BACKGROUND/RATIONALE:
The Veterans Millennium Health Care and Benefits Act of 1999 gave VA authority to increase the medication co-payment. Subsequently, VA raised the medication co-payment in February 2002 from $2 to $7 per 30-day prescription. The co-payment applies to veterans in priority categories 2-7 (veterans with less than 50% service-connected disability or non-service connected veterans) who obtain medications for non-service connected conditions and whose income is above a low-income threshold. Consequently, it is important to understand the impact of a co-payment increase.

OBJECTIVE(S):
In this study, we will examine the impact of the co-payment increase on drug acquisitions from VA both overall and over time. By examining the effect of the co-payment increase this study will inform policymakers about the impact of the co-payment increase on VA revenues and on patient care. Our primary objectives for this study are to describe the extent to which veterans receiving medications from VA are exempt or not exempt from medication co-payments and to compare the demographic characteristics, healthcare utilization, and comorbidities of veterans who were exempt and not exempt from the medication co-payment; to measure the change in the quantity of VA pharmaceuticals obtained following the increase in the co-payment both overall and over time; to determine whether veterans are discontinuing use or decreasing intensity of use of VA pharmacy due to the co-payment increase; and to determine whether the co-payment increase had a differential impact on specific categories of VA pharmaceuticals (generic drugs versus brand drugs, over-the-counter versus prescription only, more essential versus less essential drugs, and drugs for the treatment of symptomatic versus non-symptomatic conditions) both overall and over time.

METHODS:
To assess the effect of the co-payment change on overall VA drug acquisitions and use of VA pharmacy, we will conduct a retrospective cohort analysis of VA administrative data, using a random sample of veterans using VA healthcare prior to the co-payment increase. To examine the impact of the co-payment increase on patient care, we will compare the effect of the co-payment increase on specific categories of medications where the co-payment change may have a differential impact.

FINDINGS/RESULTS:
Preliminary analyses indicate that following the copayment increase, the number of 30-day supplies of medications fell by 4% (95% CI: -6% to -2%; P <0.001) among veterans subject to copayments for all medications relative to veterans with no copayments. The number of lower-cost medications fell by 25% (95% CI: -28% to -21%; P <0.001), while higher-cost medications fell by 4% (95% CI: -6% to -2%; P =0.001). The number over-the-counter medications fell by 44% (95% CI: -47% to -41%; P <0.001), while prescription-only medications fell by 2% (95% CI: -4% to 1%; P =0.2). The number of essential medications fell by 3% (95% CI: -1.2 to -0.1; P =0.02); however, there was no significant change in the number of non-essential medications.

IMPACT:
We anticipate that this study will inform VA policymakers about the impact of co-payment changes on overall pharmaceutical utilization in the VA, on utilization of specific types of drugs, and on potential changes in VA revenues from the co-payment change. Understanding the impact of the current co-payment change will provide crucial information to VA policymakers as future changes in the co-payment structure are considered and implemented.

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External Links for this Project

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PUBLICATIONS:

Journal Articles

1. Stroupe KT, Smith BM, Lee TA, Tarlov E, Durazo-Arvizu R, Huo Z, Barnett T, Cao L, Burk M, Cunningham F, Hynes DM, Weiss KB. Effect of increased copayments on pharmacy use in the Department of Veterans Affairs. Medical care. 2007 Nov 1; 45(11):1090-7. [view]

Conference Presentations

1. Stroupe KT, Smith B, Lee TA, Durazo-Arvizu R, Cao L, Nydam T. Medication Copay Increase and Medication Acquisition from the VA. Poster session presented at: VA HSR&D National Meeting; 2005 Feb 1; Baltimore, MD. [view]
2. Smith B, Stroupe KS, Lee TA, Durazo-Arvizu R, Cao L, Nydam T. The Impact of Co-Payment Change on Discontinuation of VA Pharmacy Use. Poster session presented at: VA HSR&D National Meeting; 2005 Feb 1; Baltimore, MD. [view]
3. Smith BM, Stroupe KT, Tarlov E, Lee TA, Huo Z. The Impact of the VA Medication Copayment Increase on Medicare and VA Outpatient Utilization. Poster session presented at: VA HSR&D National Meeting; 2008 Feb 14; Baltimore, MD. [view]

DRA: Health Systems
DRE: Epidemiology
Keywords: none
MeSH Terms: none