To estimate the impact of adherence to and persistence with atypical antipsychotics on health care costs and risk of hospitalization by controlling potential sources of endogeneity. Retrospective cohort study using medical and pharmacy claims data. Humana health care insurance database. A total of 32,374 patients with a diagnosis of schizophrenia or bipolar disorder and who had a prescription for noninjectable atypical antipsychotics (aripiprazole, asenapine, clozapine, iloperidone, lurasidone, olanzapine, paliperidone, quetiapine, risperidone, or ziprasidone), after a washout period of at least 180days during which there was no use of any atypical antipsychotics, between January 2007 and June 2013. The effects of adherence (proportion of days covered by all atypical antipsychotic prescription fills) to and persistence (time from initiation to discontinuation of therapy) with atypical antipsychotics on outcomes (all-cause total health care costs, medication costs, medical services costs, and inpatient admissions) were examined. To exclude potential bias due to mutual causality between drug use patterns and health care utilization, the effects of adherence and persistence measured in the first year on outcomes measured in the second year were investigated. Instrumental variable regressions using reimbursement rate and mail order as instrumental variables were conducted to correct potential endogeneity due to omitted variable bias. Being adherent decreased total costs by $19,497 (p<0.05), increased medication costs by $8194 (p<0.001), decreased medical services costs by $27,664 (p<0.001), and reduced hospitalization risk by 27% (p<0.001). Being persistent decreased individual total costs by $23,927 (p<0.05), increased medication costs by $10,278 (p<0.001), and decreased medical services costs by $34,178 (p<0.001). We could not identify a significant association between persistence and the risk of hospitalization. Good adherence to and persistence with atypical antipsychotics led to lower total costs than poor adherence and persistence. Thus efforts should be made to improve adherence and persistence in patients taking atypical antipsychotics.
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