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Unintended Consequences of a Medicaid Prescription Copayment Policy

Lieberman, Daniel A. MD*; Polinski, Jennifer M. ScD, MPH; Choudhry, Niteesh K. MD, PhD; Avorn, Jerry MD; Fischer, Michael A. MD, MS

doi: 10.1097/MLR.0000000000000119
Brief Reports

Background and Objectives: Medication copayments can influence patient choices. We evaluated 2 copayment policies implemented by Massachusetts Medicaid incentivizing the use of selected generic medications.

Research Design and Measures: In 2009, Massachusetts Medicaid copayments were $1 for generics and $3 for brands. On February 1, 2009, copayments for generic antihypertensives, antihyperlipidemics, and hypoglycemics (target medications) remained at $1, whereas copayments for all nontarget generics increased to $2 (policy #1) and $3 on July 1, 2010 (policy #2). Using state-level, aggregate prescription data, we developed interrupted time-series models with controls to evaluate the impact of these policies on use of target generics, target brands, and nontarget essential medications (defined as medications required for ongoing treatment of serious medical conditions).

Results: After policy #1, target generic use increased by 0.93% (P<0.001) with a subsequent quarterly slope decrease of −0.16% (P<0.01); policy #2 led to a slope increase of 0.20% (P<0.01) for target generics; increase in target generics attributable to policy changes was 28,000 prescriptions per year. Neither policy affected target brand use. For nontarget essential generics, there was a −0.27% (P<0.001) quarterly slope decrease after policy #1 and a 0.32% (P<0.01) slope increase after policy #2 with total decrease attributable to policy changes of 127,300 prescriptions per year. For nontarget essential brands, there was a level increase of 0.91% (P<0.001) after policy #1 with increased use attributable to policy changes of 98,300 prescriptions per year.

Conclusions: Two copayment policies designed to encourage use of selected generic medications modestly increased their use; however, there was a shift in other essential medications from generics to brands, which could increase Medicaid costs. When adjusting copayments, careful consideration must be given to unintended consequences of specific policy structures.

Supplemental Digital Content is available in the text.

*Division of Emergency Medicine, Harborview Medical Center, University of Washington, Seattle, WA

Division of Pharmacoepidemiology and Pharmacoeconomics, Brigham and Women’s Hospital and Harvard Medical School, Boston, MA

Supplemental Digital Content is available for this article. Direct URL citations appear in the printed text and are provided in the HTML and PDF versions of this article on the journal's Website,

Supported by AHRQ Grant R01-HS020047 and the Harvard Medical School Scholars in Medicine office.

J.M.P., N.K.C., J.A. and M.A.F. receive research support from CVS-Caremark for studies related to medication adherence. N.K.C. is a consultant to Mercer Health and has unrestricted grants payable to his institution from the Commonwealth Fund, the Robert Wood Johnson Foundation, and Aetna to study the impact of pharmacy benefit design on drug utilization. M.A.F. serves on the CVS Digital Health Advisory Board. The other author has no conflict of interest to declare.

Reprints: Michael A. Fischer MD, MS, Division of Pharmacoepidemiology and Pharmacoeconomics, Brigham and Women s Hospital and Harvard Medical School, 1620 Tremont Street, Suite 3030, Boston, MA 02120. E-mail:

© 2014 by Lippincott Williams & Wilkins.