Introduction Across the world, health systems are adopting approaches to manage rising healthcare costs. One common strategy is a medication copayments scheme where consumers make a contribution (copayment) towards the cost of their dispensed medicines, with remaining costs subsidised by the health insurance service, which in Australia is the Federal Government. In Australia, copayments have tended to increase in proportion to inflation, but in January 2005, the copayment increased substantially more than inflation. Results from aggregated dispensing data showed that this increase led to a significant decrease in the use of several medicines. The aim of this study is to determine the demographic and clinical characteristics of individuals ceasing or reducing statin medication use following the January 2005 Pharmaceutical Benefit Scheme (PBS) copayment increase and the effects on their health outcomes. Methods and analysis This whole-of-population study comprises a series of retrospective, observational investigations using linked administrative health data on a cohort of West Australians (WA) who had at least one statin dispensed between 1 May 2002 and 30 June 2010. Individual-level data on the use of pharmaceuticals, general practitioner (GP) visits, hospitalisations and death are used. This study will identify patients who were stable users of statin medication in 2004 with follow-up commencing from 2005 onwards. Subgroups determined by change in adherence levels of statin medication from 2004 to 2005 will be classified as continuation, reduction or cessation of statin therapy and explored for differences in health outcomes and health service utilisation after the 2005 copayment change. Ethics and dissemination Ethics approvals have been obtained from the Western Australian Department of Health (#2007/33), University of Western Australia (RA/4/1/1775) and University of Notre Dame (0 14 167F). Outputs from the findings will be published in peer reviewed journals designed for a policy audience and presented at state, national and international conferences.