Navigation Links
Brand Drug 'Copay Coupons' Undermine Generics, Raise Health Costs by $2.3 Billion in New York
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 $2.3 billion in New York 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 York taxpayers an extra $379 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 York, taxpayers will pay an extra $379 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. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $681 Million in Missouri
2. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $1.4 Billion in Illinois
3. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $1 Billion in New Jersey
4. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $1.1 Billion in Michigan
5. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $308 Million in Arkansas
6. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $447 Million in Connecticut
7. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $2.1 Billion in Florida
8. Report: Brand Drug Copay Coupons Raise Health Costs for Employers, Unions, and State Governments by $32 Billion
9. UBM Live to Roll Out Pharma Contract Services & Outsourcing Brand in the US in 2012
10. Popular Sleep Supplement Brand Settles Patent Infringement Suit Against Store Brand Manufacturer
11. Prasco Named Exclusive U.S. Distributor for Selected Aspen Branded Products
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:9/27/2017)... and NEW YORK , Sept. 27, 2017 ... mobile health and big data solutions, today announced that its MyDario product ... check your local TV listings for when The Dr. Oz Show airs ... The ... this month. ...
(Date:9/23/2017)... -- Janssen Biotech, Inc. (Janssen) announced today that it ... Food and Drug Administration (FDA) for the Biologics License ... of moderately to severely active rheumatoid arthritis (RA). The ... to further evaluate the safety of sirukumab in the ... "We are disappointed by ...
(Date:9/19/2017)... HistoSonics, Inc., a venture-backed medical device company developing a non-invasive, robotically assisted, platform therapy that ... developments today:   ... ... Tom Tefft ... Veteran medical device executive Josh Stopek , PhD, who has led R&D and ...
Breaking Medicine Technology:
(Date:10/13/2017)... ... October 13, 2017 , ... As health professionals work to improve their approach ... patient is doing more than filling out a survey; in many cases health professionals ... emphasis in health care and research on the importance of active engagement with patients ...
(Date:10/13/2017)... ... October 13, 2017 , ... ... ‘17, and Jennifer Huggins, PharmD ’17, along with clinical associate professor Janice ... of cardiovascular diseases during the 15th Annual Women’s Health Conference. The SIU ...
(Date:10/13/2017)... ... , ... Ellevate Network, the leading network for professional women, brought together some ... at their inaugural Summit in New York City in June. The event was livestreamed ... over 3 million. To watch the Mobilize Women video, click here . ...
(Date:10/13/2017)... ... October 13, 2017 , ... “The Journey: From the Mountains to ... to save lost souls in the Philippines. “The Journey: From the Mountains to the ... teacher of the Bible. She has taught all ages and currently teaches a class ...
(Date:10/12/2017)... ... October 12, 2017 , ... The company has developed ... consumer and regulatory authorities worldwide. From Children’s to Adults 50+, every formula has ... highest standard. , These products are also: Gluten Free, Non-GMO, Vegan, Soy ...
Breaking Medicine News(10 mins):