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The impact of cost-sharing on prescription drug demand: evidence from a double-difference regression kink design.

ABSTRACT: Pharmaceuticals represent the third-largest expenditure item in health care spending in the OECD countries, and cost growth is around 5% per year in many OECD countries. One possible way to contain the rise in pharmaceutical spending is the use of cost-sharing schemes that makes insured individuals directly bear parts of the cost of a drug. This study estimates the price sensitivity of demand for prescription drugs using data on all prescription drug purchases from a random sample of 400,000 Swedes followed from 2010 to 2013. We use a regression kink design (RKD) by exploiting the kinked Swedish cost-sharing scheme to assess the price elasticity. Further, since the cost-sharing scheme has changed over time, we also use a double-difference RKD to account for potential confounding nonlinearities around the kink. Our results indicate that the standard RKD results are biased and exaggerate the price sensitivity. Our preferred double-difference RKD specifications show no or minor price sensitivity (95% CI price elasticity from - 0.12 to 0.02). The results are similar in several sub-group analyses across age groups, sexes, and income quartiles.

SUBMITTER: Gamba S

PROVIDER: S-EPMC9666319 | biostudies-literature | 2022 Dec

REPOSITORIES: biostudies-literature

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The impact of cost-sharing on prescription drug demand: evidence from a double-difference regression kink design.

Gamba Simona S Jakobsson Niklas N Svensson Mikael M

The European journal of health economics : HEPAC : health economics in prevention and care 20220225 9

Pharmaceuticals represent the third-largest expenditure item in health care spending in the OECD countries, and cost growth is around 5% per year in many OECD countries. One possible way to contain the rise in pharmaceutical spending is the use of cost-sharing schemes that makes insured individuals directly bear parts of the cost of a drug. This study estimates the price sensitivity of demand for prescription drugs using data on all prescription drug purchases from a random sample of 400,000 Swe ...[more]

PMID: 35212886

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Project description:ImportanceIncreasing access to naloxone (an opioid antagonist that can reverse overdose) could slow the US opioid epidemic. Prior studies suggest cost sharing may be a barrier to dispensing of naloxone prescriptions, but these studies were limited by their cross-sectional designs and use of databases that do not capture prescriptions that are not filled (abandoned).ObjectiveTo evaluate the association between cost sharing and naloxone prescription abandonment (nondispensing of naloxone prescriptions).Design, setting, and participantsThis cross-sectional, regression discontinuity analysis exploited the fact that deductibles typically reset at the beginning of the year in commercial and Medicare plans. The included data were derived from the 2020-2021 IQVIA Formulary Impact Analyzer (a pharmacy transactions database that represents 63% of prescriptions at US pharmacies). The analysis included claims for naloxone nasal spray among commercially insured patients and Medicare patients that occurred during the 60 days before January 1, 2021, through 59 days after January 1, 2021.ExposureCost sharing, which is defined as the amount patients would have to pay to fill prescriptions.Main outcomes and measuresLocal linear regression models were used to assess for abrupt changes in cost sharing and the probability of prescription abandonment on January 1, 2021. To estimate the association between cost sharing and prescription abandonment, a fuzzy regression discontinuity analysis was conducted.ResultsThese analyses included naloxone claims for 71 306 commercially insured patients and 101 706 Medicare patients (40 019 [56.1%] and 61 410 [60.4%], respectively, were female). The commercially insured patients and Medicare patients accounted for 73 311 and 106 076 naloxone claims, respectively. On January 1, 2021, the mean cost sharing per claim increased by $15.0 (95% CI, $13.8-$16.2) for commercially insured patients and increased by $12.3 (95% CI, $10.9-$13.6) for Medicare patients and the probability of abandonment increased by 4.7 (95% CI, 3.2-6.2) percentage points and 2.8 (95% CI, 1.6-4.1) percentage points, respectively. The results from the fuzzy regression discontinuity analysis suggest a decision by commercial and Medicare plans to increase naloxone cost sharing by $10 would be associated with percentage-point increases of 3.1 (95% CI, 2.2-4.1) and 2.3 (95% CI, 1.4-3.2), respectively, in the probability of abandonment.ConclusionsThe elimination of cost sharing might be associated with increased naloxone dispensing to commercially insured and Medicare patients.

Project description:ObjectivesTo investigate the impact of no cost sharing on paediatric care on usage and health outcomes, and whether the effect varies by household income levels.DesignRegression discontinuity design.SettingNationwide medical claims database in Japan.ParticipantsChildren aged younger than 20 years from April 2018 to March 2022.ExposureCo-insurance rate that increases sharply from 0% to 30% at a certain age threshold (the threshold age varies between 6 and 20 years depending on region).Primary outcome measuresThe outpatient care usage (outpatient visit days and healthcare spending for outpatient care) and inpatient care (experience of any hospitalisation and healthcare spending for inpatient care).ResultsOf 244 549 children, 49 556 participants were in the bandwidth and thus included in our analyses. Results from the regression discontinuity analysis indicate that no cost sharing was associated with a significant increase in the number of outpatient visit days (+5.26 days; 95% CI, +4.89 to +5.82; p<0.01; estimated arc price elasticity, -0.45) and in outpatient healthcare spending (+US$369; 95% CI, +US$344 to +US$406; p<0.01; arc price elasticity, -0.55). We found no evidence that no cost sharing was associated with changes in inpatient care usage. Notably, the effect of no cost-sharing policy on outpatient healthcare usage was larger among children from high-income households (visit days +5.96 days; 95% CI, +4.88 to +7.64, spending +US$511; 95% CI, +US$440 to +US$627) compared with children from low-income households (visit days +2.64 days; 95% CI, +1.54 to +4.23, spending +US$154; 95% CI, +US$80 to +US$249).ConclusionsNo cost sharing for paediatric care was associated with a greater usage of outpatient care services, but did not affect inpatient care usage. The study found that this effect was more pronounced among children from high-income households, indicating that the no cost sharing disproportionately benefits high-income households and may contribute to larger disparities.

Project description:ImportanceOn January 1, 2022, New Mexico implemented a No Behavioral Cost-Sharing (NCS) law that eliminated cost-sharing for mental health and substance use disorder (MH/SUD) treatments in plans regulated by the state, potentially reducing a barrier to treatment for MH/SUDs among the commercially insured; however, the outcomes of the law are unknown.ObjectiveTo assess the association of implementation of the NCS with out-of-pocket spending for prescription for drugs primarily used to treat MH/SUDs and monthly volume of dispensed drugs.Design, settings, and participantsThis retrospective cohort study used a difference-in-differences research design to examine trends in outcomes for New Mexico state employees, a population affected by the NCS, compared with federal employees in New Mexico who were unaffected by NCS. Data were collected on prescription drugs for MH/SUDs dispensed per month between January 2021 and June 2022 for New Mexico patients with a New Mexico state employee health plan and New Mexico patients with a federal employee health plan. Data analysis occurred from December 2022 to January 2024.ExposureEnrollment in a state employee health plan or federal health plan.Main outcomes and measuresThe primary outcomes were mean patient out-of-pocket spending per dispensed MH/SUD prescription and the monthly volume of dispensed MH/SUD prescriptions per 1000 employees. A difference-in-differences estimation approach was used.ResultsThe implementation of the NCS law was associated with a mean (SE) $6.37 ($0.30) reduction (corresponding to an 85.6% decrease) in mean out-of-pocket spending per dispensed MH/SUD medication (95% CI, -$7.00 to -$5.75). The association of implementation of NCS with the volume of prescriptions dispensed was not statistically significant.Conclusions and relevanceThese findings suggest that the implementation of the New Mexico NCS law was successful in lowering out-of-pocket spending on prescription medications for MH/SUDs, but that there was no association of NCS with the volume of medications dispensed in the first 6 months after implementation. A key challenge is to identify policies that protect from high out-of-pocket spending while also promoting access to needed care.

Project description:IntroductionThe objective of this study was to measure the influence of differences in out-of-pocket (OOP) costs for type 2 diabetes (T2D) medications on within-patient adherence behavior towards combination drug therapy regimens.MethodsThis was an observational, retrospective, paired sample study in patients with T2D using longitudinal pharmacy data from the 2009-2014 Medical Expenditure Panel Survey (MEPS) augmented with socio-demographic factors. We took a within-patient approach to minimize confounding effects by including patients who maintained the same number of diabetes drug classes over 2 years of MEPS. For each patient, we selected the most and least costly drug classes in the second year and examined their corresponding adherence behavior measured by medication possession ratio. The primary hypothesis tested the significance of the correlation between magnitude of the OOP cost difference and behavioral response in adherence.ResultsAnalysis included 1189 patients representing over 4.2 million US residents with T2D. A significant negative correlation (p < 0.001) was observed between the differences of OOP costs and adherence to the most and least costly medications compared within patients. Reduction in adherence to the most costly medication was generally observed when the difference in OOP costs was greater than $33/month. A greater variability in adherence was observed when the cost difference exceeded $2.39/month as compared to other cost difference ranges (p < 0.001), indicative of choices being made.ConclusionsAs OOP costs increased, adherence variability increased initially until a cost threshold, beyond which the adherence to the more costly medication decreased. In addition to OOP cost, adherence was also influenced by type of medication and self-perception of health. Given the complex correlation between OOP costs and adherence to medication, we suggest a careful approach to cost-sharing in the current insurance drug design and relevant insurance policies.

Dataset Information

The impact of cost-sharing on prescription drug demand: evidence from a double-difference regression kink design.

Publications

The impact of cost-sharing on prescription drug demand: evidence from a double-difference regression kink design.

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