Navigation Links
Brand Drug 'Copay Coupons' Undermine Generics, Raise Health Costs by $308 Million in Arkansas
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 $308 million in Arkansas 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 Arkansas taxpayers an extra $53 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 Arkansas, taxpayers will pay an extra $53 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. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $447 Million in Connecticut
2. Brand Drug Copay Coupons Undermine Generics, Raise Health Costs by $2.1 Billion in Florida
3. Report: Brand Drug Copay Coupons Raise Health Costs for Employers, Unions, and State Governments by $32 Billion
4. UBM Live to Roll Out Pharma Contract Services & Outsourcing Brand in the US in 2012
5. Popular Sleep Supplement Brand Settles Patent Infringement Suit Against Store Brand Manufacturer
6. Prasco Named Exclusive U.S. Distributor for Selected Aspen Branded Products
7. A New Constant Companion: BodyMedia® Enlists Americas Toughest Trainer, Jillian Michaels, as a Brand Partner
8. DreamBrands New Formula Helps Men Feel Younger and Stronger While Naturally Raising Low-T Without Prescription Drugs
9. Octapharma Launches Clinical Trial to Evaluate Efficacy & Safety of wilate® In Preventing Surgical Bleeding in Type 3 von Willebrand Disease Patients
10. Why the Brand Surgical Institute in L.A. is Fast Becoming the Authority on Weight Loss Surgery
11. U.S. Branding Group Ltd. to Sponsor DigiPharm Europe 2011, Showcase PharmaDrive™ USB Insert™ Paper Webkey
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/8/2017)... , June 8, 2017  Less than a month ... more than 200,000 companies, including hospital networks, in over ... as one of the largest online extortion attempts ever ... healthcare market, it is imperative that providers understand where ... data from this — and many other very real ...
(Date:6/7/2017)... Md. , June 7, 2017  Novavax, Inc., (Nasdaq: ... second of two Phase 2 trials of its RSV F ... of child bearing age have been published in the journal ... publication have been shared in prior scientific conferences). The Company ... in April 2014. Novavax is developing the RSV F Vaccine ...
(Date:6/3/2017)... June 3, 2017  Eli Lilly and Company ... results from the Phase 3 MONARCH 2 study ... 6 inhibitor, in combination with fulvestrant, significantly improved ... alone in women with hormone-receptor-positive (HR+), human epidermal ... who have relapsed or progressed after endocrine therapy ...
Breaking Medicine Technology:
(Date:6/28/2017)... ... June 28, 2017 , ... Continually at the forefront of ... Drops™ have received the Non-GMO Project Verified seal. All five flavors of the ... only third-party verification for non-GMO foods and products in North America. , Available ...
(Date:6/28/2017)... VA (PRWEB) , ... June 28, 2017 , ... Guide ...      , No matter on which side of the Atlantic devicemakers do ... device regulations they have to follow. , In addition to the full text of ...
(Date:6/28/2017)... ... , ... Anyone with a remote control has seen the never-ending twists on the house flipping ... get rich in no time. But what about the buyers of the flipper's flip. ... of a flipped house. An email recently sent to Gary Case said, “Just closed ...
(Date:6/28/2017)... ... ... David B. Sosin, a founding partner at the law firm Sosin, Arnold & ... for the Illinois State Bar Association , in accordance with the organization’s rules of ... following a state-wide election and served in that capacity for the past year prior to ...
(Date:6/28/2017)... ... , ... American Farmer proudly announces the participation of Pure Line Seeds, Inc ... to broadcast fourth quarter 2017. American Farmer airs Tuesdays at 8:30aET on RFD-TV. , ... seed. As demand grew, the small company located in Moscow, Idaho extended its sales ...
Breaking Medicine News(10 mins):