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:6/26/2016)...  VMS Rehab Systems, Inc. ( www.vmsrehabsystemsinc.com ) reported ... required to build a strong and stable market for ... on the OTC Markets-pink current trading platform. ... are seeing an anomaly in market trading activities that ... the Company, but shareholders and market players as well. ...
(Date:6/24/2016)... , June 24, 2016  Global Blood ... biopharmaceutical company developing novel therapeutics for the treatment ... today announced the closing of its previously announced ... stock, at the public offering price of $18.75 ... offering were offered by GBT. GBT estimates net ...
(Date:6/24/2016)... , June 24, 2016 The Academy of ... recommendations that would allow biopharmaceutical companies to ... entities that make formulary and coverage decisions, a move ... of new medicines. The recommendations address restrictions ... appear on the drug label, a prohibition that hinders ...
Breaking Medicine Technology:
(Date:6/24/2016)... CA (PRWEB) , ... June 24, 2016 , ... ... is now offering micro-osteoperforation for accelerated orthodontic treatment. Dr. Cheng has extensive experience ... Damon brackets , AcceleDent, and accelerated osteogenic orthodontics. , Micro-osteoperforation is ...
(Date:6/24/2016)... , ... June 24, 2016 , ... Topical BioMedics, Inc, makers of Topricin and MyPainAway ... call for a minimum wage raise to $12 an hour by 2020 and then adjusting ... restore the lost value of the minimum wage, assure the wage floor does not erode ...
(Date:6/24/2016)... ... 2016 , ... EB Medicine presented its first-ever “Issue of ... in Ponte Vedra Beach, FL. The awards honor the outstanding work of leading ... and Pediatric Emergency Medicine Practice. , “With this award, we recognize the efforts ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... ... client, The Grove Investment Group (TGIG), has initiated cultivation and processing operations at ... Las Vegas and Pahrump, Nevada. , Puradigm is the manufacturer of a complete ...
(Date:6/24/2016)... ... ... National recruitment firm Slone Partners is pleased to announce the placement ... Vice President of North American Capital Sales at HTG Molecular . ... in the commercialization of the HTG EdgeSeq system and associated reagents in North America. ...
Breaking Medicine News(10 mins):