Insight

Should Drugs Be Free?

This is a common debate, especially within the context of value based design. There are two reasons to consider for reducing drug co-pays. First is the belief that reducing cost barriers will increase adherence and second, the belief that it will incent people to move to generics or mail order pharmacy.

The debate on the merits of co-pay reduction to drive adherence continues to be tested in an effort to identify the appropriate incentive to address chronically ill individuals. Statistics support the theory that the waiver or reduction of co-pays improves first-fill adherence and increases generic conversion. Opponents site the need for personal accountability, offering the argument that almost 80% of chronic conditions are attributable to lifestyle (i.e. poor health choices and habits) and therefore, individuals should have some “skin in the game” when it comes to paying the cost medicines as a result of those choices.

In the quest to identify the right incentive lever to increase medication adherence, United Healthcare is launching a new program. The “Refill & Save program” is taking a different approach to adherence by rewarding participants for compliant behavior in the form of reduced co-pays on all prescription refills consistently filled.

In this case, United will pay patients $20 for a 30 day supply and $50 for mail order pharmacy for every refill that is filled within a 120 day time frame for asthma and anti-depressants. Much like health and prevention programs, medication compliant behavior has been difficult to achieve. The question is will the reward have enough perceived value to motivate persistent refill behavior? In recent years, an increased emphasis has been placed on adherence by health plans in recognition of the fact that non-compliant behavior is critical to overall wellness and has associated costs of $200+B annually.

While pharmaceutical companies have adopted many types of co-pay assistance strategies to encourage compliance from initial fill discounts to loyalty card programs, this is a relatively new issue for health plans to be tackling. It will be interesting to see how much this program drives adherent behavior and whether reducing cost barriers on refill leads to increased adherence.