Modeling the Potential Impact of a Prescription Drug Copayment Increase on the Adult Asthmatic Medicaid Population

Objectives The Commonwealth of Massachusetts increased the copayment for prescription drugs by $1.50 for Medicaid (MassHealth) beneficiaries in 2003. We sought to determine the likely health outcomes and cost shifts attributable to this copayment increase using the example of inhaled corticosteroids (ICS) use among adult asthmatic Medicaid beneficiaries. Method We compared the predicted costs and health outcomes projected over a 1-year time horizon with and without the increase in copayment from the perspective of MassHealth, providers, pharmacies, and MassHealth beneficiaries by employing decision analysis simulation model. Results In a target population of 17,500 adult asthmatics, increased copayments from 50¢ to $2.00 would result in an additional 646 acute events per year, caused by increased drug nonadherence. Annual combined net savings for the state and federal governments would be $2.10 million. Projected MassHealth savings are attributable to both decreased drug utilization and lower pharmacy reimbursement rates; these more than offset the additional costs of more frequent acute exacerbations. Pharmacies would lose $1.98 million in net revenues, MassHealth beneficiaries would pay an additional $0.28 million, and providers would receive additional $0.16 million. Conclusion Over its first year of implementation, increase in the prescription drug copayment is expected to produce more frequent acute exacerbations among asthmatic MassHealth beneficiaries who use ICS and to shift the financial burden from government to other stakeholders.