Navigation Links
Brand Drug 'Copay Coupons' Undermine Generics, Raise Health Costs by $1.1 Billion in Michigan
Date:11/16/2011

WASHINGTON, Nov. 16, 2011 /PRNewswire-USNewswire/ -- The proliferation of brand drug "copay coupon" promotions, which lure insured consumers from generics to more expensive brands, will increase costs by $1.1 billion in Michigan over the next decade for employers, unions, and state employee plans, according to new research from Visante and released by the Pharmaceutical Care Management Association (PCMA).  The use of these promotions by state and local government workers alone will cost Michigan taxpayers an extra $170 million over ten years.

Click here to read the study

Unlike groceries and other goods that are purchased directly by consumers, 2/3 of prescription drug costs are paid by the employers, unions, and government agencies (i.e., taxpayers) that provide coverage, not consumers themselves.  Though banned as illegal kickbacks in federal health programs, copay coupons are unregulated in the commercial market (except Massachusetts).  

To minimize premiums and reduce costs, those who offer prescription drug coverage assign higher copays to expensive brands and lower copays to more affordable drugs that treat the same condition.  In response, drug companies now offer coupons that cover the higher copays but not the cost of the actual drug.  By covering a $50 copay to sell a $150 brand, drug companies extract an extra $100 from the employer, union, or government agency that offers coverage.  This helps explain why copay coupons target only those with insurance (i.e., those who pay copays), not the poor or uninsured.

"Brand copay coupons lure patients from generics to expensive brands and stick employers, unions, and government employee health programs with the extra costs," said PCMA President and CEO Mark Merritt.  "In Michigan, taxpayers will pay an extra $170 million just to cover the use of brand copay coupons by government workers in state and municipal employee health programs."

Drug companies profit from coupon promotions in several ways:

  • Copay coupons induce consumers to choose higher-cost brands (despite higher copays) over lower-cost competitors (despite lower copays).  When consumers redeem copay coupons, the drug companies process them through a "shadow claims system" that prevents employers and other plan sponsors from knowing when enrollees have used them.
  • Drug companies often require consumers to submit confidential, personal information in order to redeem copay coupons.  Manufacturers have long sought (but found difficult to obtain) such sensitive patient data, which enables them to identify and directly target individual patients with "brand loyalty" marketing programs.

Coupons can also increase consumer costs in several ways:

  • To help cover the $4 billion spent annually on copay coupons nationally, manufacturers can simply raise prices.  Manufacturers reportedly earn a 4:1 to 6:1 return on investment (ROI) on copay coupon programs.
  • Copay coupons create "brand loyalty" to the most expensive products in each therapeutic class of drugs, even among newly diagnosed patients.

PCMA represents the nation's pharmacy benefit managers (PBMs), which improve affordability and

quality of care through the use of electronic prescribing (e-prescribing), generic alternatives, mail-service pharmacies, and other innovative tools for 210-plus million Americans.

Follow PCMA on Twitter


'/>"/>
SOURCE Pharmaceutical Care Management Association
Copyright©2010 PR Newswire.
All rights reserved

Related medicine technology :

1. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $308 Million in Arkansas
2. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $447 Million in Connecticut
3. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $2.1 Billion in Florida
4. Report: Brand Drug Copay Coupons Raise Health Costs for Employers, Unions, and State Governments by $32 Billion
5. UBM Live to Roll Out Pharma Contract Services & Outsourcing Brand in the US in 2012
6. Popular Sleep Supplement Brand Settles Patent Infringement Suit Against Store Brand Manufacturer
7. Prasco Named Exclusive U.S. Distributor for Selected Aspen Branded Products
8. A New Constant Companion: BodyMedia® Enlists Americas Toughest Trainer, Jillian Michaels, as a Brand Partner
9. DreamBrands New Formula Helps Men Feel Younger and Stronger While Naturally Raising Low-T Without Prescription Drugs
10. Octapharma Launches Clinical Trial to Evaluate Efficacy & Safety of wilate® In Preventing Surgical Bleeding in Type 3 von Willebrand Disease Patients
11. Why the Brand Surgical Institute in L.A. is Fast Becoming the Authority on Weight Loss Surgery
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:2/23/2017)... 2017 Research and Markets has announced the ... - 2016" report to their offering. ... The latest research Oesophageal Cancer Drugs ... benchmarks in the global Oesophageal Cancer market. The research ... the key drugs marketed for Oesophageal Cancer and their clinical attributes? ...
(Date:2/23/2017)... Calif. , Feb. 23, 2017 ... company focused on the development and commercialization of ... pain, announced that it will release fourth quarter ... Thursday, March 2nd, 2017. AcelRx management will host ... Time (1:30 p.m. Pacific Time) on March 2 ...
(Date:2/23/2017)... York , February 23, 2017 ... arising from increasing caseload for varicose veins in their ... the globe are prompting the adoption of endovenous laser ... on global endovenous laser therapy market, published ... aftereffects of lifestyle choices and consequences of obesity have ...
Breaking Medicine Technology:
(Date:2/24/2017)... ... February 24, 2017 , ... Houston ... at his office, Antoine Dental Center. Currently, patients can get single dental implants ... apply, but patients can learn more about these offers by contacting Antoine Dental ...
(Date:2/24/2017)... ... February 24, 2017 , ... The Smart Machine Age ... Oxford University predict that 47 percent of all jobs in the United States may ... and “successful.” The day of the aggressive know-it-all who steamrolls over colleagues is drawing ...
(Date:2/24/2017)... ... February 24, 2017 , ... With ProGlass Prism users now have the ability ... total control over position, rotation, distortion, edge softness, edge blur, chromatic aberration, individual glass ... , With ProGlass Prism users are given the tools and effects to generate ...
(Date:2/24/2017)... ... February 24, 2017 , ... The Radiology Business Management ... radiology marketing programs at the annual Building Better Radiology Marketing Programs conference, ... Hotel in Fort Worth, Texas. Nine awards are given out in five categories. They ...
(Date:2/23/2017)... ... February 23, 2017 , ... On February 22, 2017 the ... to withdraw previous guidance issued by the Obama Administration requiring schools to ... May 2016 by the Obama Administration came in response to a growing number ...
Breaking Medicine News(10 mins):