Managed Care spotted the danger posed to health plans by drug coupons almost immediately (http://www.managedcaremag.com/content/copayment-coupons-undermine-formularies), but insurers are not the only ones who should be concerned, according to an opinion piece in the August 28 edition of the New England Journal of Medicine.
The coupons encourage consumers to use more expensive brand-name drugs by making the effective copayments equal to copayments for generics. They are an assault on formularies, and on the bottom lines of health insurers and pharmacy benefit managers. They are not such a good deal for patients, either, in the view of Joseph S. Ross, MD, and Aaron S. Kesselheim, MD, JD, MPH, authors of the NEJM article (http://www.nejm.org/doi/full/10.1056/NEJMp1301993?query=TOC) aptly titled “Prescription-Drug Coupons — No Such Thing as a Free Lunch.”
“Some coupons can be used once, and others more than once,” they write. “But we found few that offered savings for more than a year. Once a coupon program ends, patients with chronic diseases face copayments for these brand-name medications that are higher than those for generic alternatives. By that point, however, patients may have developed loyalty to the particular brand or may be skeptical about switching away from a medication that they perceive as effective — or they may not even be aware of alternative therapies.” Physicians have not really helped either because of “clinical inertia” or simply not knowing the cost implications of coupons.
Ross and Kesselheim look at coupons advertised in March on the Web site www.internetdrugcoupons.com, finding 374 brand-name drugs for a wide range of conditions. They report that “62% of coupons … were for brand-name medications for which lower-cost therapeutic alternatives were available.”
The larger implications are, “The more that patients use drug coupons to obtain brand-name medications when lower-cost alternatives are available, the more expenses will rise for their insurers. A predictable response from the insurers would be to raise coverage rates for all patients.”
Actually, insurers have other options, as we reported last year (http://www.managedcaremag.com/archives/1205/1205.coupons.html), though they’re not always easy to implement and may not be entirely effective.
Linda Cahn, a health care lawyer writing in Managed Care in May 2012, said that the “simplest approach is to uniformly change the copayments for each drug tier and thus create a greater differential between the copayments.”
Large health plans might want to consider creating two different covered-drug lists “or an open and closed formulary — and informing members that they will have to contribute a different premium depending on which list or formulary they choose....”
Drowning in a sea of coupons
Availability of lower-cost alternatives to brand-name drugs for which coupons are offered
Source: “Prescription-Drug Coupons — No Such Thing as a Free Lunch,” New England Journal of Medicine,” Aug. 28, 2013