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:8/15/2017)... Inc. announced today that its fully owned USA ... York City Office in Yonkers, New York ... (TWO 2 ) homecare therapy. This new East Coast location has ... under the company,s DMEPOS accreditation for Home/Durable Medical Equipment Services. ... Advanced Oxygen Therapy Inc. New ...
(Date:8/11/2017)... 11, 2017 DarioHealth Corp. (NASDAQ: DRIO), a ... big data solutions, today announced that it will release ... and host a conference call at 9:00am ET. The ... financial results and its strategy and outlook for the ... Erez Raphael , Chief Executive Officer, and ...
(Date:8/8/2017)... Aug. 8, 2017  BioLineRx Ltd. (NASDAQ/TASE: BLRX), a ... reports its financial results for the second quarter ended ... the second quarter 2017 and to date: ... development programs for the Company,s lead project, BL-8040: ... study with BL-8040 as novel stem cell mobilization treatment ...
Breaking Medicine Technology:
(Date:8/23/2017)... (PRWEB) , ... August 23, 2017 , ... ... of the American Academy of Orthopaedic Surgeons , points out that therapeutic ... suffering from pain or injury. According to the report, a wider scope of ...
(Date:8/22/2017)... ... 22, 2017 , ... The old adage “you are what ... eating healthy foods. But this well-known piece of nutrition advice ignores that an ... carbohydrates—depends not only on properties of the food but also on properties of ...
(Date:8/22/2017)... del Rey, CA (PRWEB) , ... August 22, ... ... of revenue cycle management (RCM) solutions, announced recently the availability of a new ... HIM community in appreciation for their service to the healthcare industry. E/M coding ...
(Date:8/22/2017)... ... ... “Wilderness Voices”: a collection of poetry inspired by life on a Kentucky ... published author, Martha McKown, an ordained United Methodist minister with graduate degrees in Religious ... her older sisters studied High School literature. She loved the early English folk ...
(Date:8/22/2017)... ... August 22, 2017 , ... ... is the Founder and Managing Member for t4 Leadership Development & Consulting. He ... to his definition of “success”: physician leadership development, servant leadership, data driven process ...
Breaking Medicine News(10 mins):