NCPA - National Center for Policy Analysis

Drug Cost-sharing Increases Adverse Events Among Poor and Elderly

January 26, 2001

Requiring enrollees in public health programs to pay part of the cost of medications, referred to as "cost-sharing," is a way to reduce the use of unnecessary medications as well as raise revenue to offset drug costs. However, a new study found this practice could lead to an increase in "adverse events" including emergency room visits.

Canadian researchers assessed the impact of drug cost-sharing on health outcomes by analyzing data from 93,950 elderly persons and 55,333 welfare recipients 32 months before and 17 months after a cost-sharing policy was introduced. Separate pre-policy control groups and post-policy cohort studies were used to evaluate the policy's effect on adverse events.

  • After introduction of the policy, essential and less essential drug use decreased by 9.12 percent and 15.14 percent, respectively, in elderly persons.
  • In welfare recipients, a 14.42 percent reduction in essential drug use and a 22.39 percent reduction in less essential drug use were noted.
  • The reductions in essential drug use led to a 14.2 and 54.2 increase in emergency department visits per 10,000 person-months in elderly persons and welfare recipients, respectively.
  • Net increases of 6.8 and 12.9 serious adverse events per 10,000 person-months occurred in the elderly and welfare populations, respectively.

The cost sharing for the welfare recipients took the form of small monthly deductible (less than C$20) and a 25 percent copayment up to an annual maximum of C$200.

The researchers note that the cost effectiveness of cost-sharing depends on the ability of individuals to pay for essential drugs and make informed choices about which drugs to forgo. Otherwise, short-term savings on drug costs may be offset by downstream treatment costs that could have been prevented.

Source: Robyn Tamblyn, et al., "Adverse Events Associated With Prescription Drug Cost-Sharing Among Poor and Elderly Persons," Journal of the American Medical Association, January 23-31, 2001.


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