The Dark Side of Copay Coupons

Oct 18, 2016
Drug copay coupons, promoted by manufacturers of brand-name medications, may seem like a good deal for patients. But there's another side to the story.

New Pill Bottle

Pharmaceutical manufacturers’ promotion of copay coupons undermine the utilization and cost-controlling programs that enable a sustainable pharmacy benefit for patients and plan sponsors.

This marketing tactic reimburses patients who have prescription-drug coverage for the cost of their copay if they choose the higher-priced brand drug instead of the option preferred by their plan sponsor.

At one time, a drug’s commercial success or failure was largely driven by how well it was received by physicians. So, pharma marketers primarily targeted physicians. When drugmakers found that aggressive direct-to-consumer campaigns could more effectively influence prescription-writing, they shifted their focus to patients. More recently, the commercial success of a drug is largely driven by access to patients. Through strategies like drug formularies, pharmacy benefit managers enable this access.

Pharma marketers have sought to regain control by using the coupons to neutralize the financial incentives plans use to encourage the use of clinically equivalent but lower-priced medications, chiefly generics.

How Copay Coupons Contribute to Pharmacy Waste

To the extent that patients use them, copay coupons inject waste into the healthcare system. A 2011 study from the Pharmaceutical Care Management Association found that copay coupons will increase 10-year prescription-drug costs by $32 billion for employers, unions and other plan sponsors if current trends continue.

Many patients don’t consider the extra cost to the system when offered a chance to reduce their copay to zero. They don’t realize that their employer could be paying hundreds of dollars more, while the patient saves $50 on a copay. And they don't realize that this temporary savings may ultimately contribute to higher premiums or fewer benefits.

Industry Reaction

In the past five years, this hasn’t changed. New research from The New England Journal of Medicine found that when drug companies offered a coupon for the brand-name version, more patients stuck with the more expensive brand-name drug, and the company raised the prices on such drugs faster than it did for drugs for which no coupon was available.

When drugs are removed from coverage, patients lose choices, and pharma loses access to patients. A better solution would be for pharma to work with PBMs and managed care, gaining access due to their products’ merits and deserved role in therapy.

Author Bio

Lab Staff
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