Do Drug Copay Coupons Drive Up Healthcare Costs? Union Health Plans Say “Yes”

Lipitor Copay Card“Coupons for drug co-payments are illegal and drive up long-term health-care costs for all, a consumer group and four trade-union health-insurance plans said recently in announcing lawsuits against eight pharmaceutical companies,” reported the Philadelphia Inquirer (see “Trade union health plans sue 8 pharma companies over drug coupons“).

The eight drug companies being sued are:

  1. Abbott Laboratories
  2. Amgen
  3. AstraZeneca
  4. Bristol-Myers Squibb 
  5. GlaxoSmithKline
  6. Merck & Co.
  7. Novartis
  8. Pfizer

The lawsuits claim that although coupons reduce the consumer’s out-of-pocket cost, the health insurer still pays the previously negotiated price to the drug company. “With no savings from generics, health plans will need to charge patients more to keep up with rising costs, the lawsuits say.”

That was precisely my criticism of Pfizer’s attempt to compete with generic versions of Lipitor by offering consumers coupons that lowered the co-pay to $4:

“Most patients taking Lipitor won’t even know what’s going on except that their out-of-pocket co-pay will be decreased,” I said. “But as more patients pay a portion of their employer-sponsored healthcare coverage, they should be concerned that employers may pass along the added expense (to them) to their employees. And even though the Pfizer-PBM deal will end in six months and Lipitor co-pays will rise back up, it would still hurt employers who will remember the shakedown when they adjust their employee benefit plans!” (see “Occupy Pfizer! Protest It’s Deal to Block Sales of Generic Lipitor! #OccupyPFE“).

In a comment submitted to the Inquirer, Wells Wilkinson, JD., Director, Prescription Access Litigation Project, said:

“If a drug is a patient’s only option, and it has no real alternative, then we applaud when companies like Pfizer help patient in need afford their medications.

“But copay coupons are not aimed at patients in need, they are marketing tools that target people with insurance. Distributed for drug companies by doctors and pharmacists alike, they can be coupled with tv ads that promote an expensive drug. For instance, Lipitor is competing with other statins that cost one-fifth to one tenth as much. In fact some statins (like lovastatin, pravastatin) are so inexpensive you can get them for $4 without any insurance at all. Does it help the consumer in the long run to trick them into using a coupon, and passing on $120 in costs to their health plan, when they could buy a low-cost statin that is just as effective for $4 with no cost to their employer or health plan?

“Consumers need to see that there are real costs to using coupons — costs that drive up their premiums and their employers costs for health care. Forgoing copay coupons and using lower cost drug also helps save funds that they may need later, or that their coworkers need for the really expensive drugs with no alternatives.

As more and more drugs lose their patent protection and become available at competitive prices, consumers should use these first, and take advantage of market competition to keep our health care costs down.”

It should be noted that federal Medicare and Medicaid programs prohibit the use of coupons because they can hurt the programs, which have to pay for higher-cost drugs that the coupons promote.

Pfizer had nothing to say except “While many health plans have raised their co-pays and/or are encouraging switching to generic medications to achieve cost-savings, these treatments may not be appropriate for all patients.”

The drug industry continues to claim that generics are “different” than brand name drugs and therefore “may not be appropriate for all patients.” It’s also an argument the industry makes against “biosimilars” or follow-on biologics.

Issue: Vol. 11, No. 3
Publication date: 19 March 2012
Word Count: 1,776

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