Using policy simulation to predict drug plan expenditure when planning reimbursement changes

Impact of two sequential drug cost-sharing policies on the use of inhaled medications in older patients with chronic obstructive pulmonary disease or asthma

BACKGROUND

Evaluations of drug cost-sharing policies within the same population are needed for a fair comparison of different options.

OBJECTIVE

The aim of this work was to analyze the impact of 2 changes in a public drug insurance plan on the use of inhaled medications in British Columbia (BC), Canada.

METHODS

Data for the period from 1997 to 2004 were used to assess whether changes in the use of steroid, beta2-agonist, and anticholinergic inhalers were associated with insurance-plan changes in a large, natural experiment involving all BC residents aged>or=65 years. The 3 sequential policies included full coverage, fixed copayments at the beginning of 2002, and 25% coinsurance with an income-based deductible beginning May 1, 2003. Linkable prescription, physician billing, hospitalization, and mortality records were obtained from the BC Ministry of Health Services. From the total population of residents aged>or=65 years, we extracted data for all patients to whom inhaled steroids, beta2-agonists, or anticholinergics were dispensed on or after January 1, 1997. Multivariable linear regression was used to estimate inhaler use during a 60-month baseline period and during implementation of the subsequent copayment and coinsurance plus deductible policies. We used logistic regression to identify predictors of initiation and cessation use of inhaled medications among older patients.

RESULTS

Use declined for inhaled steroids (-12.3%; P<0.001), inhaled anticholinergics (-12.2%; P<0.001), and inhaled beta2-agonists (-5.8%; P<0.001). Patients with new diagnoses of asthma or chronic obstructive pulmonary disease were 25% (95% CI, 14%-31%) less likely to initiate treatment with inhaled steroids when covered by the copayment or coinsurance plus deductible policies than when they had full coverage. Chronic users of inhaled steroids were 47% (95% CI, 40%-55%) more likely to cease treatment when they were covered by the copayment policy and 22% (95% CI, 15%-29%) more likely to cease when covered by the coinsurance plus deductible policy than when they had full coverage.

CONCLUSIONS

The copayment and coinsurance plus deductible policies were associated with significant reductions in use of inhaled medications, mostly due to decreased initiation and increased cessation rates. However, the consequences of these policies on health outcomes have not yet been determined.

Reference drug programs: effectiveness and policy implications

In the current economic environment, health care systems are constantly struggling to contain rapidly rising costs. Drug costs are targeted by a wide variety of measures. Many jurisdictions have implemented reference drug programs (RDPs) or similar therapeutic substitution programs. This paper summarizes the mechanism and rationale of RDPs and presents evidence of their economic effectiveness and clinical safety. RDPs for pharmaceutical reimbursement are based on the assumption that drugs within specified medication groups are therapeutically equivalent and clinically interchangeable and that a common reimbursement level can thus be established. If the evidence documents that a higher price for a given drug does not buy greater effectiveness or reduced toxicity, then under RDP such extra costs are not covered. RDPs or therapeutic substitutions based on therapeutic equivalence are seen as logical extensions of generic substitution that is based on bioequivalence of drugs. If the goal is to achieve full drug coverage for as many patients as possible in the most efficient manner, then RDPs in combination with prior authorization programs are safer and more effective than simplistic fiscal drug policies, including fixed co-payments, co-insurances, or deductibles. RDPs will reduce spending in the less innovative but largest market, while fully covering all patients. Prior authorization will ensure that patients with a specified indication will benefit from the most innovative therapies with full coverage. In practice, however, not all patients and drugs will fit exactly into one of the two categories. Therefore, a process of medically indicated exemptions that will consider full coverage should accompany an RDP. In the current economic environment, health care systems are constantly struggling to contain rapidly rising costs. Drug costs are targeted by a wide variety of measures. Many jurisdictions have implemented reference drug programs, and others are considering them. This paper summarizes the mechanism and rationale of RDPs, presents evidence of their economic effectiveness and clinical safety, and concludes with some practical implications of implementing RDP policies.