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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 o
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SOURCE Pharmaceutical Care Management Association
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