The effect of pharmacy benefit design on patient-physician communication about costs

  • William H. Shrank
  • Sarah A. Fox
  • Adele Kirk
  • Susan L. Ettner
  • Clairessa H. Cantrell
  • Peter Glassman
  • Steven M. Asch
Original Articles


BACKGROUND: Incentive-based formularies have been widely instituted to control the rising costs of prescription drugs. To work properly, such formularies depend on patients to be aware of financial incentives and communicate their cost preferences with prescribing physicians. The impact of financial incentives on patient awareness of and communication about those costs is unknown.

OBJECTIVE: To evaluate the relationship between enrollment in incentive-based pharmacy benefit plans and awareness of out-of-pocket costs and rates of communication about out-of-pocket costs.

DESIGN: A matched telephone survey of patients and their primary care physicians.

SETTING: Los Angeles County.

PARTICIPANTS: One thousand nine hundred and seventeen patients aged 53 to 82 (73% response rate).

MEASUREMENTS: Patient-reported pharmacy benefit design, knowledge of out-of-pocket costs, and discussion of out-of-pocket costs with physicians.

RESULTS: Sixty-two percent of patients who had prescription drug coverage and were aware of their pharmacy benefit design reported being enrolled in incentive-based plans. The majority of these (54%) were “never” or only “sometimes” aware of their out-of-pocket cost requirements at the time of the physician visit. After controlling for numerous physician and patient level variables, we found that patients enrolled in pharmacy benefit designs requiring no copayments were more likely to report they “never” discuss out-of-pocket costs with physicians compared with patients enrolled in incentive-based pharmacy benefit designs (81% vs 67%, P=.001) and patients with no prescription drug insurance (57%, P<.001).

CONCLUSIONS: Incentive-based pharmacy benefit plans and lack of insurance are associated with increased rates of discussions about out-of-pocket costs. Nonetheless, most incentive-based enrollees are unaware of out-of-pocket costs when prescriptions are written and never discuss out-of-pocket costs with their physicians, likely mitigating the effectiveness of financial incentives to guide decision making. Considering that out-of-pocket costs are associated with adherence to medical therapy, interventions to improve patient access to out-of-pocket cost information and the frequency of patient-physician discussions about costs are needed.

Key words

pharmacy benefit design prescription drugs doctor patient communication incentive-based 


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Copyright information

© Society of General Internal Medicine 2006

Authors and Affiliations

  • William H. Shrank
    • 1
    • 2
  • Sarah A. Fox
    • 5
    • 6
  • Adele Kirk
    • 5
  • Susan L. Ettner
    • 5
  • Clairessa H. Cantrell
    • 5
    • 6
  • Peter Glassman
    • 3
    • 4
    • 5
  • Steven M. Asch
    • 3
    • 4
    • 5
  1. 1.Division of Pharmacoepidemiology and Pharmacoeconomics, Department of MedicineBrigham and Women’s HospitalBostonUSA
  2. 2.Harvard Medical SchoolBostonUSA
  3. 3.Veterans Affairs Greater Los Angeles Healthcare SystemLos AngelesUSA
  4. 4.RAND HealthSanta MonicaUSA
  5. 5.Department of Medicine, David Geffen School of MedicineUniversity of California at Los AngelesLos AngelesUSA
  6. 6.Center for Community Partnerships in Health Promotion, Department of Medicine, David Geffen School of MedicineUniversity of California at Los AngelesLos AngelesUSA

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