The Impact of Tiered Co-Pays A Survey of Patients and Pharmacists

The Impact of Tiered Co-Pays A Survey of Patients and Pharmacists Research Report Conducted by Harris Interactive September, 2003 This study was completed on behalf of and with support from the National Association of Chain Drug Stores Foundation, the National Pharmaceutical Council, and Pfizer Inc. www.harrisinteractive.com 2003, All rights reserved.

Contents Background and Objectives Methodology Executive Summary Detailed Findings 4 6 10 23 Patients and Their Health Care Coverage All Patients with Drug Coverage Patients with Employer-Sponsored Health Care Benefits Patient Health Issues: Patients with Employer-Sponsored Health Care Benefits Compliant and Non-Compliant Money Saving Strategies: Patients with Employer-Sponsored Health Care Benefits 24 28 33 40 Page 2

Contents (Cont.) Drug Selection Based on Patient Out-of-Pocket Costs: Patients with Employer-Sponsored Health Care Benefits Overview: Pharmacists Managed Care and the Pharmacist s Practice: Pharmacists Non-Compliance & Drug Selection Based on Patient Out-of- Pocket Costs: Pharmacists 53 60 68 75 Page 3

Background and Objectives Employers increasingly have adopted strategies to reduce prescription drug expenditures, including cost-sharing arrangements that require employees to pay a greater share of the costs. A highly prevalent strategy is the multi-tier co-pay (MTC) benefit design, with three or more tiers, in which an employee s out-of-pocket cost, or co-pay, for a prescription drug depends on that medicine s tier level. In 2002, approximately 57% of people with employer-sponsored health benefits were enrolled in MTC plans growing from 29% of employees with this benefit design in 2000. 1 The growing use of tiered benefit plans and increasing co-pay levels has prompted concern that higher co-pays may lead patients, particularly those with chronic illnesses, to reduce prescription drug compliance and, consequently, experience negative health outcomes that result in increased utilization of other health care services. 1 Source: Kaiser Family Foundation and Health Research and Educational Trust 2002 Employer Health Benefits Survey Page 4

Background and Objectives (cont.) In August 2002, The National Association of Chain Drug Stores Foundation, The National Pharmaceutical Council, and Pfizer, Inc. commissioned Harris Interactive to assess and document the impact of tiered prescription drug formularies on the behavior and health outcomes of chronically ill patients. Specifically, this research examines the relationship between multi-tier co-pay benefit plans and: Prescription drug compliance and persistency; Patient health outcomes; and Pharmacy practice. Page 5

Methodology: Patient Survey g Harris Interactive conducted 20-minute telephone interviews with 2,711 U.S. adults age 18+ with at least one chronic or recurring health condition and health coverage that includes a drug benefit ( representing 52% of all U.S. adults*). 1,499 interviews were conducted with respondents sampled via random digit dialing (RDD). An additional 1,212 interviews were conducted with respondents, recruited online via the Harris Interactive Chronic Illness panel, with any of four key chronic conditions: asthma, depression, type 2 diabetes, or high cholesterol. These additional interviews ensured sufficient numbers to permit group-level analyses for each of these conditions. Total interviews for each condition: Asthma 435 Depression 404 Type 2 diabetes 589 High Cholesterol 470 The full sample includes patients covered by a range of health care plans, including private insurance, employer-sponsored coverage, Medicare, Medicaid, and coverage through the Veteran s Administration (VA). The prescription drug benefits associated with each of these plans vary greatly. Therefore, to ensure a homogeneous sample, the bulk of the analysis focuses on the most predominant group patients with employer-sponsored coverage. Except where indicated, patients with Medicare, Medicaid, and VA coverage are excluded from the analysis. * Source: Strategic Health Perspectives. Harris Interactive, 2002. Page 6

Methodology: Patient Survey g Interviews were conducted between December 3, 2002 and January 5, 2003. The patient data were weighted, where needed, to be projectable to all adults age 18+ diagnosed with a chronic condition and with prescription drug coverage. To ensure that the results were not biased by the over-representation of people with the four conditions described above, the data were also weighted so that these conditions are represented in correct proportion to their actual incidence among the general population. Page 7

Methodology: Pharmacist Survey g 1001 licensed retail pharmacists completed 20-minute self-administered Internet interviews. Pharmacists were sampled from a comprehensive national listing and invited to Harris Interactive s website by US mail. g Interviews were conducted from December 2 through December 13, 2002. g The data were weighted to ensure that pharmacists are represented in correct proportion with respect to retail practice setting (chain vs. independent pharmacy) and geographic region. Page 8

Methodology: Significance Testing Significance is tested at the 95% confidence level Throughout the report, significance testing is reported using superscripts. Numbers with superscripts are significantly higher/lower than the number in the row or column titled with that superscript. Page 9

Executive Summary Chronically ill individuals with employer-sponsored coverage are likely to be enrolled in drug benefit plans that require them to pay a co-pay. Seven in ten insured adults who suffer from chronic conditions are covered through employer-sponsored plans. Three in four of those with employer-sponsored coverage have drug benefits involving a co-pay. At least half of individuals with employer-sponsored co-pay benefit plans have tiered co-pays, which require patients to pay more out-of-pocket for some medications than others. 28% of individuals with employer-sponsored co-pay benefit plans are enrolled in plans with 2 tiers; 23% are enrolled in plans with 3 or more tiers. Demographically, chronically ill people in employer-sponsored drug benefit plans with 3 or more tiers (multi-tier co-pays or MTC ) are more likely than adults in general to be female, college-educated, white, and have lower household incomes. Page 11

Executive Summary Chronically ill people in multi-tier co-pay drug benefit plans are more likely to report having difficulty paying out-of-pocket costs for medicines. People with MTC plans are much more likely than those in non-tiered, and two-tier plans to report having difficulty paying for their prescription medications. This is not surprising given that they pay about 60% more per month than people in non-tiered plans for their prescription drugs. People with multi-tier co-pay plans are less healthy than their nontiered, and in some cases two-tiered, counterparts. Compared to people with non-tiered employer-sponsored drug plans, those in MTC plans take more medicines. They are also more likely to have visited a hospital emergency room in the past year and make visits to the doctor beyond regular check-ups. They are also more likely to report missing days from work, contacting their health plans, and contacting their health benefits manager at work. Page 12

Executive Summary Patients use a variety of strategies to reduce their out-of-pocket costs for prescription drugs. The likelihood of using these strategies is greater among patients with tiered co-pay benefit plans. Eight in ten with MTC plans report requesting a generic, requesting samples, or splitting pills in half with their doctor s permission within the past year, compared to about five in ten individuals with non-tiered copay plans. Patients with tiered co-pay plans more frequently engage in noncompliant behaviors to reduce out-of-pocket costs, including delaying or deciding not to get a prescription filled, or taking smaller doses than prescribed, including splitting pills without the doctor s permission. Half of those with MTC plans report using these non-compliant strategies. They are twice as likely as those in non-tiered plans to use non-compliant strategies (54% vs. 25%). Page 13

Executive Summary Asthma and Depression patients in multi-tier co-pay benefit plans are especially likely to use non-compliant strategies in order to save money. Nine in ten asthma sufferers who have MTC employersponsored drug benefit plans report using money saving strategies. Three in four MTC asthma sufferers report using non-compliant strategies within the past year, compared with half that number among asthma sufferers in non-tiered plans (75% vs. 34%). Similarly, over nine in ten depression sufferers in MTC employersponsored plans use money-saving strategies. Three in four (76%) depression sufferers in MTC plans report having been non-compliant within the past year in order to save money, compared with four in ten (42%) depression sufferers in non-tiered plans. Page 14

Executive Summary Other key groups who are especially vulnerable to the effects of tiering include the less healthy and the less wealthy. Patients with 3+ tier employer-based drug benefit plans who are in poor health are twice as likely as their non-tiered counterparts to report having been non-compliant within the past year (53% and 66% among those in two- and three-tier plans). In contrast, only about a quarter of those with non-tiered employer plans reported non-compliance, regardless of their health status. Those with annual household incomes under $50,000 are similarly susceptible to the effects of tiering, with 50% and 69% of those with two- and three-tier plans reporting non-compliance, compared to only 29% among those with non-tiered plans. Page 15

Executive Summary Non-compliance is not without risk. More than a third report having experienced health problems as a result of engaging in noncompliant behaviors to save on their prescription out-of-pocket drug costs. Again, people with tiered drug plans are disproportionately affected. On average, over a third (37%) of those who engaged in a noncompliant behavior, experienced health problems as a result of doing so. This translates to roughly 14% of all chronically ill adults with drug coverage, or 15.6 million people.* Fully half (51%) of those in three tier plans who engaged in a noncompliant behavior report resultant negative health outcomes, compared with only 26% on average, among those with non-tiered plans. * Based on July 2002 U.S. Census Bureau population estimate of U.S. adults: 215,474,215. Page 16

Executive Summary It is relatively common for patients to receive a drug with a lower co-pay specifically for the purpose of reducing patients out of pocket costs One-third (33%) of chronically ill patients with employer-sponsored drug coverage report either switching from a drug they were already taking or receiving a drug with a lower co-pay at the outset (at their own request or by choice of the doctor) for the purpose of saving money. Individuals with MTC drug plans, and those who suffer from depression are most likely to report experiencing this cost-based prescribing. Over four in ten people with depression (43%) report having experienced some form of cost-based prescribing. Over half (54%) of those in MTC plans report having having these experiences, compared with only 17% of those in non-tiered plans and 33% of those in 2-tier plans. Page 17

Executive Summary Individuals who have switched medications or received medicines with lower co-pays to save money are more likely than average to report having had problems with their prescription medications, as are individuals with multi-tier drug plans. Those who have received or switched to a drug with a lower co-pay within the past year are about twice as likely as those who have not, to report having taken a drug that was ineffective (25% vs. 12%). They are also twice as likely to report taking a drug that caused side effects (27% vs. 14%). Almost three in ten individuals (27%) with MTC plans report having taken a medication in the past year that was ineffective, and about the same number (29%) experienced side effects from a medication. Page 18

Executive Summary Pharmacists confirm the experiences reported by patients, reporting that patient non-compliance is a common occurrence. Two-thirds (65%) report that patients delay getting prescriptions filled very or somewhat often in order to reduce their out-of-pocket costs for prescription drugs. A majority also report that patients somewhat or very often decide not to get prescriptions filled (57%) and take their medications less frequently than prescribed (56%) in order to save money. Page 19

Executive Summary By an overwhelming majority, pharmacists suspect that patients take less than optimal drugs due to insurance restrictions. They also believe that the substituted drugs may be ineffective or cause side effects. Nine in ten (90%) pharmacists suspect that their patients with drug coverage end up taking less-than-optimal medications because of insurance restrictions. Half (51%) believe that it is somewhat or very common that the substituted drug is not effective. Four in ten (39%) believe it is somewhat or very common that the substituted drug causes side effects. About two-thirds (64%) believe that it is somewhat or very common that patients end up making additional visits to a doctor as a result of drug substitution. Page 20

Executive Summary Pharmacists have a lot of experience dealing with drug plans and they know them well. The surveyed pharmacists have been in practice an average of 17 years and these pharmacists fill more than 750 prescriptions per average week. On average, 80% of these are covered by some type of drug plan half (52%) by plans that involve a co-pay. Nearly nine in ten (87%) pharmacists say that they are somewhat or very knowledgeable about options under multi-tier drug plans. In contrast, 92% believe that patients are either not at all or not very knowledgeable about options under these plans. Prescriptions most commonly filled include antidepressants, analgesics, diabetes therapy, vascular agents, and oral anti-infectives. Since becoming widespread, multi-tiered drug plans have caused more pharmacists to spend time dealing with patients about their drug benefits than about their treatments. Eight in ten pharmacists say that, since multi-tier drug plans have become widespread, they spend somewhat or much more time dealing with health plans (82%) and educating patients about their drug benefits (83%). Only a little more than a quarter (27%) spend more time communicating with and educating their patients about their medications. Page 21

Executive Summary Ideally, pharmacists would spend more of their time communicating with patients and less time dealing with health plans. Pharmacists spend most of their time filling prescriptions ranking this activity higher than any other in terms of actual time spent. However pharmacists would prefer to spend most of their time communicating with and educating patients on their treatments ranking this activity #1 in terms of time ideally spent. Pharmacists ranked communicating with health plans last among their list of ideal activities. Working with these plans has become more difficult in the last five years, and has made pharmacists jobs more difficult. Among those in practice at least five years, 85% say that working with the typical health plan today is somewhat or much more difficult than working with the typical health plan five years ago. 87% also say that their jobs are more difficult today overall than they were five years ago; among this group, nine in ten say that the move toward drug formularies (92%) and multi-tier drug plans (92%) are the cause of the difficulty. Page 22

Types of Patient Health Care Coverage All Patients With Drug Coverage Most patients with health insurance and prescription drug coverage are covered through an employment-based health care plan. Health insurance or an HMO through your or someone else's work or union 71% Health insurance or an HMO bought directly by you or another member of your family 35% Medicare or a Medicare HMO 28% Medicaid, Medicaid HMO, or medical assistance 15% Health coverage through the Veteran's Administration 7% Health insurance from some other source 19% Note: percentages exceed 100% because some patients have health coverage through more than one source. Q320: People have different kinds of health plans or health insurance, including those provided by the government. Are you covered by (READ EACH ITEM), or not? Base: All Respondents (n=2711) Page 25

Demographic Profile by Health Care Coverage All Patients With Drug Coverage Gender Male Female US Adults Age 18+ % 48 52 Employer-Sponsored Coverage* (n=1501) % 45 55 Medicare (n=456) % 40 60 Medicaid (n=349) % 43 57 VA Coverage (n=158) % 78 22 Age (mean years) 43 43 64 49 55 College degree 16 32 28 18 41 Married 58 68 68 42 66 Income Less than $50,000 $50,000 or more 53 39 40 47 57 25 69 12 48 35 Race White Minority 74 26 79 19 84 8 63 32 68 25 * Throughout this report, the employer-sponsored coverage group excludes those who also have coverage through Medicare, Medicaid or the Veteran s Administration. Page 26

Type of Drug Benefit by Health Care Coverage All Patients With Drug Coverage Employer-Sponsored Coverage (n=1501) (a) % Medicare (n=456) (b) % Medicaid (n=349) (c) % VA Coverage (n=158) (d) % Total Co-Pay 75 65 c 46 59 c Co-Insurance 13 19 d 14 12 Combination 8 6 8 6 Not sure 3 9 28 bd 17 b Co-pay Plans Non-Tiered 35 36 55 b 48 b 2 Tiers 28 27 24 29 3+ tiers 25 18 cd 5 7 Not sure 11 17 c 5 12 c Q600, 605, 610, 615, 620, 625 (see questionnaire Appendix B) Base: All Respondents Page 27

Combination 8% Drug Coverage Patients With Employer-Sponsored Health Care * Not Sure 3% Co- Insurance 13% All Plans 3+ Tiers 25% Not Sure 11% Co-Pay Plans Non- Tiered 35% Co-Pay 75% 2 Tiers 28% Q600, 605, 610, 615, 620, 625 Base: All Respondents (n=1501) * Note: Combination plans are those in which patients pay a co-pay for some drugs and a percentage (co-insurance) for other drugs. Combination plans are presented alongside co-insurance plans in this analysis for purposes of convenience. Page 29

Demographic Profile by Co-pay Coverage Patients With Employer-Sponsored Health Care Gender Male Female All US Adults Age 18+ % 48 52 Total w/ Employer Coverage (n=1501) a % 45 55 b Non-tiered (n=365) b % 53 ac 47 2 Tiers (n=335) c % 45 55 b 3+ Tiers (n=274) d % 37 a 63 abc Age (mean years) 43 43 43 44 42 College degree 16 32 b 23 34 b 38 ab Married 58 68 65 71 71 Income Less than $50,000 $50,000 or more Race White Minority 53 39 74 26 40 47 79 b 19 c 40 45 73 25 acd 37 51 84 b 14 51 abc 44 81 b 15 Page 30

Patient Chronic Conditions by Co-Pay Coverage Patients With Employer-Sponsored Health Care Patients in tiered co-pay plans are more likely than adults in general and those in non-tiered plans to suffer from depression. Percent With Diagnosed Medical Condition Total (n=1501) (a) Non-tiered (n=365) (b) 2 Tiers (n=335) (c) 3+ Tiers (n=274) (d) Diabetes 11 9 13 13 High Cholesterol 30 29 34 33 Allergies 20 19 18 24 Asthma 19 17 19 21 Hypertension 16 17 20 19 Depression 18 15 22 b 24 Arthritis 7 7 8 8 Q400. (Do you have any recurring or chronic health condition diagnosed by a health professional that has lasted or is expected to last for at least a year?) What condition is that? Please name all recurring or chronic medical conditions that you have. Base: All Respondents Page 31

Overall Health by Co-pay Coverage Patients With Employer-Sponsored Health Care Patients in MTC co-pay plans are more likely than others to report being in fair or poor health Excellent/Very Good Health Fair/Poor Health 47% 41% 36% 39% b 33% a,b,c 30% 38% 27% 11% 9% 9% 27% 12% 22% 5% 17% 17% 4% 13% 23% 3% 20% 7% 26% Total (a) Non-tiered (b) 2 Tiers (c) 3+ Tiers (d) Total (a) Non-tiered (b) 2 Tiers (c) 3+ Tiers (d) Excellent Very Good Fair Poor Q330. Would you say your health, in general, is excellent, very good, good, fair or poor? Base: All Respondents (total n=1501; non-tiered n=365; 2 tiers n=335; 3+ tiers n=274) Page 32

Patient Health Issues Past 12 Months Patients With Employer-Sponsored Health Care In the past 12 months, two-thirds of patients have contacted a doctor for a reason other than a regular check-up, and almost half have contacted their health plan or insurance company. Percent who Experienced Health Issue Mean # of times experienced Make any visits to a doctor in addition to regular check-ups 66% Make any visits to a doctor in addition to regular check-ups 6.1 Contact your health plan or insurance company 48% Contact your health plan or insurance company 3.7 Miss any days from w ork 42% Miss any days from w ork 12.4 Visit a hospital ER 22% Visit a hospital ER 1.6 Admitted to a hospital 17% Admitted to a hospital 1.6 Visit an urgent care facility 18% Visit an urgent care facility 2.2 Contact health benefits manager at work 18% Contact health benefits manager at work 2.3 Q500. In the past 12 months, for any reason did/were you [INSERT ITEM], or not? Base: All Respondents (n=1501) Q510. And how many times did that happen in the past 12 months? Base: Have Done Action in Past 12 Months (n=1073) Page 34

Past Year Health Issues Patients With Employer-Sponsored Health Care Patients with MTC plans are more likely than those with non-tiered plans to have visited an emergency room or been admitted to a hospital in the past year. % Who Experienced Each Health Issue 22% 23% 27% a 19% 19% 16% 16% 18% 19% Visit an urgent care facility Admitted to a hospital Visit a hospital ER Non-Tiered (a) 2 Tiers (b) 3+ Tiers (c) Q500. In the past 12 months, for any reason did/were you [INSERT ITEM], or not? Base: All Respondents (non-tiered n=365; 2 tiers n=335; 3+ tiers n=274) Page 35

Past Year Health Issues Patients With Employer-Sponsored Health Care (cont.) Patients with MTC plans are more likely to have contacted their health benefits manager or insurance company, missed days from work, or made a special visit to the doctor. % Who Experienced Each Health Issue 61% a,b 67% a 73% a 40% 38% 49% b 43% 45% 54% 16% 19% 25% a Contact health benefits manager at work Miss any days from work Contact your health plan or insurance company Non-Tiered (a) 2 Tiers (b) 3+ Tiers (c) Make any visits to a doctor in addition to regular check-ups Q500. In the past 12 months, for any reason did/were you [INSERT ITEM], or not? Base: All Respondents (non-tiered n=365; 2 tiers n=335; 3+ tiers n=274) Page 36

Past Year Prescription Medication Patients With Employer-Sponsored Health Care Nearly all patients have taken prescription medication in the past year. Patients with MTC plans are more likely than those with non-tiered plans to have taken a prescription medication in the past year. Took Rx Medication 84% 82% 90% b 92% b Total (a) Non-Tiered (b) 2 Tiers (c) 3+ Tiers (d) Q405. In the past 12 months, have you taken any prescription medications to treat a chronic or recurring health or medical condition? Base: All Respondents (total n=1501; non-tiered n=365; 2 tiers n=335; 3+ tiers n=274) Page 37

Number of Rx Medications Patients With Employer-Sponsored Health Care Patients with MTC plans take more prescription medications than those in non-tiered plans. Mean # of Medications 3.1 b,c 2.3 2.4 b 2.1 b 1.8 1.7 1.4 1.9 b Past 12 Months Total Current Medications Total (a) Non-Tiered (b) 2 Tiers (c) 3+ Tiers (d) Q415: How many different prescription medications, in total, have you taken in the past 12 months for (CONDITION)? Q420: And how many different prescription medications, in total, do you CURRENTLY take for (CONDITION)? Base: All Respondents (total n=1501; non-tiered n=365; 2 tiers n=335; 3+ tiers n=274) Page 38

Difficulty Paying Out-of-Pocket Costs Patients With Employer-Sponsored Health Care People with MTC plans are much more likely than others to report having difficulty paying for their prescription medications perhaps not surprising, given that they pay about $50 per month more than people in two-tier plans and $40 per month more than people in non-tiered plans for their prescription drugs. Average monthly out-ofpocket cost $70.00 $60.30 $47.40 $97.60 c 46% b,c 30% b,c,d % Responding Extremely/Somewhat Difficult To Pay Out-of-Pocket Costs 19% 24% Total (a) Non-Tiered (b) 2 Tiers (c ) 3+ Tiers (d) Q680 Not counting the amount covered by your health plan, about how much do you spend per month out-of-pocket for your prescription medicines? Base: All Respondents (total n=1501; non-tiered n=365; 2 tiers n=335; 3+ tiers n=274). Q690 How difficult is it for you to pay the out-of-pocket costs for your prescription medications extremely difficult, somewhat difficult, not too difficult, or not at all difficult? Base: Out-of-Pocket Costs are Greater Than Zero (total n=1336; non-tiered n=312; 2 tiers n=313; 3+ tiers n=263). Page 39

Defining Compliance In this study, we refer to two distinct sets of behaviors patients use to save on their out-of-pocket costs for prescription medicines. Compliant strategies include: Requesting a generic drug, Asking physician for samples, and Splitting pills in half with doctor s permission. Non-compliant strategies include: Deciding not to get a prescription filled, Delaying getting a prescription filled, Taking smaller doses of a medication than prescribed or splitting pills in half without a doctor s permission, and Taking a medication less frequently than prescribed. Page 41

Strategies to Reduce Out-Of-Pocket Costs for Prescription Medicines Patients With Employer-Sponsored Health Care Two-thirds of all patients engaged in some strategy to save money. Used any strategy to save money 67% * Used any compliant strategy 60% Requested a generic drug instead of a name brand 48% Asked physician for samples 37% Split pills in half with doctor's permision 11% * Used any non-compliant strategy 37% Delayed getting a Rx filled 27% Decided not to get a Rx filled 23% Taken medication less frequently than prescribed 19% Taken smaller doses of a medication or split pills in half without doctor's permission 10% Q700. In the past 12 months, have you done any of the following in order to reduce your out-of-pocket costs for prescription medications? Please answer yes only if the main reason you did this was to save money. Have you? Base: All Respondents (total n=1501) Page 42

Strategies to Reduce Out-of-Pocket Costs by Co-pay Coverage Patients With Employer-Sponsored Health Care Patients in MTC plans are more likely than others to use these strategies. Used any strategy to save money 52% 67% a 86% a,b Used any compliant strategy 45% 63% a 78% a,b Requested a generic drug instead of a name brand 29% 48% a 68% a,b Asked physician for samples 26% 37% a 49% a,b Split pills in half with doctor's permision 8% 10% 17% a,b Non-Tiered (a) 2 tiers (b) 3+ Tiers (c) Q700. In the past 12 months, have you done any of the following in order to reduce your out-of-pocket costs for prescription medications? Please answer yes only if the main reason you did this was to save money. Have you? Base: All Respondents (non-tiered n=365; 2 tiers n=335; 3+ tiers n=274 ) Page 43

Strategies to Reduce Out-of-Pocket Costs by Co-pay Coverage Patients With Employer-Sponsored Health Care Patients in MTC plans are more likely than others to use non-compliant strategies. Used any non-compliant strategy 25% 33% 54% a,b Delayed getting a Rx filled 18% 22% 43% a,b Decided not to get a Rx filled 11% 18% a 38% a,b Taken medication less frequently than prescribed 12% 16% 31% a,b Taken smaller doses of a medication or split pills in half without doctor's permission 5% 8% 14% a Non-Tiered (a) 2 tiers (b) 3+ Tiers (c) Q700. In the past 12 months, have you done any of the following in order to reduce your out-of-pocket costs for prescription medications? Please answer yes only if the main reason you did this was to save money. Have you? Base: All Respondents (non-tiered n=365; 2 tiers n=335; 3+ tiers n=274) Page 44

Health Problems Resulting From Non-Compliance by Co-pay Coverage Patients With Employer-Sponsored Health Care Patients in MTC plans are twice as likely to experience health problems as a result of non-compliance as those in non-tiered plans. Experienced health problems as a result of non-complaint behavior 39% 51% 26% Non-Tiered (a) 2 tiers (b) 3+ Tiers (c) Q710. In the past 12 months, do you believe you experienced any health problems as a result of [INSERT ITEM] in order to save money? Base: Have Done Non-compliant Behavior (non-tiered n=76; 2 tiers n=106; 3+ tiers; n=143) Page 45

Patient Strategies to Reduce Out-of-Pocket Costs: by Condition and Co-Pay Coverage Patients With Employer-Sponsored Health Care Asthma Depression Total n=267 (A) Non-tiered n=54 (B) 2 Tiers n=70 (C) 3+ Tiers n=56 (D) Total n=231 (A) Non-tiered n=41 (B) 2 Tiers n=65 (C) 3+ Tiers n=57 (D) Used any strategy to save money 67 49 68 b 91 bc 79 56 82 b 94 bc Used any compliant strategy 61 33 65 b 88 bc 71 40 80 b 85 b -Requested a generic drug 49 23 49 b 74 bc 52 22 55 b 69 b -Asked physician for samples 41 16 43 b 62 bc 56 35 57 b 67 b -Split pills in half with doctor s permission 15 10 8 37 bc 18 12 16 28 b Used any non-compliant strategy 49 34 38 75 bc 58 42 58 76 bc -Delayed getting a Rx filled 35 22 31 64 bc 48 28 46 69 bc -Decided not to get a Rx filled 33 19 15 60 bc 34 22 32 58 bc -Taken Rx less frequently than prescribed 24 20 13 48 bc 32 20 20 51 bc -Taken smaller doses of medication or split pills without doctor s permission 11 9 4 17 c 21 14 20 28 Page 46

Patient Strategies to Reduce Out-of-Pocket Costs: by Condition and Co-Pay Coverage (cont.) Patients With Employer-Sponsored Health Care Type 2 Diabetes High Cholesterol Total n=325 (A) Non-tiered n=60 (B) 2 Tiers n=91 (C) 3+ Tiers n=76 (D) Total n=259 (A) Non-tiered n=66 (B) 2 Tiers n=66 (C) 3+ Tiers n=54 (D) Used any strategy to save money 68 53 62 83 bc 67 57 61 82 bc Used any compliant strategy 61 31 60 b 81 bc 61 46 59 73 b -Requested a generic drug 50 24 50 b 71 bc 51 34 48 65 b -Asked physician for samples 38 18 41 b 48 b 34 22 31 42 b -Split pills in half with doctor s permission 11 6 11 18 b 9 5 10 9 Used any non-compliant strategy 32 27 27 36 30 23 19 40 bc -Delayed getting a Rx filled 22 3 20 b 35 bc 21 11 11 29 bc -Decided not to get a Rx filled 19 18 12 29 c 19 8 11 27 bc -Taken Rx less frequently than prescribed 19 25 14 23 19 14 10 26 c -Taken smaller doses of medication or split pills without doctor s permission 10 1 9 b 19 b 8 1 3 5 Page 47

Patient Strategies to Reduce Out-of-Pocket Costs: by Income and Co-Pay Coverage Patients With Employer-Sponsored Health Care Total n=584 (A) Less Than $50,000 per Year Non-tiered n=142 (B) 2 Tiers n=120 (C) 3+ Tiers n=119 (D) Total n=787 (A) $50,000 per Year or More Non-tiered n=177 (B) 2 Tiers n=187 (C) 3+ Tiers n=139 (D) Used any strategy to save money 76 57 76 b 92 bc 60 45 63 b 79 bc Used any compliant strategy 67 45 69 b 85 bc 55 41 60 b 71 bc -Requested a generic drug 57 38 60 b 72 bc 41 22 40 b 65 bc -Asked physician for samples 41 21 36 b 57 bc 34 28 38 b 43 b -Split pills in half with doctor s permission 16 13 c 6 26 bc 8 5 12 b 8 Used any non-compliant strategy 50 29 50 b 69 bc 27 17 25 39 bc -Delayed getting a Rx filled 38 17 33 b 58 bc 19 12 17 27 bc -Decided not to get a Rx filled 31 13 34 b 48 bc 16 6 10 28 bc -Taken Rx less frequently than prescribed 27 17 25 38 bc 15 9 12 23 bc -Taken smaller doses of medication or split pills without doctor s permission 15 8 16 b 20 b 5 1 4 6 b Page 48

Patient Strategies to Reduce Out-of-Pocket Costs: by Health Status and Co-Pay Coverage Patients With Employer-Sponsored Health Care Excellent/Very Good Health Fair/Poor Health Total Nontiered Non- Tiered 2 Tiers 3+ Tiers Total 2 Tiers 3+ Tiers n=594 (A) n=173 (B) n=116 (C) n=87 (D) n=332 (A) n=58 (B) n=81 (C) n=82 (D) Used any strategy to save money 61 48 63 b 82 bc 76 54 78 b 90 bc Used any compliant strategy 56 42 61 b 73 b 69 45 74 b 85 b -Requested a generic drug 45 26 47 b 64 bc 59 35 58 b 81 bc -Asked physician for samples 31 25 31 43 b 49 32 46 59 b -Split pills in half with doctor s permission 8 6 8 14 15 10 8 26 bc Used any non-compliant strategy 29 23 22 44 bc 51 27 53 b 66 b -Delayed getting a Rx filled 20 17 14 31 bc 43 21 43 b 59 bc -Decided not to get a Rx filled 19 12 12 32 bc 31 12 29 b 50 bc -Taken Rx less frequently than prescribed 13 10 11 13 32 16 34 b 47 b -Taken smaller doses of medication or split pills without doctor s permission 5 4 4 5 20 14 21 27 Page 49

Patient Strategies to Reduce Out-of-Pocket Costs: by Gender and Co-Pay Coverage Patients With Employer-Sponsored Health Care Male Female Total Nontiered Nontiered 2 Tiers 3+ Tiers Total 2 Tiers 3+ Tiers n=530 (A) n=157 (B) n=124 (C) n=77 (D) n=971 (A) n=208 (B) n=211 (C) n=197 (D) Used any strategy to save money 61 47 67 b 80 bc 71 59 67 90 bc Used any compliant strategy 55 40 61 b 75 bc 65 50 64 80 bc -Requested a generic drug 42 22 43 b 69 bc 53 37 52 b 68 bc -Asked physician for samples 31 24 33 37 b 42 28 39 b 56 bc -Split pills in half with doctor s permission 9 6 10 14 13 11 9 19 bc Used any non-compliant strategy 28 19 30 b 34 b 45 32 35 66 bc -Delayed getting a Rx filled 20 15 18 25 34 22 26 54 bc -Decided not to get a Rx filled 18 8 18 b 26 b 27 14 19 45 bc -Taken Rx less frequently than prescribed 13 6 13 b 22 b 25 19 19 36 bc -Taken smaller doses of medication or split pills without doctor s permission 7 2 4 10 b 12 8 11 17 b Page 50

Patient Strategies to Reduce Out-of-Pocket Costs: by Age and Co-Pay Coverage Patients With Employer-Sponsored Health Care Under Age 50 Age 50+ Total Nontiered Nontiered 2 Tiers 3+ Tiers Total 2 Tiers 3+ Tiers n=806 (A) n=184 (B) n=161 (C) n=162 (D) n=657 (A) n=172 (B) n=168 (C) n=105 (D) Used any strategy to save money 69 54 76 b 89 bc 62 51 57 79 bc Used any compliant strategy 63 47 70 b 80 bc 57 43 54 b 75 bc -Requested a generic drug 50 29 51 b 69 bc 46 32 45 b 70 bc -Asked physician for samples 41 30 43 b 52 b 31 21 29 43 bc -Split pills in half with doctor s permission 11 8 9 17 bc 13 9 11 20 bc Used any non-compliant strategy 42 29 38 60 bc 27 19 26 37 b -Delayed getting a Rx filled 32 22 26 49 bc 18 10 18 b 26 b -Decided not to get a Rx filled 26 12 22 b 44 bc 14 8 15 b 21 b -Taken Rx less frequently than prescribed 22 13 20 34 bc 14 11 12 20 b -Taken smaller doses of medication or split pills without doctor s permission 11 7 9 16 b 7 2 8 b 7 Page 51

Patient Strategies to Reduce Out-of-Pocket Costs: by Education and Co-Pay Coverage Patients With Employer-Sponsored Health Care College Graduate Non-College Graduate Total Nontiered Nontiered 2 Tiers 3+ Tiers Total 2 Tiers 3+ Tiers n=732 (A) n=151 (B) n=166 (C) n=145 (D) n=747 (A) n=208 (B) n=166 (C) n=125 (D) Used any strategy to save money 64 49 63 b 76 bc 69 54 71 b 93 bc Used any compliant strategy 58 45 60 b 67 b 62 46 66 b 86 bc -Requested a generic drug 47 30 46 b 59 bc 49 29 50 b 75 bc -Asked physician for samples 36 27 29 42 bc 38 26 43 b 55 bc -Split pills in half with doctor s permission 9 6 9 9 13 10 11 23 bc Used any non-compliant strategy 32 19 22 42 bc 41 28 41 b 62 bc -Delayed getting a Rx filled 22 12 14 28 bc 31 20 29 b 54 bc -Decided not to get a Rx filled 18 6 13 b 29 bc 26 12 23 b 44 bc -Taken Rx less frequently than prescribed 16 8 9 22 bc 22 14 22 b 37 bc -Taken smaller doses of medication or split pills without doctor s permission 9 2 6 12 b 10 6 10 15 b Page 52

OOP Cost-Based Drug Selection: Three Scenarios Patients With Employer-Sponsored Health Care One in three experienced some form of cost-based drug selection within the past year. Experienced any cost-based drug selection 33% - Patient asked doctor or pharmacist to give them less costly drug 23% - Doctor chose one drug over another to save patient money 19% - Patient switched from drug already taking to less expensive drug to save money 13% Q800 In the past 12 months, has your doctor chosen a particular drug for you instead of another drug he or she might prescribe in order to save you money? Q805 In the past 12 months, have you asked your doctor or pharmacist to give you a drug that would cost you less money than another drug you might be prescribed? Q810 In the past 12 months, have you had to switch from a drug you had already been taking to a less expensive drug in order to save money? Base: All Respondents (total n=1501) Page 54

OOP Cost-Based Drug Selection by Health Condition Patients With Employer-Sponsored Health Care People with depression are especially likely to experience cost-based drug selection. Asthma (n=267) % a Depression (n=231) % b Type 2 Diabetes (n=325) % c High Cholesterol (n=259) % d Experienced any cost-based drug selection 34 43 34 34 -Patient asked doctor or pharmacist to give them less costly drug 23 28 23 26 -Doctor chose one drug over another to save patient money 19 28 24 21 -Patient switched from drug already taking to less expensive drug to save money 8 20 a 14 16 a Q800 In the past 12 months, has your doctor chosen a particular drug for you instead of another drug he or she might prescribe in order to save you money? Q805 In the past 12 months, have you asked your doctor or pharmacist to give you a drug that would cost you less money than another drug you might be prescribed? Q810 In the past 12 months, have you had to switch from a drug you had already been taking to a less expensive drug in order to save money? Base: All Respondents Page 55

OOP Cost-Based Drug Selection by Co-Pay Coverage Patients With Employer-Sponsored Health Care People with MTC plans are twice as likely as those in non-tiered plans to experience cost-based drug selection. Experienced any cost-based drug selection 17% 33% 54% a,b -Patient asked doctor or pharmacist to give them less costly drug 12% 24% 41% a,b -Doctor chose one drug over another to save patient money 9% 17% a 34% a,b -Patient switched from drug already taking to less expensive drug to save money 7% 11% 21% a,b Non-Tiered (a) 2 tiers (b) 3+ Tiers (c) Q800 In the past 12 months, has your doctor chosen a particular drug for you instead of another drug he or she might prescribe in order to save you money? Q805 In the past 12 months, have you asked your doctor or pharmacist to give you a drug that would cost you less money than another drug you might be prescribed? Q810 In the past 12 months, have you had to switch from a drug you had already been taking to a less expensive drug in order to save money? Base: All Respondents (non-tiered n=365; 2 tiers n=335; 3+ tiers n=274) Page 56

Problems With Medication in Past Year: by OOP Cost-Based Drug Selection Patients With Employer-Sponsored Health Care Patients who experienced cost-based drug selection are twice as likely as those who haven t to report experiencing problems with their medications in the past year. b 25% 27% b 14% 12% Not being effective in treating the condition for which it was prescribed Experienced Cost-Based Drug Selection (a) Causing negative side-effects No Cost-Based Drug Selection (b) Q520. Thinking about any medication you have taken for a chronic condition in the past 12 months, was there ever a problem with that medication? Base: Taken R X Medication for Chronic Illness (total n=2365; experienced drug substitution n=791; no substitution n=1503) Page 57

Problems With Medication in Past Year: by Co-pay Coverage Patients With Employer-Sponsored Health Care Patients in MTC plans are twice as likely as those in non-tiered plans to report experiencing problems with their medications in the past year. Not being effective in treating the condition for which it was prescribed 12% 22% a 27% a Causing negative side-effects 15% 25% a 29% a Non-Tiered (a) 2 Tiers (b) 3+ Tiers (c) Q520. Thinking about any medication you have taken for a chronic condition in the past 12 months, was there ever a problem with that medication? Base: Taken R X Medication for Chronic Illness (non-tiered n=309; 2 tiers n=301; 3+ tiers n=256) Page 58

Topics Discussed With Pharmacist Patients With Employer-Sponsored Health Care Patients in MTC plans are much more likely than others to discuss less expensive medication alternatives and details of their drug plans. b a 55% 53% 53% 44% 45% 39% 40% 36% 45% 45% 45% 41% a,b 21% 11% 11% 9% a,b 28% a 25% 18% 18% 15% Alternative medications that may cost less Details of drug plan Other treatments for condition Dosage Other medicines that might interact How/when to take the Rx Possible side effects Non-tiered (a) 2 Tiers (b) 3+ Tiers (c) Q900. Thinking of the times when you go to a pharmacy to get a new prescription filled or pick up the prescription, do you typically discuss with a pharmacist? Base: All Respondents (non-tiered n=365; 2 tiers n=335; 3+ tiers n=274) Page 59

Pharmacist Practice Demographics Total % Pharmacy Type Chain 66 Independent 34 Total % Chain Independent Region East 20 (%) 19 (%) 22 South 38 39 37 Midwest 23 22 25 West 19 20 17 Years in Practice < 5 14 16 11 5 15 34 37 29 16 29 34 32 38 30 or more 17 15 22 Average Years in Practice 17.6 16.5 19.6 Average Prescriptions Filled Per Week 767 809 685 Average Hours Worked Per Week 41.7 41.2 42.7 Q330. For how many years in total have you practiced as a pharmacist in retail settings? Q335. Approximately how many prescriptions do you personally fill per average week? Q340. In an average week, approximately how many hours do you work as a retail pharmacist? Base: All Qualified Respondents (n=1001) Page 61

Prescriptions Filled by Therapeutic Class Pharmacists % Who Listed Drug Class Among Top 5 Most Frequently Filled Prescriptions Psychotherapeutics Antianxiety 30 Psychotherapeutics Antidepressants 64 Psychotherapeutics Antipsychotics 5 Psychotherapeutics Other 1 Vascular agents - ARBs, including ACEs 44 Vascular agents - Alpha blockers, Beta blockers, Alpha-beta blockers 31 Vascular agents CCBs 4 Vascular agents - Other 1 Oral systemic anti-infectives 42 Analgesics 61 Hormones 25 Respiratory therapy 12 Top 5 most frequently filled prescriptions are indicated in red Q345. For which 5 classes of drugs do you most frequently fill prescriptions? Please choose up to 5 drug classes from the list below. Base: All Qualified Respondents (n=1001) Page 62

Prescriptions Filled by Therapeutic Class (cont.) Pharmacists % Who Listed Drug Class Among Top 5 Most Frequently Filled Prescriptions Gastrointestinal 25 Antiarthritics 10 Antihyperlipidemics 30 Diabetes therapy 48 Diuretics 7 Neurologic - Anti-seizure medications 8 Neurologic Neuralgia 6 Neurologic - Alzheimer s disease/dementia 1 Neurologic Other 2 Thyroid therapy 18 Antihistamines 17 Cardiac agents - Coronary vasodilators 5 Cardiac agents - Positive inotropic agent 1 Oral anti-fungal agents * Genitourinary 1 Top 5 most frequently filled prescriptions are indicated in red Q345. For which 5 classes of drugs do you most frequently fill prescriptions? Please choose up to 5 drug classes from the list below Base: All Qualified Respondents (n=1001) Page 63

Prescriptions Covered by Health Plan/Insurance Pharmacists 80% of all prescriptions pharmacists fill are covered by some kind of health plan. Mean % of Total Total Prescriptions Filled Per Week 767 100 # Covered by Insurance or Health Plan 619 80 # Covered by plans with co-pay* # Covered by plans with coinsurance* # Covered by plans with combination of both* 404 79 67 52 11 9 Prescriptions (per week) denied coverage due to steptherapy restrictions 5.8 0.7 Q335. Approximately how many prescriptions do you personally fill per average week? Q410. In an average week, approximately how many of the prescriptions you fill are paid, at least in part, by an insurance company or health plan? Q500/501. Approximately how many of the prescriptions you fill in an average week (that are covered by an insurance company or health plan) are covered by each of the following? Q505. About how many times in the past four weeks was coverage for a prescription you tried to fill denied because it was out of sequence in a mandated step-therapy requirement? (re-calculated as number per week) Base: All Qualified Respondents (n=1001) *Base: Fill prescriptions that are covered by Insurance/Health Plan Page 64

Knowledge of Multi-Tier Drug Plans Pharmacists Pharmacists are very confident in their own understanding of options available under multi-tier drug plans, but believe patients are far less knowledgeable. 64% 52% 40% 23% 8% 10% 0% 2% Very knowledgeable Somewhat knowledgeable Not very knowledgeable Not at all knowledgeable Pharmacists' Assessment of Patient Knowledge Pharmacists' Assessment of Own Knowledge Q510. In your opinion, how knowledgeable are patients about the options they have under the multi-tier drug plans? Q515. How knowledgeable are you, as a pharmacist, about the options patients have under their multi-tier drug plans? Base: All Qualified Respondents (n=1001) Page 65

Knowledge of Multi-Tier Drug Plans Independent vs. Chain Pharmacists Chain and independent pharmacists give similar assessments of their knowledge of options available under multi-tier drug plans. Patients Knowledge Pharmacists Knowledge 49% 53% 42% 39% 66% 62% 25% 21% 9% 7% 11% 10% 0% 0% 2% 3% Very knowledgeable Somewhat knowledgeable Not very knowledgeable Not at all knowledgeable Independent (a) Very knowledgeable Chain (b) Somewhat knowledgeable Not very knowledgeable Not at all knowledgeable Q510. In your opinion, how knowledgeable are patients about the options they have under the multi-tier drug plans? Q515. How knowledgeable are you, as a pharmacist, about the options patients have under their multi-tier drug plans? Base: All Qualified Respondents (Independent: n=320; Chain: n=681) Page 66

Time Spent On Professional Activities Actual vs. Ideal Pharmacists Pharmacists would ideally spend more time educating patients and less time communicating with health plans Activity Filling prescriptions including compounding, counting/measuring doses, labeling, controlled substance reporting, checking for interactions, etc. Mean Rank Order Actual 1 Ideal 2 Communicating with/educating patients on treatments, dosages, how to take medications, etc. Communicating with health plans/insurers about patients drug benefits, including required paperwork Performing administrative tasks including order entry, bookkeeping, managing staff, etc. Communicating with/educating patients on their drug benefits, etc. Communicating with physicians about patients drug benefits 2 3 4 5 6 1 6 4* 3 4* Q400/401. Please rank each of the following activities in terms of the amount of time you spend performing them in a typical week, where 1 = spend most time performing and 6 = spend least time of amount on. Q405/406. Now rank each of the following activities in terms of how much time you would ideally like to spend on them, where 1 = spend most time performing and 6 = spend least time of amount on. Base: All Qualified Respondents (n=1001) * Indicates a tie Page 67

Effects of Managed Health Care/Formularies: Job Difficulty Pharmacists Almost nine in ten pharmacists say their jobs are more difficult now compared to 5 years ago. They attribute much of the difficulty to drug formularies. Job Difficulty vs. Five Years Ago Causes of Job Difficulty 4% Much/Somewhat Easier 9% About The Same 92% 29% 92% 39% 87% 36% Somewhat A Great Deal 42% Much More Difficult 45% Somewhat More Difficult 63% 53% 51% 36% 30% 6% The move toward drug formularies Multi-tier drug plans Rising out-ofpocket costs for consumers More alert consumers Q820. Compared to 5 years ago, would you say that overall your job has become.? Base: 5 Years in a Retail Setting Q825. To what extent is this due to each of the following? Base: Job Has Become Somewhat/Much More Difficult Page 69

Job Difficulty vs. Five Years Ago by Years in Practice Pharmacists Pharmacists say their jobs are more difficult compared to five years ago, regardless of how long they have been practicing. Job Somewhat/Much More Difficult 88% 84% 88% 90% Total (a) Less than 10 Years (b) 11-22 Years (c) 23 Years or More (d) # Years in Practice Q820. Compared to 5 years ago, would you say that overall your job has become.? Base: 5 Years in a Retail Setting (n=856) Page 70

Changes in Professional Activities as a Result of Multi-Tier Drug Plans Pharmacists Pharmacists spend more time now performing some of the activities they least prefer. Percent Who Spend Somewhat/Much More Time on Each Task Than They Did Before These Plans became Widespread Ideal Rank Communicating with/educating patients on their drug benefits, etc. Communicating with health plans/insurers about patients drug benefits, including required paperwork Communicating with physicians about patients drug benefits 83 82 73 3 6 4* Performing administrative tasks including order entry, bookkeeping, managing staff, etc. Filling prescriptions including compounding, counting/measuring doses, labeling, controlled substance reporting, checking for interactions, etc. Communicating with/educating patients on treatments, dosages, how to take medications, etc. * Indicates a tie 31 28 27 4* 2 1 Q800/801. Have multi-tier drug plans caused you to spend less time, about the same, or more time on each of the following tasks than you did before such plans became widespread? Base: 5 Years in Retail Setting (n=856) Q405/406. Now rank each of the following activities in terms of how much time you would ideally like to spend on them, where 1 = spend most time performing and 6 = spend least time of amount on. Base: All Qualified Respondents (n=1001) Page 71