Rising copayments and the kinked demand curve

Impact of Increased Copayments on the Discontinuation/Switching Rates of Nonformulary Medications

Background:

Patients with chronic diseases are particularly affected by prescription copayment increases, as they are faced with the decision to switch to formulary alternatives or pay more to stay on their current medication.

Objective:

To evaluate the impact of increased copayments as a result of a change in formulary status on the continuation rates of nonformulary medications in multitiered pharmacy benefit plans.

Methods:

A retrospective cohort study was conducted on patients with chronic diseases who were part of a health plan in the western US. Individuals were selected if they were taking a medication that was being removed from the health plan's formulary and, thus, experienced increases in their copayments for nonformulary medications (n = 1,244). The time periods before and after the increase in copayments were studied. Adjusting for demographics, chronic comorbidities, medication use, Medicare + Choice status, and percentage increase in copayment for nonformulary medications, Cox regressions were used to assess continuation rates for these drugs.

Results:

A clear relationship between increasing copayment differentials and continuation rates for nonformulary medications in the period after the copayment increases could not be established. In general, those who experienced higher copayment differentials (50–100%, 100–200%, >200%) were more likely to continue their nonformulary medication than were those who experienced copayment increases of 25–50% and >25%.

Conclusions:

Individuals confronted with increased copayments often switched their drugs to formulary alternatives. However, a clear relationship could not be established between increasing copayments and continuation behavior. Further research is needed to determine whether these switching behaviors result in inappropriate medication behaviors, such as complete discontinuation of drug therapy due to the increased costs.