# Presentation: 555210

## Effect of Increased Copayments on Pharmacy Use in the Department of Veterans Affairs 

- Kevin T. Stroupe, PhD1,2,3,4
- 1 Midwest Center for Health Services & Policy Research, Hines VA Hospital, Hines, IL
- 2 Cooperative Studies Program Coordinating Center, Hines VA Hospital, Hines, IL
- 3 VA Information Resource Center, Hines VA Hospital, Hines, IL
- 4 Northwestern University Feinberg School of Medicine, Chicago, IL

## Collaborators

- Bridget M. Smith, PhD1
- Todd A. Lee, PharmD, PhD1,3
- Ramon Durazo-Arvizu, PhD1
- Elizabeth Tarlov, PhD1,4
- Lishan Cao, MS3
- Zhiping Huo, MS3
- Tammy Barnett, MA1,2
- Denise Hynes, PhD, RN1,4
- Kevin Weiss, MD1,3
- 1 Midwest Center for Health Services & Policy Research, Hines, IL
- 2 Cooperative Studies Program Coordinating Center, Hines, IL
- 3 Northwestern University Feinberg School of Medicine, Chicago, IL
- 4 VA Information Resource Center, Hines, IL

## Background

- In 2001, VA spent over $3 billion on outpatient medications
- As in the private sector, the VA has increased cost sharing by patients

## Background

- February 4, 2002 VA raised the medication copayment from $2 to $7 per 30-day supply
- This increase was the first change in the copayment amount for medications since the copayment was instituted in 1990

## Study Objectives

- To examine the association of the copayment increase with medication acquisition from VA pharmacies
- For all chronic medications
- For specific categories of medications
- To examine the association of the copayment increase with medication acquisition for higher and lower pharmacy users

## Study Objectives

- To examine rates of discontinuation of VA pharmacy use
-  For all chronic medications, over-the-counter (OTC) medications, and prescription only medications
- For medications to treat common chronic conditions

## Setting:Medication Copayments in VA

- Veterans may obtain both Rx-only medications and OTC medications from VA pharmacies
- All medications require a prescription from VA
- The same copayment applies to Rx-only and OTC medications
- Veterans are not subject to copayments for supplies (e.g., gauze) from the VA pharmacy

## Setting:Medication Copayments in VA

- Veterans are subject to the copayment depending on their VA Priority category        (1 though 8),
- which were established to manage access to VA care in relation to VA’s resources

## Setting:Medication Copayments in VA

- Veterans in Priority 1
- have a service-connected condition that is 50% or more disabling
- are exempt from drug copayments

## Setting:Medication Copayments in VA

- Veterans in Priorities 2 through 6
- have service-connected conditions <50% disabling, low incomes, or other recognized statuses (e.g., former POW)
- are exempt from copayments for drugs for their service-connected disabilities
- have a cap on their out-of-pocket medication spending set at $840 annually (increased to $960 in 2006)

## Setting:Medication Copayments in VA

- Veterans in Priorities 7 and 8
- are subject to copayments for all drugs
- have no cap on their annual out-of-pocket prescription copayments

## Setting:Medication Copayments in VA

**	**Veterans may have copayments for
- No Drugs
- Priority Category 1
- Some Drugs
- Priority Categories 2 - 6
- All Drugs
- Priority Categories 7 - 8

## Study Design

- Retrospective observational study using data from national VA databases
- We examined medication acquisition of patients from VA in the 1-year periods
- before (February 4, 2001 to February 3, 2002) and
- after (February 4, 2002 to February 4, 2003) the copayment increase

## Study Sample

- 5% random sample of male VA users in fiscal year (FY) 2001
- To ensure that differences in medication acquisition before and after the copayment increase were not due to length of time in the study, we restricted sample to
- veterans who used VA inpatient or outpatient services in the 1-year period before the study
- veterans who were alive at the end of the study period

## Study Timeline

## Study Sample

## Data Sources for Study

- VA Pharmacy Benefit Management (PBM) Database
- Used to obtain: Medication acquisition 1 year before and after copayment increase (Feb 4, 2001 – Feb 4, 2003)
- VA National Patient Care Database (NPCD) Medical SAS Datasets
- Used to obtain: Patient characteristics
-  e.g., age, race, etc.
- VA Enrollment file
- Used to obtain: Veteran priority category

## Pharmacy Utilization

- VA copayment applies to each 30-day supply or less
- We calculated the number of 30-day equivalent supplies by dividing the day’s supply as dispensed by 30
- e.g., one prescription with an 90-day supply dispensed became three 30-day equivalent supplies
- We considered a prescription with <30-day supply as one 30-day supply because the full copayment applies to these prescriptions

## Pharmacy Utilization

- Patients may obtain drugs from VA to treat chronic conditions (e.g., hypertension) or for short-term conditions (e.g., infections)
- Because changes in acquisition of drugs for chronic conditions could affect the long-term management and consequences of these conditions,
- we focused on drugs for chronic rather than acute conditions

## Pharmacy Utilization

- To exclude medications that were likely to be used on a short-term basis
- we removed any type of drug that the patient did not receive at least one 30-day supply before or after the copayment increase

## Pharmacy Use Categories

- We divided patients into higher and lower pharmacy use groups based on the number of different medications patients received before the copayment increase

## Pharmacy Use Categories

- Based on quartiles of the number different medications, we grouped patients as
- low medication users (≤ 3 medications)
- moderately low users (4 – 6 medications),
- moderately high users (7 – 11 medications)
-  and high users (> 11 medications)

## Medication Categories

- All chronic medications:
- Medications with al least one 30-day supply

## Medication Categories

- Higher and lower-cost medications
- medications with a retail cost more or less than the copayment
- Based on adjusted Average Wholesale Price
- OTC and Rx-only medications
- Based on indicator variables in the database

## Medication Categories

- More and less essential medications
- Medications that prevented deterioration in health, prolonged life, and were not likely to be prescribed without a definitive diagnosis
- Medications were that could relieve symptoms without affecting the underlying disease process
- Based on modified lists from WHO that have been used in previous studies

## Medication Categories

- Medications for chronic conditions
- These medications included: anti-hypertensives, lipid lowering agents, anti-coagulants, diabetes medications, antiarrhythmics, antianginals, antidepressants, and antipsychotics
- To ensure that antidepressant users were not receiving them on only a short-term basis, we restricted antidepressant users to
- Patients with Dx of depression during the 2 years prior to the copayment increase
- Who were using an antidepressant at the beginning of the study period

## Analysis

- To examine the effect of the copayment on the number of 30-day supplies in the 1-year periods before and after the copayment increase
- We used zero-inflated negative binomial count models
- controlling for age, race, comorbidities, insurance status, distance, and socio-economic status

## Analysis

- To determine the impact of the copayment increase on medication acquisition from the VA,
- we used the natural experiment that occurred when the copayment was increased for certain veterans
- Veterans with no copays were ‘control’ group
- Veterans with copays for some or all medications were ‘experimental’ groups

## Analysis

- We used a difference-in-differences approach to
- estimate the change in number of 30-day supplies after the increase for veterans subject to the copayment relative to
- the change in number of 30-day supplies after the increase for veterans with no copayments

## Analysis

- Advantage of difference-in-differences method:
- any change in control group’s medication acquisition reflects changes unrelated to the copayment
- while any change in the experimental groups’ medication acquisitions reflects both the (same) naturally occurring change plus the impact of the copayment change

## Analysis

- To implement the difference-in-differences estimator, we specified the conditional mean number of 30-day prescriptions from VA as
- E(*y*it|***x***it) = (1-*q*it) exp(β**0**** **+ β*1**Some_copay*it + β*2**All_copay*it + β*3**Post*t + β*4*[*Some_copay*it  *Post*t] + β*5* [*All_copay*it  *Post*t] + *****′****z***it)
- Where: *Some_copay*it is an indicator that patient *i* was subject to
- 			 the copayment for some medications in period *t*,
*	**All_copay*it is an indicator that the patient was subject to the
- 			 copayment for all medications,
*	**Post*t is an indicator whether the copayment increase was
- 			 applicable in period *t*,
- 	*Some_copay*it  *Post*t and* All_copay*it  *Post*t indicate
- 			patients subject to the copayment after the
- 			copayment increase
- 	 ***z***it are other patient characteristics

## Analysis

- To examine the impact of copay increase on discontinuation of VA pharmacy services (for all chronic medications, Rx-only medications, OTC medications, and medications for specific conditions),
- we used multivariable logistic regression models to examine the probability of discontinuing VA pharmacy use for medications after the copayment increase
- For all models, the veterans with no medication copayments were the reference group

## Analysis

- For each logistic regression model, we included only patients who had a prescription for the type of medication being examined

## Patient Characteristics by Copay Category

|  | Copays for
 No Drugs
N = 19,620  | Copays for Some Drugs 
N = 102,643  | Copays for All Drugs
N = 28,720  |  |
| --- | --- | --- | --- | --- |
| Age, mean  SD, years | 59  14  | 61  14  |  | 66  12  |
| Black, %   | 13  | 14  |  | 5  |
| Married, %  | 62  | 50  |  | 70  |
| Distance to closest VA,
mean  SD, miles | 46  104 | 41  83 |  | 42  68 |
| Hierarchical Condition Category, mean  SD, Score | 0.90  0.77  | 0.78  0.70  |  | 0.65  0.48  |
| VA insurance coverage only, % | 51  | 49  |  | 25  |
| Median Income in Zip Code | $40,000 | $45,000 |  | $48,000 |
|  |  |  |  |  |

## Monthly 30-Day SuppliesAll Chronic Drugs

- Copay Increase

## Adjusted Change in Number of 30-Day Supplies Annually After Copay IncreaseAll Chronic Drugs

|  |  | Copays for Some Drugs
N = 102,643 |  |  |  |  |  | Copays for All Drugs
N = 28,720 |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Mean Number of 30-Day Supplies |  |  | Change in 30-Day Supplies
  |  | 95% CI | Mean Number of 30-Day Supplies |  | Change in 30-Day Supplies 
  |  |  | 95% CI |
| All Chronic Drugs |  |  | 46.9 | -2.1  | -3.0 to -1.3  |  |  | 41.2 |  | -1.9 | -2.9 to -0.9  |  |

## Adjusted Change in Number of 30-Day Supplies Annually After Copay Increase 

|  |  |  | Copays for Some Drugs
N = 101,331 |  |  |  |  |  | Copays for All Drugs
N = 28,185 |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Mean Number of 30-Day Supplies |  |  |  | Change in 30-Day Supplies
  |  | 95% CI | Mean Number of 30-Day Supplies |  |  | Change in 30-Day Supplies 
  |  | 95% CI |
| Higher cost |  | 40.0  |  | -1.6 |  | -2.3 to -0.9  |  |  |  | 36.3 | -1.6  | -2.5 to -0.7 |  |
| Lower cost |  | 6.1 |  | -0.9  |  | -1.1 to -0.7  |  |  |  |  4.0 | -1.4 | -1.6 to -1.2 |  |
| Rx-only |  | 36.6 |  | -0.9 |  | -1.6 to -0.2  |  |  |  | 34.0 | -0.6  | -1.5 to 0.2  |  |
| OTC |  | 7.5 |  | -1.6  |  | -1.8 to -1.4 |  |  |  |  4.7 | -2.8 | -3.0 to -2.6  |  |
| More Essential |  | 21.1 |  | -0.9 |  | -1.3 to -0.4  |  |  |  | 21.1 | -0.7 
 | -1.2 to -0.2 
 |  |
| Less Essential |  | 0.6 |  | 0.02  |  | -0.03 to 0.08 |  |  |  |  0.6 | 0.05 | -0.03 to 0.1 
 |  |

## Percentage Reduction in Annual Number of 30-Day Supplies Following Copay Increase

## Number of 30-Day SuppliesLow Medication Users

| Copay Group | Before
Increase
 | After
Increase | Difference | P-Value |
| --- | --- | --- | --- | --- |
| No Drugs
(N = 3,855)
 | 8.6 | 10.4 | 1.8 | < 0.001 |
| Some Drugs
(N = 30,356)
 | 7.3
 | 7.9 | 0.6
 | < 0.001 |
| All Drugs
(N = 10,535) | 8.2
 | 8.4 | 0.2 | 0.29
 |

## Number of 30-Day SuppliesModerately Low Medication Users

| Copay Group | Before
Increase | After
Increase | Difference
 | P-Value
 |
| --- | --- | --- | --- | --- |
| No Drugs
(N = 3,364) 
 | 33.2 | 38.2 | 5.0 | < 0.001 |
| Some Drugs
(N = 21,291)
 | 32.3
 | 34.2 | 1.9 | < 0.001
 |
| All Drugs
(N = 7,025)
   | 37.4
 | 38.2
 | 0.8 | 0.008
 |

## Number of 30-Day SuppliesModerately High Medication Users

| Copay Group | Before 
Increase | After 
Increase
 | Difference
 | P-Value |
| --- | --- | --- | --- | --- |
| No Drugs
(N = 5,418)
 | 61.7 | 66.1 | 4.4
 | < 0.001
 |
| Some Drugs
(N = 27,701)
   | 59.6
 | 58.1 | -1.5 | < 0.001
 |
| All Drugs
(N = 7,516) | 64.6 | 61.0
 | -3.6 | < 0.001
 |

## Number of 30-Day SuppliesHigh Medication Users

| Copay Group | Before
Increase | After
Increase
 |  Difference
 |  P-Value
 |
| --- | --- | --- | --- | --- |
| No Drugs
(N = 6,857)
   | 127.1 | 126.1
 | -1.0 | 0.31
 |
| Some Drugs
(N = 21,983)
   | 113.6 | 104.2 | -9.4 | < 0.001
 |
| All Drugs
(N = 3,109)
   | 109.0
 | 95.8
 | -13.2 | < 0.001
 |

## Change in Number of 30-Day Supplies After Copay By Medication User Groups

- NS = Not Significant;
-  for all other values
- P < 0.01

- NS

- NS

- Copays for
- No Drugs

- Copays for
- Some Drugs

- Copays for
- All Drugs

## Percent of Patients Discontinuing VA Pharmacy After Copay Increase 

- *

- *

- *

- *

- *

- *

*** P < 0.001**

## Percent of Patients Discontinuing VA Pharmacy After Copay Increase 

- *

- *

- *

- *

- *

- *

- *

- *

- *

- *

- *

*** P < 0.001**

## Discontinuation of VA Pharmacy UseOdds Ratios from Logistic Regression Analyses

| Copay Group | Copay for 
Some 
Medications |  | 95% CI | Copay for 
All
Medications
 |  | 95% CI
 |
| --- | --- | --- | --- | --- | --- | --- |
| All Chronic Drugs | 2.18*  | 2.01 to 2.35  |  |  | 2.43* | 2.22 to 2.65  |
| Rx-only Drugs | 2.18* | 2.02 to 2.36  |  |  | 2.37* | 2.17 to 2.59  |
| OTC Drugs | 2.44* | 2.32 to 2.57  |  |  | 3.97* | 3.74 to 4.21  |

- * P < 0.001

## Discontinuation of VA Pharmacy UseOdds Ratios from Logistic Regression Analyses

| Copay Group | Copay for 
Some 
Medications |  |  | 95% CI | Copay for 
All
Medications
 |  | 95% CI
 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Hypertension Drugs
(n=104,372) |  | 1.34*
  | 1.23 to 1.46 |  |  | 1.26*
 | 1.14 to 1.39 |
| Lipid Lowering Drugs (n=60,720) |  | 1.19*
  | 1.09 to 1.31 |  |  | 0.97
 | 0.87 to 1.08 |
| Diabetes Drugs (n=30,407) |  | 0.97
 | 0.82 to 1.15 
 |  |  | 0.94
 | 0.78 to 1.14 |
| Anti-coagulant Drugs (n=14,948)
 |  | 1.06 | 0.92 to 1.22 |  |  | 0.99 | 0.85 to 1.17 |

- * P < 0.001

## Discontinuation of VA Pharmacy UseOdds Ratios from Logistic Regression Analyses

| Copay Group | Copay for 
Some 
Medications |  |  | 95% CI | Copay for 
All
Medications
 |  | 95% CI
 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Angina Drugs (n=22,614) |  | 1.38*
 | 1.25 to 1.52 |  |  | 1.58* | 1.40 to 1.78 |
| Antiarrythmics (n=11,335) |  | 0.99 | 0.83 to 1.18 |  |  | 0.91 | 0.74 to 1.11 |
| Antipsychotics (n=9,174) |  | 2.11*
 | 1.87 to 2.39 |  |  | 2.39* | 1.88 to 3.05 |
| Antidepressants (n=9,935)
 |  | 1.89* | 1.60 to 2.25
 |  |  | 1.90*
  | 1.46 to 2.48 |

- * P < 0.001

## Conclusions

- For veterans subject to the copayment, the number of 30-day supplies from VA fell following the copayment increase
- The copayment increase had a larger effect as the number of different drugs that patients received increased
- E.g., for high medication users with copays for all drugs
- Copays increased > 300% annually
- ($218 to $670)
- Drug acquisition decreased 12%

## Conclusions

- Longer-term follow-up is needed to determine if the decrease in drug acquisition of moderately high or high medication users had adverse health effects

## Conclusions

- The copay increase had a relatively larger effect on acquisition of lower cost and OTC medications
- Charging veterans copayments for some drugs that is larger than they might pay elsewhere might lead veterans to obtain drugs from multiple pharmacies, limiting VA’s ability to monitor for drug-drug interactions or discontinuation

## Conclusions

- The copayment increase had a significant effect on the probability of discontinuing VA pharmacy use for all chronic medications, Rx-only and OTC medications, and for medications to treat chronic conditions including hypertension and depression
- If these medications are not obtained elsewhere there could be unintended consequences on health outcomes and overall health care costs