Increasing time costs and copayments for prescription drugs: an analysis of policy changes in a complex environment.

Over the past 20 years major advances in the pharmacological treatment of hypertension, diabetes, schizophrenia, and depression have led to improved outcomes in these and other chronic conditions (Gray et al. 2000; Pignone, Phillips, and Mulrow 2000; Chobanian et al. 2003; Conley et al. 2003; Sokol et al. 2005; Lee, Grace, and Taylor 2006; Rasmussen, Chong, and Alter 2007;), yet the cost of these treatments is high (Weideman et al. 2002; Kennedy, Coyne, and Sclar 2004; Sokol et al. 2005; Centers for Disease Control and Prevention 2009;). The growth of pharmaceutical spending in many of these chronic disease categories is particularly high in state Medicaid programs (Banthin and Miller 2006). The reasons for increasing pharmaceutical costs to Medicaid are manifold, and attempts to constrain them are common. Multiple strategies have been used by both public and private insurers, including prior authorization, formulary restrictions, tiered formularies with increased copayments for more expensive/nonpreferred medications, mail-order pharmacies, and restrictions of the number of days' supply (Soumerai et al. 1991; Berglin et al. 2003; Soumerai 2004; Ridley and Axelsen 2006; Chernew et al. 2008;). Cost-containment strategies have proven to be effective in altering patterns of care but often spill over to the use of other types of health services, including medication adherence and discontinuation, and hospital and nursing home use, especially in low-income populations or among those with chronic illnesses (Soumerai et al. 1987; Huskamp et al. 2003; Domino et al. 2004a; Hsu et al. 2006; Ridley and Axelsen 2006; Chernew and Newhouse 2008;). Individuals with limited benefits often have unfavorable clinical outcomes and lower adherence rates for hypertension, hyperlipidemia, and diabetes medications (Hsu et al. 2006). Yet the evidence about whether these strategies are net cost-saving, or even cost-effective, is scarce (Soumerai 2004). One restriction that many insurers use is to allow subscribers to fill only a month's supply of medications, even those that are used chronically. Currently, 41 out of 46 states for which information on days' supply restrictions were available restrict the days' supply in their Medicaid programs to 34 days or fewer.1 Such a strategy may be cost saving if patients undergo frequent medication changes mid-prescription resulting in the discard of unused portions (Domino et al. 2004b). However, once a patient has been established and the dose is titrated for chronic medications, drug doses generally remain stable (Basile 2003; Neuser et al. 2005; Mago 2008;) and adherence to consistent dosing is an important part of therapy. Despite the wide use of limited days' supply policies, little research has examined the use of these policies on pharmaceutical use and costs, and no literature yet contrasts the use of restricted days' supply policies over other demand-side efforts such as increased cost sharing. This paper examines a natural experiment in the North Carolina (NC) Medicaid program in which the allowed days' supply per prescription was decreased from 100 days to 34 days on July 1, 2001, followed by an increase in copayment for brand name drugs on October 1, 2001. We used similar individuals on Georgia Medicaid as a comparison group and examined both medication adherence and total Medicaid expenditures.