Pharmacy Benefit Caps and the Chronically Ill

Published in: Health Affairs, v. 26, no. 5, Sep./Oct. 2007, p. 1333-1343

Posted on RAND.org on December 31, 2006

by Geoffrey F. Joyce, Dana P. Goldman, Pinar Karaca-Mandic, Yuhui Zheng

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In this paper the authors examine medication use among retirees with employer-sponsored drug coverage both with and without annual benefit limits. The authors find that pharmacy benefit caps are associated with higher rates of medication discontinuation across the most common therapeutic classes and that only a minority of those who discontinue use reinitiate therapy once coverage resumes. Plan members who reach their cap are more likely than others to switch plans and increase their rate of generic use; however, in most cases, the shift is temporary. Given the similarities between these plans and Part D, the authors make some inferences about reforms for Medicare.

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