More prescription coupons, discounts driving up costs, expert argues

Co-pay coupons and discounts offered to consumers ultimately will lead to higher costs across society as they increasingly drive up premiums, according to one leading expert on prescription drugs.

The spending on coupons by drug companies has increased dramatically in recent years, from $1 billion in 2010 to an estimated $7 billion last year.

This has led to a standoff between the drug companies and insurers, with the former claiming they are just helping struggling consumers, and the latter arguing they are left picking up the tab for consumers driven, unnecessarily so, toward more expensive drugs.

“These coupons are undermining payers’ attempts to foster rational prescribing,” Adriane Fugh-Berman, an associate professor of pharmacology and physiology at Georgetown University, told American Pharmacy News

Fugh-Berman is a vocal opponent of the increasingly widespread use of coupons and other discounts.

“It does not encourage consumers to make the choice of another generic drug, or other alternatives,” Fugh-Berman. “Taxpayers ultimately pay as it drives up prices of premiums.”

Studies have shown that co-pay coupons can be beneficial, and hugely attractive, to those  needing specialty medications, while others reveal the majority of the drugs are brand names where cheaper alternatives are available.

Bloomberg Businessweek, in a recent article, cited a 2013 analysis in the New England Journal of Medicine that  found that 62 percent of coupons studied were for brand-name drugs for which lower-cost alternatives were available.

In some cases, drug companies write off the entire co-pay, meaning customers are left looking at an attractive bottom line.

But this is costing the system, while pretending to do something good, Fugh-Berman argues.

Consumers generally only care about the amount they pay immediately, but they need to be concerned about the overall costs of paying for drugs, not just themselves, Fugh-Berman said.

Insurance companies and their pharmacy benefit managers are increasingly dropping drugs from plans as a way of combating the increasing use of co-pay coupons.

But the pharmaceutical industry argues coupons are simply the drug companies' way to help the patient as they are being asked to pay more and more extra upfront costs.

Insurance companies have many ways of steering people into using particular drugs, prior approval, mandate and limits on the number of pills dispensed, the industry has argued.

Jenny Bryant, of the Pharmaceutical Research and Manufacturers of America, an industry trade group, argued in an interview with ProPublica that it has gone past the point “where there’s a question about whether these kinds of programs are necessary.

“The reality is that (insurance) benefits are not as generous as they were and many patients are struggling,” Bryant said