Pharmacy Deductible Impacts

As greater cost-sharing spreads throughout health benefit designs, drug coverage is not immune.  First it was multi-tier copays and now we are seeing the emergence of high deductibles applicable to medication benefits, a topic which is analyzed in a new report from the IMS Institute for Healthcare Informatics.  (IMS Report)   A deductible means the patient pays all costs for care up to a certain dollar amount.  In the case of high deductible plans this amount can be as much as $5000 or more.  For many plans, the deductible did not apply to drug benefits, which usually were subject to copays.  Now more plans are including medications under the deductible and around 10%, according to IMS, have a specific drug deductible.  IMS estimates that 46% of plans now have a deductible applying to pharmaceuticals.  Even after a deductible is met, copays may apply, until the patient meets the out-of-pocket maximum, which federal law currently sets at $6850 for an individual in 2016.  To mitigate the impact of higher cost-sharing on patients who would otherwise be their customers, many drug manufacturers hand out copay cards, which make up for this cost.  Why the federal fraud and abuse regulators allow this is beyond me, since the cards are often used with high-priced brand name drugs, often with low value.

IMS’ data suggests that about 8% of brand-name prescriptions were fully paid for by patients in 2014 because they have not met a deductible, but there is significant variation in this percent across the country.  This is up from about 6.4% in 2013.  There is also great variation by therapeutic category, with respiratory drugs, for example, at 8% of prescriptions, but anti-diabetic agents at 2.5%.  The impact of deductibles is also seen in the timing of patient full-pay claims, with many more occurring in the first months of a year, before deductibles are met.  The decrease over the year may also reflect patients who because of the cost stop filling prescriptions. About a third of patients with a deductible reached the limit in 2014, usually in the second or third quarter of the year.  For branded drugs, patients with a deductible had cost-sharing of $100 or more on an astounding 32% of claims.  That is a big deterrent to compliance.  And abandonment rates–patients not picking up a prescribed drug at the pharmacy–are 60% higher for patients with a deductible who were prescribed a brand drug than for patients without a deductible.  And these patients stop refilling prescriptions more frequently, about 75% stop doing so compared to 40% in regular plans.  Patients who were active users of diabetes or respiratory medications were 7% less likely to keep using those drugs when they switched from a non-deductible plan to a deductible one, compared to patients who stayed on a non-deductible design.  Generic drugs, which are typically much lower in cost, do not show the same patterns and use, abandonment and persistence are similar among both deductible and non-deductible plan members.  Copay cards ameliorate some of this effect and are more likely used by patients with a deductible.  The report is troubling because while we want patients to feel responsible for the costs of their health care and to be incented to stay in good health, it again appears as though cost-sharing can lead to behavior which does not lead to the best health outcomes.