Roberts, Eric and Hernandez, Inmaculada
(2020)
Evaluating Prescription Drug Subsidies for Diabetics: Effects on Medication Adherence and Health Outcomes.
In: Pitt Momentum Fund 2020, University of Pittsburgh, Pittsburgh, Pa.
(Unpublished)
Abstract
"Out-of-pocket drug costs are rising at a rapid rate, including for insulin, a life-saving drug used by 3.1 million diabetics on Medicare. High out-of-pocket drug costs place an accentuated burden on people with diabetes, many of whom have low incomes, prompting debate about how to address the growing cost burden of prescription drugs for vulnerable populations. In this project, we propose to evaluate the impact of prescription drug subsidies provided through the Medicare Part D Low-Income Subsidy (LIS) program, which reduces prescription drug co-pays and caps out-of-pocket costs for the program’s lowest-income recipients.
Our study will employ a quasi-experimental regression discontinuity (RD) study design to quantify the impacts of the LIS among low-income Medicare beneficiaries with diabetes. Specifically, our RD design will compare diabetic beneficiaries whose income is below LIS eligibility thresholds, who are either fully or largely insulated from rising out-of-pocket drug costs, to diabetic beneficiaries whose income is slightly above these eligibility thresholds, who pay a much larger proportion of prescription drug costs out of pocket and have no limit on their Part D out-of-pocket spending. We will examine whether sizeable differences in out-of-pocket costs associated with these LIS eligibility thresholds are linked to differences in medication adherence and diabetes-related hospitalizations. Thus, our research will provide new evidence about the consequences of high out-of-pocket drug costs for low-income, chronically ill patients and the LIS’s effectiveness in mitigating these costs.
This study builds on the co-investigators’ research expertise in pharmaceutical pricing, health insurance policy, and health economics. Seed funds provided through this grant will allow us to pilot our proposed RD design in a large, clinically and economically vulnerable population, establishing the feasibility of our methods to support future extramurally funded research examining policies to improve prescription drug affordability for low-income, aging, and disabled populations."
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