Navigation Links
Brand Drug 'Copay Coupons' Undermine Generics, Raise Health Costs by $447 Million in Connecticut
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 $447 million in Connecticut 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 Connecticut taxpayers an extra $63 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 Connecticut, taxpayers will pay an extra $63 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 $2.1 Billion in Florida
2. Report: Brand Drug Copay Coupons Raise Health Costs for Employers, Unions, and State Governments by $32 Billion
3. UBM Live to Roll Out Pharma Contract Services & Outsourcing Brand in the US in 2012
4. Popular Sleep Supplement Brand Settles Patent Infringement Suit Against Store Brand Manufacturer
5. Prasco Named Exclusive U.S. Distributor for Selected Aspen Branded Products
6. A New Constant Companion: BodyMedia® Enlists Americas Toughest Trainer, Jillian Michaels, as a Brand Partner
7. DreamBrands New Formula Helps Men Feel Younger and Stronger While Naturally Raising Low-T Without Prescription Drugs
8. Octapharma Launches Clinical Trial to Evaluate Efficacy & Safety of wilate® In Preventing Surgical Bleeding in Type 3 von Willebrand Disease Patients
9. Why the Brand Surgical Institute in L.A. is Fast Becoming the Authority on Weight Loss Surgery
10. U.S. Branding Group Ltd. to Sponsor DigiPharm Europe 2011, Showcase PharmaDrive™ USB Insert™ Paper Webkey
11. IMD Announces the Acquisition of the Kidshape® Brand
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/24/2016)... 24, 2016  Collagen Matrix, Inc., ("Collagen Matrix") ... manufacturing of collagen and mineral based medical devices ... Bill Messer has joined the company ... leverage the growing portfolio of oral surgery, neurosurgery, ... Bill joins the Collagen Matrix executive team as ...
(Date:6/24/2016)... 2016   Bay Area Lyme Foundation , ... Center for Tick Borne Illness , Harvard Medical ... Hacking Medicine, University of California, Berkeley, and the ... five finalists of Lyme Innovation , the ... 100 scientists, clinicians, researchers, entrepreneurs, and investors from ...
(Date:6/24/2016)... DUBLIN , June 24, 2016 ... addition of the "Structural Electronics 2015-2025: Applications, ... In-Mold Electronics, Smart ... Integrated Photovoltaics Structural electronics involves ... as load-bearing, protective structures, replacing dumb structures such ...
Breaking Medicine Technology:
(Date:6/25/2016)... ... June 25, 2016 , ... Experts from the American Institutes ... Research Meeting June 26-28, 2016, at the Hynes Convention Center in Boston. , ... advance care planning, healthcare costs and patient and family engagement. , AIR researchers ...
(Date:6/25/2016)... ... ... As a lifelong Southern Californian, Dr. Omkar Marathe earned his Bachelors in ... School of Medicine at UCLA. He trained in Internal Medicine at Scripps Green Hospital ... at the UCLA-Olive View-Cedars Sinai program where he had the opportunity to train in ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... Those who ... with these feelings, many turn to unhealthy avenues, such as drug or alcohol abuse, ... Marne, Michigan, has released tools for healthy coping following a traumatic event. , Trauma ...
(Date:6/24/2016)... ... June 24, 2016 , ... ... for accelerated orthodontic treatment. Dr. Cheng has extensive experience with all areas of ... AcceleDent, and accelerated osteogenic orthodontics. , Micro-osteoperforation is a revolutionary adjunct to ...
(Date:6/24/2016)... ... June 24, 2016 , ... The Haute Beauty Network, ... M. Weintraub as a prominent plastic surgeon and the network’s newest partner. ... the most handsome men, look naturally attractive. Plastic surgery should be invisible.” He ...
Breaking Medicine News(10 mins):