Outcomes of Reference Pricing for Angiotensin-Converting–Enzyme Inhibitors

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Abstract
In January 1997, reference pricing for angiotensin-converting–enzyme (ACE) inhibitors for patients 65 years of age or older was introduced in British Columbia, Canada. For medications within a specific class, insurance covers the cost up to the reference price, and patients pay the extra cost of more expensive medications. Although reference pricing may reduce the costs of prescription drugs, there is concern that patients may switch to less effective medications or stop treatment. We analyzed data from the Ministry of Health on all 37,362 residents of British Columbia who were 65 or older and were enrolled in the provincial health insurance program, received ACE inhibitors priced higher than the reference price of $27 a month in 1996, and were potentially affected by the new policy. We identified 5353 residents who switched to an ACE inhibitor not subject to cost sharing during the first six months and compared them with 27,938 residents who received only ACE inhibitors subject to cost sharing. Reference pricing for ACE inhibitors was not associated with changes in the rates of visits to physicians, hospitalizations, admissions to long-term care facilities, or mortality. The probability of stopping antihypertensive therapy decreased as compared with the probability before the change in policy (relative risk, 0.76; 95 percent confidence interval, 0.65 to 0.89). Eighteen percent of patients who had been prescribed ACE inhibitors subject to cost sharing switched to lower-priced alternatives. As compared with patients who did not switch, those who did had a moderate transitory increase in the rates of visits to physicians (rate ratio, 1.11; 95 percent confidence interval, 1.07 to 1.15) and hospital admissions through the emergency room (rate ratio, 1.19; 95 percent confidence interval, 0.99 to 1.42) during the two months after switching, but not subsequently. We found little evidence that when reference pricing for ACE inhibitors was introduced in British Columbia, patients stopped treatment for hypertension or that health care utilization and costs increased.