percent for acid reflux drugs to 49 percent for
statins.

Total spending under each plan did not change much. In the first
employer group, the health plan itself had substantial savings, since
more of the cost was shifted to the employees.

Cindy Parks Thomas of Brandeis University, who wrote an accompanying
commentary, said more research is needed to find out more about who
was quitting their drugs - sick people, or perhaps those who really
didn't need the medication.

"The actual impact on health is a big question mark," she said.

Deverka said those studies are under way, and in the meantime, Medco
would advise employers to take a more incremental approach when making
changes to their health benefits.

Susan Pisano, a spokeswoman for AAHP-HIAA, a health industry group,
said tiered plans have given broad access to prescription drugs to
millions of Americans. She noted that the study does not take into
account monitoring programs that make sure patients are taking
critical drugs.

Gary Claxton of the Kaiser Family Foundation said patients should ask
their doctor about generics or lower-costing alternatives when their
benefits change.

"Make sure your physician knows that one drug versus another has a big
consequence to you - particularly if it's something you're going to be
taking for a long period of time," he said.

New England Journal: http://www.nejm.org
Abstract: http://content.nejm.org/cgi/content/short/349/23/2224


Kaiser Family Foundation: http://www.kff.org