Navigation Links
Brand Drug 'Copay Coupons' Undermine Generics, Raise Health Costs by $1.1 Billion in North Carolina
Date:11/17/2011

WASHINGTON, Nov. 17, 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 North Carolina 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 North Carolina taxpayers an extra $187 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 North Carolina, taxpayers will pay an extra $187 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. WaveSense Blood Glucose Meter One of Few Brands to Pass Rigorous TNO Tests
2. Cantel Medical Corp.s Crosstex Subsidiary Addresses School MRSA Concerns With SaniTyze(TM) Brand Hand Sanitizer and Sanitex(R) Surface Disinfecting Line of Products
3. Generic Substitutes Less Effective/Safe Than Branded Medications in Treating Lower Urinary Tract Symptoms
4. Octapharma USA Announces FDA Approval of wilate(R) - the First Replacement Therapy Developed Specifically for von Willebrand Disease
5. Lupin Expands Branded Play
6. Verathon(R) Helps Physicians Identify the Presence of Abdominal Aortic Aneurysms with New AortaScan(TM) Brand of Portable Ultrasound Aortic Measurement Instruments
7. Frutarom Launches New Global Branding
8. Biosimilar Insulins and Insulin Analogues Stand to Erode $6.1 Billion in Brand Sales in the U.S. and Europe by 2018
9. Reportlinker Adds Driving Successful Pharma Brands: Case Studies of Real Product Launches
10. Warner Chilcott Completes Acquisition of P&Gs Global Branded Prescription Pharmaceuticals Business
11. Octapharma Receives Orphan Drug Exclusivity Approval for wilate(R) - A Replacement Therapy Developed Specifically for von Willebrand Disease
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/24/2016)... SOUTH SAN FRANCISCO, Calif. , June 24, ... GBT ), a biopharmaceutical company developing novel ... with significant unmet needs, today announced the closing ... 6,400,000 shares of common stock, at the public ... the shares in the offering were offered by ...
(Date:6/24/2016)... , June 24, 2016 The Academy of ... recommendations that would allow biopharmaceutical companies to ... entities that make formulary and coverage decisions, a move ... of new medicines. The recommendations address restrictions ... appear on the drug label, a prohibition that hinders ...
(Date:6/24/2016)... -- According to a new market research ... Safety Pen Needles), Needle Length (4mm, 5mm, 6mm, 8mm, ... Purchase (Retail, Non-Retail) - Trends & Global Forecasts to ... for the forecast period of 2016 to 2021. This ... 2021 from USD 1.65 Billion in 2016, growing at ...
Breaking Medicine Technology:
(Date:6/27/2016)... , ... June 27, 2016 , ... ... edge technology to revolutionize the emergency ambulance transport experience for the millions of ... of how Uber has disrupted the taxi industry through the use of technology. ...
(Date:6/26/2016)... , ... June 26, 2016 , ... Pixel Film Studios ... X. , "Film editors can give their videos a whole new perspective by using ... - CEO of Pixel Film Studios. , ProSlice Levels contains over 30 Different ...
(Date:6/25/2016)... D.C. (PRWEB) , ... June 25, 2016 , ... ... discuss health policy issues and applications at AcademyHealth’s Annual Research Meeting June 26-28, ... their work on several important health care topics including advance care planning, healthcare ...
(Date:6/25/2016)... ... June 25, 2016 , ... First Choice Emergency Room , the ... Ogunleye, as the Medical Director of its new Mesquite-Samuell Farm facility. , “We ... new Mesquite location,” said Dr. James M. Muzzarelli, Executive Medical Director of First Choice ...
(Date:6/25/2016)... ... ... Conventional wisdom preaches the benefits of moderation, whether it’s a matter of indulgence ... high can result in disappointment, perhaps even self-loathing. However, those who set the bar ... from PsychTests.com reveals that behind the tendency to set low expectations is ...
Breaking Medicine News(10 mins):