1. Effect of Increased Copayments on Pharmacy Use in the Department of Veterans Affairs Kevin T. Stroupe, PhD 1,2,3,4 1 Midwest Center for Health Services & Policy Research, Hines VA Hospital, Hines, IL 2 Cooperative Studies Program Coordinating Center, Hines VA Hospital, Hines, IL 3 VA Information Resource Center, Hines VA Hospital, Hines, IL 4 Northwestern University Feinberg School of Medicine, Chicago, IL

2. Collaborators Bridget M. Smith, PhD 1 Todd A. Lee, PharmD, PhD 1,3 Ramon Durazo-Arvizu, PhD 1 Elizabeth Tarlov, PhD 1,4 Lishan Cao, MS 3 Zhiping Huo, MS 3 Tammy Barnett, MA 1,2 Denise Hynes, PhD, RN 1,4 Kevin Weiss, MD 1,3 1 Midwest Center for Health Services & Policy Research, Hines, IL 2 Cooperative Studies Program Coordinating Center, Hines, IL 3 Northwestern University Feinberg School of Medicine, Chicago, IL 4 VA Information Resource Center, Hines, IL

3. Background In 2001, VA spent over $3 billion on outpatient medications In 2001, VA spent over $3 billion on outpatient medications As in the private sector, the VA has increased cost sharing by patients As in the private sector, the VA has increased cost sharing by patients

4. Background February 4, 2002 VA raised the medication copayment from $2 to $7 per 30-day supply February 4, 2002 VA raised the medication copayment from $2 to $7 per 30-day supply This increase was the first change in the copayment amount for medications since the copayment was instituted in 1990 This increase was the first change in the copayment amount for medications since the copayment was instituted in 1990

5. Study Objectives To examine the association of the copayment increase with medication acquisition from VA pharmacies To examine the association of the copayment increase with medication acquisition from VA pharmacies –For all chronic medications –For specific categories of medications To examine the association of the copayment increase with medication acquisition for higher and lower pharmacy users To examine the association of the copayment increase with medication acquisition for higher and lower pharmacy users

6. Study Objectives To examine rates of discontinuation of VA pharmacy use To examine rates of discontinuation of VA pharmacy use – For all chronic medications, over-the-counter (OTC) medications, and prescription only medications –For medications to treat common chronic conditions

7. Setting: Medication Copayments in VA Veterans may obtain both Rx-only medications and OTC medications from VA pharmacies Veterans may obtain both Rx-only medications and OTC medications from VA pharmacies –All medications require a prescription from VA –The same copayment applies to Rx-only and OTC medications Veterans are not subject to copayments for supplies (e.g., gauze) from the VA pharmacy Veterans are not subject to copayments for supplies (e.g., gauze) from the VA pharmacy

8. Setting: Medication Copayments in VA Veterans are subject to the copayment depending on their VA Priority category (1 though 8), Veterans are subject to the copayment depending on their VA Priority category (1 though 8), –which were established to manage access to VA care in relation to VA’s resources

9. Setting: Medication Copayments in VA Veterans in Priority 1 Veterans in Priority 1 –have a service-connected condition that is 50% or more disabling –are exempt from drug copayments

10. Setting: Medication Copayments in VA Veterans in Priorities 2 through 6 Veterans in Priorities 2 through 6 –have service-connected conditions <50% disabling, low incomes, or other recognized statuses (e.g., former POW) –are exempt from copayments for drugs for their service-connected disabilities –have a cap on their out-of-pocket medication spending set at $840 annually (increased to $960 in 2006)

11. Setting: Medication Copayments in VA Veterans in Priorities 7 and 8 Veterans in Priorities 7 and 8 –are subject to copayments for all drugs –have no cap on their annual out-of-pocket prescription copayments

12. Setting: Medication Copayments in VA Veterans may have copayments for No Drugs No Drugs –Priority Category 1 Some Drugs Some Drugs –Priority Categories 2 - 6 All Drugs All Drugs –Priority Categories 7 - 8

13. Study Design Retrospective observational study using data from national VA databases Retrospective observational study using data from national VA databases We examined medication acquisition of patients from VA in the 1-year periods We examined medication acquisition of patients from VA in the 1-year periods –before (February 4, 2001 to February 3, 2002) and –after (February 4, 2002 to February 4, 2003) the copayment increase

14. Study Sample 5% random sample of male VA users in fiscal year (FY) 2001 5% random sample of male VA users in fiscal year (FY) 2001 To ensure that differences in medication acquisition before and after the copayment increase were not due to length of time in the study, we restricted sample to To ensure that differences in medication acquisition before and after the copayment increase were not due to length of time in the study, we restricted sample to –veterans who used VA inpatient or outpatient services in the 1-year period before the study –veterans who were alive at the end of the study period

15. Study Timeline BeforeStudy PrePeriodPostPeriod Copayment Change February 4, 2002 Study Period February 4, 2003 February 4, 2001 February 4, 2000

16. Study Sample ~4 million VA users in fiscal year 2001 5% random sample of male VA users 207,298 Male veterans in study cohort 149,010 Eliminated: 2,075 who died before study period2,075 who died before study period 7,318 non-veterans7,318 non-veterans 36,062 with no VA use before study period36,062 with no VA use before study period 10,384 who died during study period10,384 who died during study period 2,449 with missing data2,449 with missing data Copays for No Drugs (Priority 1) 19,494 (13%) Copays for Some Drugs (Priority 2 – 6) 101,331 (68%) Copays for All Drugs (Priority 7 – 8) (Priority 7 – 8) 28,185 (19%)

17. Data Sources for Study VA Pharmacy Benefit Management (PBM) Database VA Pharmacy Benefit Management (PBM) Database –Used to obtain: Medication acquisition 1 year before and after copayment increase (Feb 4, 2001 – Feb 4, 2003) VA National Patient Care Database (NPCD) Medical SAS Datasets VA National Patient Care Database (NPCD) Medical SAS Datasets –Used to obtain: Patient characteristics e.g., age, race, etc. e.g., age, race, etc. VA Enrollment file VA Enrollment file –Used to obtain: Veteran priority category

18. Pharmacy Utilization VA copayment applies to each 30-day supply or less VA copayment applies to each 30-day supply or less We calculated the number of 30-day equivalent supplies by dividing the day’s supply as dispensed by 30 We calculated the number of 30-day equivalent supplies by dividing the day’s supply as dispensed by 30 –e.g., one prescription with an 90-day supply dispensed became three 30-day equivalent supplies We considered a prescription with <30-day supply as one 30-day supply because the full copayment applies to these prescriptions We considered a prescription with <30-day supply as one 30-day supply because the full copayment applies to these prescriptions

19. Pharmacy Utilization Patients may obtain drugs from VA to treat chronic conditions (e.g., hypertension) or for short-term conditions (e.g., infections) Patients may obtain drugs from VA to treat chronic conditions (e.g., hypertension) or for short-term conditions (e.g., infections) Because changes in acquisition of drugs for chronic conditions could affect the long-term management and consequences of these conditions, Because changes in acquisition of drugs for chronic conditions could affect the long-term management and consequences of these conditions, –we focused on drugs for chronic rather than acute conditions

20. Pharmacy Utilization To exclude medications that were likely to be used on a short-term basis To exclude medications that were likely to be used on a short-term basis –we removed any type of drug that the patient did not receive at least one 30-day supply before or after the copayment increase

21. Pharmacy Use Categories We divided patients into higher and lower pharmacy use groups based on the number of different medications patients received before the copayment increase We divided patients into higher and lower pharmacy use groups based on the number of different medications patients received before the copayment increase

22. Pharmacy Use Categories Based on quartiles of the number different medications, we grouped patients as Based on quartiles of the number different medications, we grouped patients as –low medication users (≤ 3 medications) –moderately low users (4 – 6 medications), –moderately high users (7 – 11 medications) – and high users (> 11 medications)

23. Medication Categories All chronic medications: All chronic medications: –Medications with al least one 30-day supply

24. Medication Categories Higher and lower-cost medications Higher and lower-cost medications –medications with a retail cost more or less than the copayment –Based on adjusted Average Wholesale Price OTC and Rx-only medications OTC and Rx-only medications –Based on indicator variables in the database

25. Medication Categories More and less essential medications More and less essential medications –Medications that prevented deterioration in health, prolonged life, and were not likely to be prescribed without a definitive diagnosis –Medications were that could relieve symptoms without affecting the underlying disease process –Based on modified lists from WHO that have been used in previous studies

26. Medication Categories Medications for chronic conditions Medications for chronic conditions –These medications included: anti-hypertensives, lipid lowering agents, anti-coagulants, diabetes medications, antiarrhythmics, antianginals, antidepressants, and antipsychotics –To ensure that antidepressant users were not receiving them on only a short-term basis, we restricted antidepressant users to »Patients with Dx of depression during the 2 years prior to the copayment increase »Who were using an antidepressant at the beginning of the study period

27. Analysis To examine the effect of the copayment on the number of 30-day supplies in the 1-year periods before and after the copayment increase To examine the effect of the copayment on the number of 30-day supplies in the 1-year periods before and after the copayment increase –We used zero-inflated negative binomial count models –controlling for age, race, comorbidities, insurance status, distance, and socio- economic status

28. Analysis To determine the impact of the copayment increase on medication acquisition from the VA, To determine the impact of the copayment increase on medication acquisition from the VA, –we used the natural experiment that occurred when the copayment was increased for certain veterans Veterans with no copays were ‘control’ group Veterans with no copays were ‘control’ group Veterans with copays for some or all medications were ‘experimental’ groups Veterans with copays for some or all medications were ‘experimental’ groups

29. Analysis We used a difference-in-differences approach to We used a difference-in-differences approach to –estimate the change in number of 30-day supplies after the increase for veterans subject to the copayment relative to –the change in number of 30-day supplies after the increase for veterans with no copayments

30. Analysis Advantage of difference-in-differences method: Advantage of difference-in-differences method: –any change in control group’s medication acquisition reflects changes unrelated to the copayment –while any change in the experimental groups’ medication acquisitions reflects both the (same) naturally occurring change plus the impact of the copayment change

31. Analysis To implement the difference-in-differences estimator, we specified the conditional mean number of 30-day prescriptions from VA as To implement the difference-in-differences estimator, we specified the conditional mean number of 30-day prescriptions from VA as E(y it |x it ) = (1-q it ) exp(β 0 + β 1 Some_copay it + β 2 All_copay it + β 3 Post t + β 4 [Some_copay it  Post t ] + β 5 [All_copay it  Post t ] +  ′z it ) Where: Some_copay it is an indicator that patient i was subject to the copayment for some medications in period t, the copayment for some medications in period t, All_copay it is an indicator that the patient was subject to the copayment for all medications, copayment for all medications, Post t is an indicator whether the copayment increase was applicable in period t, applicable in period t, Some_copay it  Post t and All_copay it  Post t indicate patients subject to the copayment after the copayment increase z it are other patient characteristics z it are other patient characteristics

32. Analysis To examine the impact of copay increase on discontinuation of VA pharmacy services (for all chronic medications, Rx-only medications, OTC medications, and medications for specific conditions), To examine the impact of copay increase on discontinuation of VA pharmacy services (for all chronic medications, Rx-only medications, OTC medications, and medications for specific conditions), –we used multivariable logistic regression models to examine the probability of discontinuing VA pharmacy use for medications after the copayment increase For all models, the veterans with no medication copayments were the reference group For all models, the veterans with no medication copayments were the reference group

33. Analysis For each logistic regression model, we included only patients who had a prescription for the type of medication being examined For each logistic regression model, we included only patients who had a prescription for the type of medication being examined

34. Patient Characteristics by Copay Category Copays for No Drugs No Drugs N = 19,620 Copays for Some Drugs N = 102,643 Copays for All Drugs N = 28,720 Age, mean  SD, years 59  14 61  14 66  12 Black, % 13145 Married, % 625070 Distance to closest VA, mean  SD, miles 46  104 41  83 42  68 Hierarchical Condition Category, mean  SD, Score 0.90  0.77 0.78  0.70 0.65  0.48 VA insurance coverage only, % 514925 Median Income in Zip Code $40,000$45,000$48,000

35. Monthly 30-Day Supplies All Chronic Drugs Copay Increase

36. Adjusted Change in Number of 30-Day Supplies Annually After Copay Increase All Chronic Drugs Copays for Some Drugs N = 102,643 Copays for All Drugs N = 28,720 Mean Number of 30-Day Supplies Change in 30-Day Supplies 95% CI Mean Number of 30-Day Supplies Change in 30-Day Supplies 95% CI All Chronic Drugs 46.9-2.1 -3.0 to -1.3 41.2-1.9 -2.9 to -0.9

37. Adjusted Change in Number of 30-Day Supplies Annually After Copay Increase Copays for Some Drugs N = 101,331 Copays for All Drugs N = 28,185 Mean Number of 30-Day Supplies Change in 30-Day Supplies 95% CI Mean Number of 30-Day Supplies Change in 30-Day Supplies 95% CI Higher cost 40.0-1.6 -2.3 to -0.9 36.3-1.6 -2.5 to -0.7 Lower cost 6.1-0.9 -1.1 to -0.7 4.0 4.0-1.4 -1.6 to -1.2 Rx-only36.6-0.9 -1.6 to -0.2 34.0-0.6 -1.5 to 0.2 OTC7.5-1.6 -1.8 to -1.4 4.7 4.7-2.8 -3.0 to -2.6 More Essential 21.1-0.9 -1.3 to -0.4 21.1-0.7 -1.2 to -0.2 Less Essential 0.60.02 -0.03 to 0.08 0.6 0.60.05 -0.03 to 0.1

38. Percentage Reduction in Annual Number of 30- Day Supplies Following Copay Increase

39. Number of 30-Day Supplies Low Medication Users Copay Group BeforeIncreaseAfterIncreaseDifferenceP-Value No Drugs (N = 3,855) 8.610.41.8 < 0.001 Some Drugs (N = 30,356) 7.37.90.6 < 0.001 All Drugs (N = 10,535) 8.28.40.20.29

40. Number of 30-Day Supplies Moderately Low Medication Users Copay Group BeforeIncreaseAfterIncreaseDifferenceP-Value No Drugs (N = 3,364) 33.238.25.0 < 0.001 Some Drugs (N = 21,291) 32.334.21.9 < 0.001 All Drugs (N = 7,025) 37.438.20.80.008

41. Number of 30-Day Supplies Moderately High Medication Users Copay Group BeforeIncreaseAfterIncreaseDifferenceP-Value No Drugs (N = 5,418) 61.766.14.4 < 0.001 Some Drugs (N = 27,701) 59.658.1-1.5 < 0.001 All Drugs (N = 7,516) 64.661.0-3.6 < 0.001

42. Number of 30-Day Supplies High Medication Users Copay Group BeforeIncreaseAfterIncrease Difference Difference P-Value P-Value No Drugs (N = 6,857) 127.1126.10.31 Some Drugs (N = 21,983) 113.6104.2-9.4 < 0.001 All Drugs (N = 3,109) 109.095.8-13.2 < 0.001

43. Change in Number of 30-Day Supplies After Copay By Medication User Groups NS = Not Significant ; for all other values P < 0.01 NS Copays for No Drugs Copays for Some Drugs Copays for All Drugs

44. Percent of Patients Discontinuing VA Pharmacy After Copay Increase **** * * * P < 0.001

45. Percent of Patients Discontinuing VA Pharmacy After Copay Increase * ** * * * * * * * * * P < 0.001

46. Discontinuation of VA Pharmacy Use Odds Ratios from Logistic Regression Analyses Copay Group Copay for SomeMedications 95% CI Copay for AllMedications 95% CI All Chronic Drugs 2.18* 2.01 to 2.35 2.43* 2.22 to 2.65 Rx-only Drugs 2.18* 2.02 to 2.36 2.37* 2.17 to 2.59 OTC Drugs 2.44* 2.32 to 2.57 3.97* 3.74 to 4.21 * P < 0.001

47. Discontinuation of VA Pharmacy Use Odds Ratios from Logistic Regression Analyses Copay Group Copay for SomeMedications 95% CI Copay for AllMedications 95% CI Hypertension Drugs (n=104,372)1.34* 1.23 to 1.46 1.26* 1.14 to 1.39 Lipid Lowering Drugs (n=60,720) 1.19* 1.09 to 1.31 0.97 0.87 to 1.08 Diabetes Drugs (n=30,407) 0.97 0.82 to 1.15 0.94 0.78 to 1.14 Anti-coagulant Drugs (n=14,948) 1.06 0.92 to 1.22 0.99 0.85 to 1.17 * P < 0.001

48. Discontinuation of VA Pharmacy Use Odds Ratios from Logistic Regression Analyses Copay Group Copay for SomeMedications 95% CI Copay for AllMedications 95% CI Angina Drugs (n=22,614) 1.38* 1.25 to 1.52 1.58* 1.40 to 1.78 Antiarrythmics (n=11,335) 0.99 0.83 to 1.18 0.91 0.74 to 1.11 Antipsychotics (n=9,174) 2.11* 1.87 to 2.39 2.39* 1.88 to 3.05 Antidepressants (n=9,935) 1.89* 1.60 to 2.25 1.90* 1.46 to 2.48 * P < 0.001

49. Conclusions For veterans subject to the copayment, the number of 30-day supplies from VA fell following the copayment increase For veterans subject to the copayment, the number of 30-day supplies from VA fell following the copayment increase The copayment increase had a larger effect as the number of different drugs that patients received increased The copayment increase had a larger effect as the number of different drugs that patients received increased E.g., for high medication users with copays for all drugs E.g., for high medication users with copays for all drugs –Copays increased > 300% annually ($218 to $670) –Drug acquisition decreased 12%

50. Conclusions Longer-term follow-up is needed to determine if the decrease in drug acquisition of moderately high or high medication users had adverse health effects Longer-term follow-up is needed to determine if the decrease in drug acquisition of moderately high or high medication users had adverse health effects

51. Conclusions The copay increase had a relatively larger effect on acquisition of lower cost and OTC medications The copay increase had a relatively larger effect on acquisition of lower cost and OTC medications Charging veterans copayments for some drugs that is larger than they might pay elsewhere might lead veterans to obtain drugs from multiple pharmacies, limiting VA’s ability to monitor for drug-drug interactions or discontinuation Charging veterans copayments for some drugs that is larger than they might pay elsewhere might lead veterans to obtain drugs from multiple pharmacies, limiting VA’s ability to monitor for drug-drug interactions or discontinuation

52. Conclusions The copayment increase had a significant effect on the probability of discontinuing VA pharmacy use for all chronic medications, Rx-only and OTC medications, and for medications to treat chronic conditions including hypertension and depression The copayment increase had a significant effect on the probability of discontinuing VA pharmacy use for all chronic medications, Rx-only and OTC medications, and for medications to treat chronic conditions including hypertension and depression If these medications are not obtained elsewhere there could be unintended consequences on health outcomes and overall health care costs If these medications are not obtained elsewhere there could be unintended consequences on health outcomes and overall health care costs