Effect of a three-tier prescription copay on pharmaceutical and other medical utilization

Abstract

Background: In response to rising prescription drug costs, plan sponsors are increasingly implementing three-tiered pharmacy benefits.

Objective: This study examined the effect of a three-tiered pharmacy benefit on pharmaceutical utilization and expenditures, medication continuation, and use of other medical resources in a population of continuously eligible, commercially insured enrollees of a preferred provider organization (PPO).

Research design: A quasi-experimental prepost with comparison group design was used. The pre- and postperiods were each 12 months long.

Subjects: The intervention group included enrollees whose employer moved from the PPO's two-tier benefit to a three-tier benefit (n = 6881). The comparison group included enrollees whose employer remained under the PPO's two-tier benefit (n = 13,279).

Measures: Key dependent variables included total prescription claims and costs, net costs (total minus copay), medication continuation, office visits, and inpatient and emergency room use.

Results: Relative to the comparison group, the intervention group experienced lower prescription utilization and expenditures and reduced net costs. Medication continuation rates were lower at 6 and 11 months in one of four chronic therapy classes examined; however, discontinuation could not be clearly linked to tier-three medication use. No significant differences in physician office visits, inpatient, or emergency room use rates were found.

Conclusions: Three-tier prescription copays can control drug costs without evidence of change in use of other medical resources in the year following implementation. Future research should examine a variety of three-tier designs.