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Increasing co-payments may reduce use of essential and non-essential medications

The JAMA Network Journals

Significant increases in co-payments may reduce the use of medications and raise concern about adverse health consequences, according to a study published in the May 19 issue of The Journal of the American Medical Association (JAMA).

In background information in the article the authors write, "In recent years, many health plans have implemented policies to contain drug costs, including raising beneficiary co-payments, mandating use of generics, requiring mail-order services, and expanding use of formularies, all of which have large effects on total drug spending. For example, doubling co-payments reduced total drug spending by 19 percent to 33 percent in one multiyear study of 25 companies."

Dana P. Goldman, Ph.D., from RAND, Santa Monica, Calif., and colleagues examined how changes in benefit design among privately insured populations affect use of the most commonly used drug classes. The researchers analyzed data from pharmacy and medical claims from 1997 to 2000 for 30 large U.S. employers and 52 health plans covering 528,969 beneficiaries, aged 18 to 64 years, continuously enrolled for up to four years.

"Doubling co-payments was associated with reductions in use of eight therapeutic classes," the authors report. "The largest decreases occurred for nonsteroidal anti-inflammatory drugs (NSAIDS) (45 percent) and antihistamines (44 percent). Reductions in overall days supplied of antihyperlipidemics [cholesterol lowering] (34 percent), antiulcerants (33 percent), antiasthmatics (32 percent), antihypertensives (26 percent), antidepressants (26 percent), and antidiabetics (25 percent) were also observed." The researchers found that patients diagnosed as having a chronic illness and receiving ongoing care were not as likely to reduce their use of medications. "Use of antidepressants by depressed patients declined by 8 percent; use of antihypertensives by hypertensive patients decreased by 10 percent. Larger reductions were observed for arthritis patients taking NSAIDs (27 percent) and allergy patients taking antihistamines (31 percent). Patients with diabetes reduced their use of antidiabetes drugs by 23 percent."

"The largest reductions were for drugs with close OTC (over-the-counter) substitutes that primarily treat symptoms rather than the underlying disease," the authors write. "When we examined the chronically ill population receiving routine care, a group of patients who are most likely to benefit from drug treatment, we still found that doubling co-payments is associated with reductions in drug use of 8 percent to 23 percent." In conclusion the authors write, "... significant increases in co-payments do raise concern about adverse health consequences because of the large price effects, especially among diabetic patients." (JAMA. 2004; 291:2344-2350. Available post-embargo at


Editor's Note: Data were provided by Ingenix Inc. This research was supported by the California Healthcare Foundation, with additional funding from Merck and Co. and the Agency for Healthcare Research and Quality to Drs. Goldman and Joyce.

Financial disclosures: Co-authors Dr. Landsman is an employee and stock option holder of Merck. Co-author Dr. Steven M. Teutsch is an employee and stock options holder of Merck and a stockholder in Johnson & Johnson.

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