Effect of a Three-Tier Prescription Copay on Pharmaceutical and Other Medical Utilization

Abstract

In response to rising prescription drug costs, plan sponsors are increasingly implementing three-tiered pharmacy benefits. This study examined the effect of a three-tiered pharmacy benefit on pharmaceutical utilization and expenditures, medication continuation, and use of other medical resources in a population of continuously eligible, commercially insured enrollees of a preferred provider organization (PPO). A quasi-experimental prepost with comparison group design was used. The pre- and postperiods were each 12 months long. The intervention group included enrollees whose employer moved from the PPO's two-tier benefit to a three-tier benefit (n = 6881). The comparison group included enrollees whose employer remained under the PPO's two-tier benefit (n = 13,279). Key dependent variables included total prescription claims and costs, net costs (total minus copay), medication continuation, office visits, and inpatient and emergency room use. Relative to the comparison group, the intervention group experienced lower prescription utilization and expenditures and reduced net costs. Medication continuation rates were lower at 6 and 11 months in one of four chronic therapy classes examined; however, discontinuation could not be clearly linked to tier-three medication use. No significant differences in physician office visits, inpatient, or emergency room use rates were found. Three-tier prescription copays can control drug costs without evidence of change in use of other medical resources in the year following implementation. Future research should examine a variety of three-tier designs.