A flat rate fixed fee

 Percentage co-payment system

 Deductible system.

 Clinical conditions – commonly those defined as chronic or life-threatening and requiring essential medication, usually implemented as a list of qualifying conditions or drugs. (In the UK, for example, patients requiring medication for type I or type II diabetes are exempt.)

 Level of income – where people on low incomes are protected against undue expense.

 Age – children are exempt in Austria, France, Germany, Italy, the Netherlands and the UK; older people are exempt or have reduced cost sharing arrangements in Austria, Italy, Japan, Portugal, Spain, the UK and Iceland. (Note: definitions for ‘children’ and ‘older people’ differ in the different countries, the latter being linked to retirement in some.)

Caps on co-payments

Only a few countries (e.g. New Zealand and Sweden) have reduced medication co-payments for high users, but many have some form of cap or ceiling, sometimes also referred to as out-of-pocket maximums. They define the maximum amount a patient should be asked to cost share. Caps can either apply per prescription or be annual ceilings. Caps per prescription exist, for example in Taiwan. Annual caps are probably more common and can either apply to the whole of the population (e.g. Norway, Sweden and Switzerland) or only to certain groups, such as the chronically ill (e.g. Denmark, Finland and Germany). Some countries also have systems where medication co-payments are tax deductible (e.g. Portugal).

Complementary insurance

Complementary insurance covering the cost of prescription co-payments is another form of protection mechanism; patients who have bought this type of insurance do not have to cost share or, if they are asked to pay an amount out-of-pocket, are subsequently reimbursed. Complementary insurance is widespread in France (mutuelle) but can also be found in a number of other countries. In England, a so-called pre-payment certificate (PPC) exists, which can be bought to cover the cost of any prescription charges over a 3- or 12-month period, thus providing a cap through advance payment. The problem with complementary insurance and PPCs is that they only alleviate the financial burden for those who can afford to purchase this cover, and those who can predict in advance that they are likely to benefit (so not ideal for episodic conditions, such as asthma).

Impact on drug consumption

A large body of international literature exists showing that cost sharing reduces access to health services in general (where cost sharing applies), and use of prescribed medication in particular. This is, of course, one of the aims of having such a policy in place, whereby patients respond to cost sharing by assessing whether a visit to their doctor, and the use of prescribed medication in particular, are seen as important enough to warrant the relevant out-of-pocket payment. For unnecessary visits or self-limiting conditions that patients may be able to treat themselves (e.g. either through self-care or the use of self-medication remedies), avoiding the use of formal healthcare may be the most appropriate action. This will save cost to the patient, as no cost sharing is incurred, or possibly a reduced amount is paid if OTC remedies are purchased. It further reduces resource use by the health service itself (third party payment), which is an aim of a cost sharing policy.

Differential effect on essential and less essential medication

Cost sharing should only affect patient demand that may not be entirely clinically necessary, so should only affect the use of less essential medication. The latter is defined as medication that provides symptomatic relief without having an affect on any underlying disease process (see Table 26.1 for a more detailed definition). Indeed, the negative effect of cost sharing on drug utilization has been found to be more pronounced for less essential drugs, but it does also reduce the use of essential medication (Austvoll-Dahlgren et al. 2008). As the terminology suggests, essential drugs are those whose withdrawal would have important effects on morbidity and mortality, and thus a cost-related reduction in essential medication is likely to have a negative effect on health outcomes.