Clinical and economic consequences of reference pricing for dihydropyridine calcium channel blockers

Objective: Reference pricing is a medication cost-sharing policy that fully covers medications which are less expensive than a standard reference price and requires patients to pay the extra cost of higher-priced drugs in a class of therapeutically substitutable drugs. Little information exists on the clinical and economic consequences. We analyzed changes in drug utilization, physician visits, hospitalizations, long-term care admissions, and expenditures after the introduction of reference pricing for dihydropyridine calcium channel blockers (CCBs) among patients aged 65 years or older in British Columbia, Canada. Methods. This quasiexperimental longitudinal study was performed in the setting of Pharmacare, the state-funded drug benefits plan of all elderly persons in British Columbia. Study patients comprised all elderly residents of British Columbia who were enrolled in the provincial health insurance program and received dihydropyridine CCBs at the time of the policy change (35,886) and a subgroup of high-priced dihydropyridine CCB users (23,116). We studied the implementation of reference drug pricing on Jan 1, 1997, affecting all elderly Pharmacare beneficiaries. The main outcome measures were drug utilization, drug expenditures, physician visits, hospitalizations, long-term care, and net savings. Results. The start of reference pricing was followed by a significant reduction in high-priced dihydropyridine CCBs (-150 monthly doses per 10,000 elderly persons), with a corresponding increase in fully covered dihydropyridine CCBs (+116). Overall, antihypertensive use did not decline (P = .46). Low-income status was a risk factor for discontinuing treatment (odds ratio, 1.64; 95% confidence interval [CI], 1.36 to 1.99); however, this was already observed to a similar magnitude 12 months before reference pricing (odds ratio, 1.46). In the overall study cohort, there was no increase in rates of physician visits, hospitalizations, and long-term care admissions. However, the 9% of patients who actually switched medications showed an 18% increase (95% CI, 8% to 28%) in physician visits and an increase of Canadian $13 (95% CI, Canadian $3 to Canadian $24) in costs of physician visits per patient as compared with nonswitchers during the transition but not afterward. This temporary increase may have been a result of additional prescribing and monitoring in switchers. Changes in drug expenditures and physician services resulted in net savings of Canadian $1.6 million in the first 12 months of policy implementation. Conclusions: Reference pricing as implemented in British Columbia may be a model for successful pharmaceutical cost-containment without adversely affecting patients or cost-shifting.