Impact of Medicaid Prescription Copayments in Patients with Schizophrenia

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DESCRIPTION (provided by applicant): Impact of Medicaid Prescription Copayments in Patients with Schizophrenia To control rising prescription expenditures, many state Medicaid programs have increased prescription copayments and implemented differential (or tiered) copayments tied to the generic/brand status or cost of the drug. The rationale is that higher out-of-pocket payments would reduce unnecessary drug utilization and differential copayments would encourage use of less expensive drugs, leading to decreased expenditures. These changes have particular significance for Medicaid patients with schizophrenia. Antipsychotic drugs are the mainstay therapy for this serious mental illness. Compliance with these drugs is critical to reduce acute psychotic episodes and psychiatric hospitalizations. From a Medicaid program perspective, antipsychotics have become the most costly drug class in recent years, and reduced utilization or switching to generics would result in savings. However, such changes may also raise the risk of non-compliance or discontinuation with antipsychotic therapy in these vulnerable patients. This project aims to understand whether and how Medicaid prescription copayment changes impact antipsychotic medication use in patients with schizophrenia and the extent to which copayment changes are associated with unintended increases in use of other non-drug health care services. Given the large number of states which changed their Medicaid prescription copayment policies between 2000 and 2004, we will evaluate the impact of these changes using a pre-post comparison design with contemporaneous controls. We will link data on patients with schizophrenia across all state Medicaid programs with their state-specific prescription copayment policies. We will estimate a series of econometric models to examine the impact of increases in copayment levels and increases in the brand/generic copay differential on our outcomes of overall and atypical antipsychotic medication use and non-drug mental health services use. We will also explore ways in which these copayment changes impact overall and atypical antipsychotic medication use (i.e., gap in therapy, discontinuation, and switching). Finally, we will use our results to simulate the effect of alternative prescription copayment policies and model the net impact on total mental health care costs for Medicaid programs. The findings of our study will help inform policymakers about the intended and unintended consequences of prescription copayments in Medicaid patients with schizophrenia.