Navigation Links
Brand Drug 'Copay Coupons' Undermine Generics, Raise Health Costs by $1 Billion in New Jersey
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 billion in New Jersey 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 New Jersey taxpayers an extra $160 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 New Jersey, taxpayers will pay an extra $160 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:6/30/2017)... , June 30, 2017 In vitro diagnostics ... start of May, at least ten diagnostic companies have ... investments, public offerings and a loan facility.  The size ... almost $80 million.  Kalorama Information provides a monthly ... Diagnostics Knowledge Center. ...
(Date:6/30/2017)... -- Axium Pharmaceuticals Inc. is a pharmaceutical company aimed at utilizing drug ... forms of existing biologically active molecule. ... Subveta oral spray ... formula, which is designed to prevent precipitation of the active ... provide fast onset of action and is designed to optimize ...
(Date:6/27/2017)... 2017   NuEyes (NuEyes Technologies Inc.) today announced ... its growth in helping the legally blind live more independent ... the leading developer of augmented, virtual and mixed reality smartglasses ... The undisclosed funding amount was provided by strategic partners as ... offices in Abu Dhabi , ...
Breaking Medicine Technology:
(Date:7/20/2017)... ... July 19, 2017 , ... Western ... Resources and Services Administration (HRSA) grant to train predoctoral dental students in providing ... in rural and underserved areas. , The Predoctoral Pediatric Training Project (PPTP), a ...
(Date:7/20/2017)... ... , ... A July 5th article on Reuters Health News discusses ... a body contouring procedure reported experiencing a better quality of life, compared to other ... both types of procedures, notes that this report jibes with what they regularly hear ...
(Date:7/20/2017)... (PRWEB) , ... July 20, 2017 , ... “Fidget”: a ... Sisk, a retired public high school music and drama teacher who was a summa ... educational career, including a “Teacher of the Year” award. After her retirement from public ...
(Date:7/18/2017)... (PRWEB) , ... July 18, 2017 , ... CannaKids, a ... extracted cannabis oils, announced today that at the WORLDZ Summit, taking place in ... speaking on the therapeutic benefits of medical cannabis for both pediatric and adult patients, ...
(Date:7/18/2017)... ... 18, 2017 , ... ClinicalTrials.gov and the New Final Rule ... Consider?, **An FDAnews Webinar**, Aug. 2, 2017 — 1:30 p.m. – 3:00 p.m. ... Clinical Trials Registration and Results Information,” is a head-scratcher. After reading and re-reading ...
Breaking Medicine News(10 mins):