Prescription Abandonment and the Economic Effects of COVID-19

In April 2020, Americans have ample reason to worry about their health and welfare. The COVID-19 pandemic has turned upside down the economic climate of this country within 6 weeks, with longer-term effects that we can only begin to calculate.

One of the effects that has been on everyone’s minds is how this affects access to health care, related or not to the virus. Last week, Douglas Long, VP, Industry Relations, IQVIA, indirectly raised one extremely important aspect in his highly informative pharmaceutical trends update presentation at the annual meeting of the Academy of Managed Care Pharmacy. Conducted virtually this year during the Academy’s E-Learning Days, I was struck by one point in particular, on prescription abandonment.

We have understood for decades that as the out-of-pocket price of prescriptions increase, patient adherence and persistency decreases. This concept has been shown for the full range of fixed pharmacy copayments. For each $10 increment in cost sharing, Goldman and colleagues found that overall pharmaceutical costs increased up to 6% because of nonadherence. The reason is simple: People worry whether they should spend the money on medication or food, rent, or other things they consider of value.

Back in the 1990s, some form of cost sharing was deemed essential, because it gave health plan members “skin in the game.” If consumers had to contribute some amount of money towards therapy, they would hesitate to seek treatments that added little value. At that time, generic drugs may have been associated with a $2 to $5 copay, with preferred brands having $15 to $25 copays.

However, cost sharing in commercial plans increased steadily over the years, as health plans introduced annual changes to their benefit designs. In the early 2000s, the relationship between higher cost sharing and lower adherence was widely recognized. Beginning in 2006, the concept of value-based insurance design was championed by Fendrick and Chernow, which recognized that high-value medications should be associated with no copayment or some token amount to encourage patient adherence.

In the late 2000s and 2010s, patient cost sharing rose even more quickly, and greater deductibles (for medical care). Deductibles were introduced for pharmacy, and greater out-of-pocket charges were implemented at the pharmacy for generics (preferred generics and otherwise), brands (preferred and otherwise), and specialty drugs (preferred and otherwise). When pharmacy deductibles increase, this results in patients having even greater financial exposure; they no longer have the benefit of plans paying something towards the cost of therapy.

Besides falling persistency with the medical regimen, another important ramification of these sky high out-of-pocket costs is prescription abandonment. That is, patients, upon finding out what they owe for a medication, decide to leave it at the pharmacy counter. One note of importance though: even with zero cost sharing, some Medicare and commercial patients (< 10%) will not pick up their new prescription. The slide below from Mr. Long’s presentation tells a strong story. At a cost share level of $75 to $124, IQVIA data indicate that more than 40% of patients will skip the medication. And at many plans’ maximum per-prescription cost-sharing threshold of $150 or $200? The abandonment rate for new prescriptions is approximately 60%.

In other words (mine, not Mr. Long’s), if you want patients to access expensive medications, you will rely on pharmaceutical copay assistance to enable patients to afford it. Otherwise, what’s the point of covering the medication or utilizing such a benefit design?

The data presented by IQVIA were from 2018 prescription utilization. It would not be unreasonable to assume that the curve for medication abandonment rate is far steeper under the harsh economic conditions experienced by a large segment of the population today resulting from the COVID-19 pandemic. Of course, if several million more people newly qualify for Medicaid, this may be less of an issue; it would be associated with separate consequences, like the further erosion of employer-based health care.

As discussed previously, pharmaceutical companies offer wide access to their copay assistance programs or “coupons,” particularly for specialty drugs (biologics or biologics). In the COVID-19 era, one can assume that copay assistance will play an even greater role to stave off greater prescription abandonment rates and help support adherence efforts.