The Effect of Cost-Sharing on the Utilization of Prescription Drugs for Chronically Ill Patients

by Matthew D. Solomon

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In an effort to control rapidly rising drug costs, nearly all health plans have increased their cost-sharing requirements. The author explores the effect of cost-sharing on the initiation of and adherence to prescription drug therapy. He first examines the time to initiation of antihypertensive therapy for elderly patients with newly identified hypertension. Results indicate that lower plan generosity is associated with longer times between a patient’s first diagnosis and pharmacologic treatment. He next considers whether cost-sharing is associated with adherence or discontinuation of antihypertensive therapy for newly diagnosed patients who initiated therapy. Unlike the first analysis, plan generosity is not associated with the time until patients have gaps between subsequent prescriptions, nor with the proportion of days that a patient is covered with any antihypertensive therapy, nor with whether patients discontinue their medications entirely. Results suggest that a significant portion of the reduction in prescription drug utilization that is mediated by cost may occur when patients make the initial decision to pharmacologically treat a newly diagnosed chronic condition, but that cost-sharing may be less influential on utilization once patients have initiated therapy.

Table of Contents

  • Chapter One

    Introduction and Specific Aims

  • Chapter Two

    Background and Significance

  • Chapter Three

    Data and Methods

  • Chapter Four

    Initiation of Antihypertensive Therapy

  • Chapter Five

    Adherence to Antihypertensive Therapy

  • Chapter Six

    Conclusions and Policy Implications

  • Appendix

    Full Model Results

Research conducted by

This document was submitted as a dissertation in September 2005 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the Pardee RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of José J. Escarce (Chair), Dana P. Goldman, and Robert H. Brook.

This report is part of the RAND Corporation dissertation series. Pardee RAND dissertations are produced by graduate fellows of the Pardee RAND Graduate School, the world's leading producer of Ph.D.'s in policy analysis. The dissertations are supervised, reviewed, and approved by a Pardee RAND faculty committee overseeing each dissertation.

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