Navigation Links
Brand Drug 'Copay Coupons' Undermine Generics, Raise Health Costs by $2.1 Billion in Florida
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 $2.1 billion in Florida 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 Florida taxpayers an extra $284 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 Florida, taxpayers will pay an extra $284 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.


'/>"/>
SOURCE Pharmaceutical Care Management Association
Copyright©2010 PR Newswire.
All rights reserved

Related medicine technology :

1. Report: Brand Drug Copay Coupons Raise Health Costs for Employers, Unions, and State Governments by $32 Billion
2. UBM Live to Roll Out Pharma Contract Services & Outsourcing Brand in the US in 2012
3. Popular Sleep Supplement Brand Settles Patent Infringement Suit Against Store Brand Manufacturer
4. Prasco Named Exclusive U.S. Distributor for Selected Aspen Branded Products
5. A New Constant Companion: BodyMedia® Enlists Americas Toughest Trainer, Jillian Michaels, as a Brand Partner
6. DreamBrands New Formula Helps Men Feel Younger and Stronger While Naturally Raising Low-T Without Prescription Drugs
7. Octapharma Launches Clinical Trial to Evaluate Efficacy & Safety of wilate® In Preventing Surgical Bleeding in Type 3 von Willebrand Disease Patients
8. Why the Brand Surgical Institute in L.A. is Fast Becoming the Authority on Weight Loss Surgery
9. U.S. Branding Group Ltd. to Sponsor DigiPharm Europe 2011, Showcase PharmaDrive™ USB Insert™ Paper Webkey
10. IMD Announces the Acquisition of the Kidshape® Brand
11. Simceres Branded Generic Formulation Biqi Passes EU-GMP Inspection
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:4/28/2016)... 28, 2016 , Net Sales of $1.90 ... over the prior year period, and an increase of 1.2% ... Diluted EPS for the first quarter were $0.52 reported, a ... adjusted, an increase of 29.9% over the prior year period ... earnings guidance for 2016 Zimmer Biomet Holdings, Inc. ...
(Date:4/28/2016)... 28, 2016 TapImmune,Inc. (TPIV), ... peptide and gene-based immunotherapeutics and vaccines for the treatment of ... at the 3rd Annual Growth Capital Expo to ... 2016 at Caesars Palace in Las Vegas, Nevada.  The ... May 4 th by Dr. John N. Bonfiglio ...
(Date:4/27/2016)... April 27, 2016   ... Growth in Recurring Consumable Sales  Clinical sales ... Kea Technologies (Euronext: MKEA, OTCQX: MKEAY) inventor of Cellvizio®, ... sales for the first quarter ended March 31, 2016 ... execution of its commercial strategy. First Quarter ...
Breaking Medicine Technology:
(Date:4/29/2016)... , ... April 29, 2016 , ... ... data for 2014. Each year, reproductive endocrinologists are required to report in ... main organization of professionals dedicated to the practice of assisted reproductive technologies in ...
(Date:4/29/2016)... Los Angeles, California (PRWEB) , ... April 29, 2016 , ... ... all across USA, 1Heart Caregiver Services continues its successful franchise development and expansion as ... Ferdie has an extensive managerial and administrative experience in his 32 years of working ...
(Date:4/28/2016)... Sacramento, Calif. (PRWEB) , ... April 28, 2016 ... ... subsidiary of the California Dental Association, today announced it has signed a letter ... Dentists Benefits Corporation (DBC) and Northwest Dentists Insurance Company (NORDIC). , Started by ...
(Date:4/28/2016)... , ... April 28, 2016 , ... ... is proud to partner with AquaShieldUSA, the country's oldest waterproof cast protector ... and medical supply stores, the largest selection of daily, night, weatherproof and waterproof ...
(Date:4/28/2016)... Leesburg, Va. (PRWEB) , ... April 28, 2016 ... ... Los Angeles was among the organization’s most successful events, attracting medical professionals from ... education courses, and stimulating networking events. , Opening Ceremonies Sunday, April 17 included ...
Breaking Medicine News(10 mins):