Copayment coupons undermine formularies

MANAGED CARE December 2011. ©MediMedia USA

Who doesn’t want to save a few bucks these days? Members are getting a deal when they use copayment coupons provided by drug manufacturers. But coupons issued by manufacturers, often to combat the generic wave of medications that will soon wash over the traditional pharma industry, could increase the costs to employers, unions, and other payers over the next 10 years by $32 billion, according to the Pharmaceutical Care Management Association, the trade group made up of pharmacy benefit managers.

Mark Merritt, CEO, says, “Copayment coupons are used to make members avoid switching from branded drugs to generic. It’s a way to get consumers to use more expensive versions of the same drug.”

The other problem is that coupon programs exist outside of the normal claim adjudication process. Typically, claims are adjudicated when a member fills the prescription. “Everyone knows what happens,” says Merritt. But manufacturers set up the coupon program like a “shadow claims system, so that the coupons are processed separately in a system where the payers can’t see when the coupons are being used. It makes it difficult to underwrite the policies.”

To combat these coupons, insurers can educate their members, vigorously promote the use of generics, and emphasize use of mail order pharmacy, especially for chronic conditions. “Mail order pharmacy manages claims service from tooth to tail and will not accept these types of coupons,” says Merritt.