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

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Publication Date: September 2005

Publisher(s): Pardee Rand Graduate School

Author(s): Matthew D. Solomon

Topic: Health (Health services administration)

Type: Report


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.