Effects of an increase in prescription copayment on utilization of low-sedating antihistamines and nasal steroids

BACKGROUND: Health plans are using 3-tier copayment designs and other methods to control utilization that shifts drug costs to plan members. There is a need to determine the effects of increased member cost sharing on drug utilization and drug costs. OBJECTIVE: To assess the impact of a $10 increase in prescription copayment in a public employer health plan for 2 classes of drugs used for allergic rhinitis. METHODS: Changes in the number of prescriptions dispensed for 2 therapeutic classes low-sedating antihistamines (LSAs) and nasal steroids (NSs) were examined 1 year prior to and 1 year after copayment increase. Relative price effects were measured as arc price elasticity, the ratio of the percent change in prescription utilization over the percent change in price, an indicator of how responsive patients are to the copayment increase. RESULTS: Of 8,643 continuously enrolled health plan beneficiaries, 2,150 patients (24.8%) received at least 1 NS or LSA during the 2-year period of the study, from January 1, 1998, through December 31, 1999. An average $10 increase in copayment per prescription was associated with no statistically significant change in utilization of combined LSA and NS prescriptions, 2.89 per patient in 1998 and 2.94 in 1999 (P = 0.597). Health plan costs for study drugs, unadjusted for inflation, decreased by 16.3% from $86.86 per patient in 1998 to $72.68 in 1999 (P = 0.004). Health plan costs per patient per month (PPPM) for all drugs for the 2,150 allergic rhinitis patients decreased by 13% from $41.33 PPPM in 1998 to $35.93 in 1999 (Pless than0.001), and health plan drug costs for all 8,643 members decreased by 13% from $14.93 per member per month (PMPM) in 1998 to $12.99 in 1999 (Pless than0.001). The actual average copayment increase was $7.23 (a 41% increase) for LSAs, which was associated with a 14.8% increase in utilization of LSAs and an 11.8% increase in the number of patients using LSAs; the number of LSA prescriptions per patient per year was unchanged at 2.68 in 1999 versus 2.61 in 1998 (P = 0.429). The actual average copayment increase was $10.98 (71%) for NSs, which was associated with an 11.3% decrease in utilization of NSs and a 10.2% decrease in the number of users of nasals steroids in 1999; the number of nasal steroid prescriptions per patient per year was unchanged at 2.05 in 1999 versus 2.07 in 1998 (P = .842). The combined utilization of LSA and NS prescriptions increased by 8.9% following the increase in copayments for these 2 therapeutically interchangeable drugs for allergic rhinitis. LSA prescriptions were less elastic, with an unadjusted arc elasticity of 0.39, while nasal steroid prescriptions were more responsive to the copayment change, with an unadjusted arc elasticity of .0.22. CONCLUSIONS: An average $10 increase in patient cost sharing per prescription (46.9% copayment increase) was associated with an increase in combined utilization of 2 drug classes used for allergic rhinitis (LSAs and NSs) but no change in the number of prescriptions per patient. Health plan costs decreased significantly for allergic rhinitis drugs, all drugs used by allergic rhinitis patients, and all drugs used by continuously enrolled health plan members. NSs exhibited a greater arc price elasticity compared with low-sedating oral antihistamines