Navigation Links
Brand Drug 'Copay Coupons' Undermine Generics, Raise Health Costs by $1.8 Billion in Pennsylvania
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 $1.8 billion in Pennsylvania 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 Pennsylvania taxpayers an extra $207 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 Pennsylvania, taxpayers will pay an extra $207 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 200-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:12/8/2016)... Dec. 8, 2016  A new study by a ... use of opioid therapy to treat chronic pain is ... of more harmful consequences, including death. Palliative ... Zankhana Mehta , M.D., authored the study which ... opioid therapy. The study was published in the December ...
(Date:12/8/2016)... Dec. 8, 2016 A Small Business Innovative ... Institutes of Health (NIH) to Phoenix ... The grant will seek to determine an ... which utilizes electromagnetic waves to treat Alzheimer,s Disease. The ... technology to possibly treat other neurologic disorders such as ...
(Date:12/8/2016)... Dec. 8, 2016  Economic growth in the United ... and supply management executives in their December 2016 Semiannual ... economic recovery that began in mid-2009, as indicated in ... ® . The manufacturing sector is optimistic about ... 16 manufacturing industries, and the non-manufacturing sector indicates that ...
Breaking Medicine Technology:
(Date:12/8/2016)... ... 2016 , ... SunView Software aims to redefine IT self-service ... engaging and easy to use. Coming off the heels of a successful launch ... plans to roll out new AI-powered self-service enhancements to help organizations implement effective ...
(Date:12/8/2016)... ... ... California Senate Bill (SB) 863, signed into law in 2012, may have ... according to CompScope™ Medical Benchmarks for California, 17th Edition , a study by ... payments per claim in California decreased 4 percent in 2013 and then 3 percent ...
(Date:12/8/2016)... ... December 08, 2016 , ... ... services from offices headquartered in Hamilton County, is embarking on a charity drive ... specializes in finding new homes for orphaned or neglected senior dogs in the ...
(Date:12/8/2016)... ... December 08, 2016 , ... Coffey Agencies, a locally owned ... clients in the northern Alabama and Georgia regions, is embarking on a charity ... Works has built a network of support and education facilities to develop and ...
(Date:12/7/2016)... ... 07, 2016 , ... Kenall Manufacturing, a leader in sealed healthcare lighting for ... is a multi-function, sealed, LED luminaire that meets the needs of everyone in the ... needed. , A 2’ x 4’ model features four modes: reading, ambient, ...
Breaking Medicine News(10 mins):