Prescription Drug Coupons: The Upside
Drug coupons that reduce the copay for brand-name medications have sometimes been criticized for driving up health care costs, but it possible that there's an upside to their use as well?
Disclaimer: The views and opinions expressed in this article are those of the author and do not reflect the official policy or position of Pharmacy Times.
A recent article in the New York Times entitled “Drug Coupons: Helping a Few at the Expense of Everyone” painted a pretty grim and greedy picture of the drug manufacturing industry, and suggested that coupons “may be making drug costs higher for everyone.”1 As a pharmacist regularly involved in using these coupons and interacting with physicians and patients about them, I’d like to suggest a more balanced perspective that doesn’t appear to have been sufficiently appreciated by the author of the article.
Drug coupons are manufacturer programs that allow pharmacies to bill the copay portion (ie, what the patient must pay) to the drug manufacturer who absorbs all or most of that copay, allowing the patient a much more affordable monthly expense. Additionally, these coupons are sometimes used to cover the entire cost of the medication the first time it’s filled, allowing the patient a virtual “free trial” of the product, sometimes entirely at the expense of the manufacturer.
The article rightly pointed out that such practices encourage patients to use and stay on more expensive medications, rather than trying less expensive alternatives. The additional cost of these medications then becomes the burden of the health plan or pharmacy benefit manager (PBM), which in turn will, of course, have to spread out such costs over the entire plan membership in the form of higher premiums. All of that is true.
But what the article seems to ignore is that the PBM or health plan clearly has a profit-incentive to steer patients and their prescribers to the lowest cost product available. These copay cards don’t automatically increase costs for everyone. They eat into the profits of the PBM during the current year (premiums have already been set for this year) and may then result in premium increases in the following year. However, if one is looking at current earnings reports and profits by some of the top health plans, one is hardly inclined to portray them as suffering at the hands of these copay cards.
In an article by Wendell Potter last year, he points out the very comfortable profits being enjoyed by the health insurance industry in the United States: “Let’s be clear, these insurers aren’t suffering. UnitedHealth Group, the largest health insurer, reported last week that it made $10.3 billion in profits in 2014 on revenues of $130.5 billion. Both profits and revenues grew 7% from 2013.”2
It’s simply a business decision to pass along higher premiums to employers and patients rather than taking a hit to the profit line, when patients are allowed to use more expensive, and often more effective, medications.
Not only that, but the article fails to mention that PBMs have already engaged in tough negotiating practices to help reduce their cost-burden through the use of discounts and rebates. Do consumers directly benefit from these rebates? They don’t. It’s as though the author of the article is interested in protecting the health industry from eroding profits more than the consumer from excessive copays.
And what about the prior authorization process that’s usually imposed on these more expensive drugs by the health plan? When the drug’s finally approved, meaning that the health plan and provider are both agreed that it’s appropriate, why shouldn’t the manufacturer help the patient with a reduced copay? In such situations, the higher copay may actually be steering patients away from the most appropriate and medically necessary treatment.
Copay reduction coupons also improve adherence to therapy by making the medication more affordable, sometimes even less expensive than a generic. The result of better adherence is typically better outcomes, which could be argued as a means to lower the overall cost of health care.
I agree with the Massachusetts ban on copay cards for products that have an FDA-approved generic. Although there’s sure to be a small subset of patients who feel the generic is not appropriate for them, this small fraction of patients shouldn’t be allowed to drive up costs when all the medical evidence points to the equivalence of these products.
But when the clinical evidence supports the use of a drug such as ticagrelor (Brilinta) over the risky and burdensome use of a drug such as warfarin (requiring frequent blood work), then I see no reason why the manufacturer should be forbidden from helping the patient with a reduced copay.
This is clearly a tricky topic. Subsidizing patient copays through the use of coupon cards does impact the tier and formulary strategy of the health plan. But it can also be seen as a protection for the patient against unaffordable copays and deductibles, which could put necessary and beneficial medications out of their financial reach. Although I don’t think copay cards are a solution to the rising costs of health care, I also don’t think they’re the great enemy they are sometimes reported to be.
- Sanger-Katz M. Drug coupons: helping a few at the expense of everyone. New York Times website. October 12, 2016. nytimes.com/2016/10/13/upshot/drug-coupons-helping-a-few-at-the-expense-of-everyone.html?_r=0.
- Potter W. Health insurers watch profits soar as they dump small business customers. The Center for Public Integrity website. January 26, 2015. publicintegrity.org/2015/01/26/16658/health-insurers-watch-profits-soar-they-dump-small-business-customers.