The Impact of Cost on Medication Adherence

By Matt Phillion

The correlation between prescription abandonment and medication cost is undeniable. According to a 2020 report by the IQVIA Institute for Human Data Science, prescription abandonment rates are less than 5% when the prescription carries no out-of-pocket expense, but jump to 45% when the cost is over $125 and to 60% when the cost is more than $500. Coupled with the fact that more than half of Medicare Part D drug prices are outpacing inflation, we’re looking at a situation where patients are choosing between their basic needs or their medications.

“The reality is, if you simply believe medicine works—that people will be healthier and the cost of care will be reduced starting with that root principle—you can improve outcomes if patients take their drugs as directed by their doctor,” says Jason Rose, CEO of AdhereHealth LLC.

But this doesn’t always happen, notes Rose. Some 50% of Americans don’t take their medications as directed by their doctor, for any of a host of reasons. This non-adherence leads to preventable hospitalizations and preventable deaths, and costs 16% or $500 billion of the entire U.S. healthcare spend every year.

A lot of moving pieces can cause medication non-adherence, of course: Social determinants of health such as food insecurity, medication literacy, access to care, and pharmacy deserts all add to the burden. But one of the main issues is cost. “If the patient can’t afford a drug, they’ll choose other things above that,” says Rose. “If it’s a choice between food or medication, or between food or the cost to get to the pharmacy, that’s a hurdle.”

The federal government is initiating regulatory changes to try to alleviate this with Real Time Benefit Tools, which require transparency in drug prices. One of the regulations was rolled out in 2021, requiring clinicians to have point-of-care access to drugs that can substitute for more expensive meds. In theory, if a doctor is prescribing a medication, an EHR that is integrated with a Real Time Benefit Tool should alert the provider if a lower-cost medication option exists for their patient.

“This sounds like a great idea, but it doesn’t work well. It isn’t really technically in the process of how prescribing really works,” says Rose.

A trio of challenges

The federal regulatory changes run into several hurdles that aren’t necessarily apparent when considering them on a conceptual level. The first challenge: The data is often incorrect in the EHR. “Interoperability in the EHR is so complex,” says Rose. “It’s difficult to take external information and put it into an EHR system for decision support at the point of care.”

In order to comply with regulations, EHRs need to find the easiest path, such as using generic formulary data with native EHR interoperability. “That’s where it would say this patient has this list of drugs. Here’s a list of tiers, and for each tier it’s more in copays for both the patient and the insurer,” says Rose. “And if it’s off the formulary, you don’t get the benefit of prescription drug programs you’re involved in.”

But a generic formulary is far from a panacea. “There are so many variables in the tiered formulary from plan to plan. It’s extremely complicated and it changes a lot, too.” Additionally, notes Rose, “that one generic formulary is wrong an estimated 50% of the time. So now the doctor is looking at substitute medications and can’t have the confidence that that data being shown is actually going to be correct.” The drug might actually be off-formulary or even cost more than the medication it would substitute for, he says.

The second issue is that if the patient is already on a medication, such as for a chronic condition, physicians won’t periodically go into the EHR and hunt down potential reduced-cost options. “This [substitution] is really only useful at the beginning—there’s no reason for anyone to go into the EHR system and change it unless something new pops up, a new issue or complication,” says Rose. “They’re just going to stay on the same drug because they’re good, they’re taking the drug, and nobody’s complaining.”

The third issue is how prescribing works depending on practice groups and patterns, Rose explains. Practice group staff working with the physician often assemble charts for the physician to approve, and a lot of this process happens outside the EHR. “The staff has already recommended this is the right drug for the physician to prescribe based on the patient’s insurance. [However,] they don’t have accurate information in terms of pricing,” says Rose.

Overall, he notes, the Real Time Benefit Tools are “a great idea, but really a failed regulatory implementation to reduce costs because of how healthcare works. If the end users don’t have the right pieces to make the right decision in their clinical workflow, they’re not going to have confidence in the system and will use their usual routine.”

The right data, the right access

To overcome these challenges, organizations need systems that don’t rely on a generic formulary. These systems should be continually updated “so there’s confidence that you have the right data,” says Rose, “as well as the clinical evidence that shows that the suggested alternatives are viable and enable you to make the right decisions and have the right support.”

All of this requires a lot of work, however. There’s no singular EHR system, and nearly every EHR in the country is customized to its parent organization. “There’s no consistency, and all have different variations of how they’re implemented,” says Rose. “You can’t take one custom data exchange and put it into Epic, for example. You’ve got to go one health system or practice group at a time.”

How the information is communicated is important, too. Despite the amount of money pumped into EHR deployment, medical communication still largely occurs via fax, with some experts indicating as many as 75% of communications are sent this way. But fax isn’t necessarily a bad thing if used correctly, notes Rose. “If you can get this data into facsimile and not overwhelm their offices with 100 faxes a day—find ways to batch them in more sophisticated ways so it’s not annoying and it’s conducive to their workflow—you can really use the fax to your advantage.”

While it may feel anachronistic to think about the impact of fax, opportunities exist for forward-looking technology as well, such as telepharmacy services that review medications with patients over the phone or online. “If that data is near real time—that a patient could substitute this drug for that drug, and there’s clinical evidence that says this substitution works—then the pharmacist can have a conversation with the patient and really empower them,” says Rose. “Provide them with the right documentation to get to the doctor.”

A matter of confidence

If a provider can’t rely on the system in place to guide them in making drug substitutions, change won’t be possible, Rose explains. “That’s why I keep leaning on the word confidence,” he says. “If the clinician has confidence the data in front of them is correct for the patient, that’s the first thing. Right now they don’t have confidence in the formulary data contained in the EHR system.”

The second hurdle—one that overlaps with the first, Rose notes—is the clinical evidence that the drug substitutions will be just as effective. “That to me is critical,” he says. “Most patients have confidence in their doctor or pharmacist. That’s why they go to them, to get clinical advice. If the clinician doesn’t have the confidence, there’s no way the patient does. But if the doctor or pharmacist says you can save hundreds of dollars with a substitute therapy, most people will trust their care team and make that change.”

A provider must be able to decide on a drug substitution with a firm belief that the quality of the treatment will be the same, even if the cost is not. “Pharmacists, doctors, and nurse practitioners are focused on good quality of care,” says Rose. “If you don’t make it easy for clinicians to make a decision based on clinical effectiveness and cost, it won’t be their focus. The solution has got to be intentional.”

Beyond cost, improving adherence requires a holistic approach that loops in all stakeholders, including the health plan itself. Studies show that roughly 30% of patients with hypertension, hyperlipidemia, or diabetes never initiate their prescriptions. And if a patient doesn’t initiate their prescribed drug therapy, the pharmacy benefit management company won’t know the patient was prescribed that drug in the first place. Physicians also aren’t tracking to see if patients are picking up their drugs, and so that interaction is in the ether between doctor visits.

“We need a system that looks at the diagnosis, the drugs filled, and at the incongruence between the medical care and the pharmacy interactions,” says Rose. “When we’re talking about the patient experience and the cost of care, I think it’s one of the top issues in that healthcare is just not focused on this holistically.”

The simplest path is often the right path, Rose says. Here, that means ensuring patients are adhering to their medications for better outcomes and lower financial and human costs. “We can tackle this,” says Rose. “We have the drugs, they’re here, and we could fix a lot of these issues if we got them into the hands of the patients.”

Matt Phillion is a freelance writer covering healthcare, cybersecurity, and more. He can be reached at