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:5/10/2017)... 2017 Global Health Intelligence (GHI), the ... , published its 2017 ranking of the Best-Equipped ... extensive data analysis from GHI,s hospitals database for Latin ... the region. The GHI database covers 86% of the hospitals ... 130 data points for each institution in key areas such ...
(Date:5/10/2017)... Ill. , May 10, 2017 Radiology ... today; unfortunately its costs have also spiraled to the ... being sent to radiology than ever before as the ... diagnosis.  For a patient with lower back pain an ... no anatomical reason for pain, resulting in entirely different ...
(Date:5/9/2017)... Ind. , May 9, 2017 Zimmer ... leader in musculoskeletal healthcare, today announced it has earned ... Employers of 2017" list. The Company was ranked among ... of Large Employers and Healthcare Equipment and Services. ... employers based on an anonymous, independent survey of over ...
Breaking Medicine Technology:
(Date:5/24/2017)... , ... May 24, 2017 , ... ... implants in Bayside, NY, who have now spent 10 years as clinical instructors ... York University (NYU) College of Dentistry. Through the program, private practitioners receive cutting-edge ...
(Date:5/24/2017)... NV (PRWEB) , ... May 24, 2017 , ... ... NV, recently completed Course II of the HP3 (High-Performance Periodontal Practice) continuing education ... to learning the latest advancements in his field by attending numerous CE courses ...
(Date:5/24/2017)... ... May 24, 2017 , ... ... offering holistic pediatric dentistry options for its patients on Long Island, New York. ... entire physical well being, and is one of the biggest trends in dentistry ...
(Date:5/24/2017)... ... May 24, 2017 , ... ... sleep diagnostics sensors, announced today it had completed the first phase of building ... of domestic and rest of world (ROW) authorized dealers specializing in polysomnography accessories. ...
(Date:5/23/2017)... (PRWEB) , ... May 23, 2017 , ... ... in North Carolina have remained steady since 2009, according to a Workers Compensation ... , The study Monitoring the North Carolina System: CompScope™ Benchmarks, 17th Edition ...
Breaking Medicine News(10 mins):