Copayment Coupons…The good, The bad, and The ugly

Author: Danielle Clare, PharmD. Candidate 2014 from Virginia Commonwealth University

The affordability of healthcare and prescription drugs continues to be an issue for many Americans.  Research published on medication adherence cited one-third of patients reported difficulty paying for their medications and 22% of patients reported “trying to save money” as a reason for nonadherence.¹ Nonadherence accounts for up to $300 billion a year in additional U.S. health care spending by leading to increased hospital admissions, and worse health outcomes.² Manufacturers of pharmaceuticals have employed copayment (copay) coupons as a strategy to help patients afford prescriptions and increase adherence. In 2010, drug manufactures subsidized copayments for approximately 11-13% of all brand prescriptions dispensed.³

The Good:  Patients can use copay coupons to help reduce out-of-pocket costs for medications.  Cost reduction ideally helps to eliminate the financial barrier that prevents access and adherence to these expensive brand-name medications.  The coupons can be obtained from physician office visits and pharmacies, distributed directly to patients, or accessed via manufacturer websites. 

The Bad:  A report from the Congressional Budget Office found that Medicare pays an additional $76 every time a senior chooses a brand drug over a generic drug, leading to increased healthcare costs and wasted tax dollars when safe and effective generic alternatives are available. ⁴ Insurers use tiered copay structures to incentivize patients to choose more cost-effective options.  Coupons bypass cost-sharing incentives, leaving the payer with increased utilization of higher cost brand medications. 

Of note, federal law prohibits copay coupon use by Medicare and Medicaid insured patients.  Manipulation of the “true out of pocket costs” by pushing a Medicare beneficiary through the coverage gap or keeping them in the coverage gap is considered fraud.⁵ Fraudulent activities, including circumventing Medicare insurance and using a cash price for a beneficiary, may be picked up by plan sponsors or Centers for Medicaid and Medicare Services during an audit and could result in recoupments of reimbursement and fines to the pharmacy. ⁵

The Ugly:  Copayment coupon cards can only be used for a limited time. Patient outcomes post-coupon expiration have not been studied in the literature.  However, when copayment coupon coverage ends, patients may be faced with a predicament of prescription affordability which may lead to nonadherence, gaps in care, and/or the need to switch to a different, more affordable medication.

Some pharmacy benefit managers (PBM’s) and insurers have taken action against drug manufactures with formal policy changes within their companies.  CVS Caremark, Express Scripts, and as of July 1^st, United Healthcare reject prescription claims that used copayment coupons.  Patients using mail order may also be unable to use drug coupons, as they are not always accepted.  

A patient-centered, team-based approach to healthcare should be mindful of several factors when choosing drug therapy in addition to price, including safety, tolerability, effectiveness, and simplicity. The use of copay coupons may be appropriate in certain situations to help patients find appropriate resources so they can afford necessary prescription drugs.  Relying on copayment coupons should not be the primary message delivered to patients. However, if safe and effective generic options exist, the choice of a cheaper drug may be the best choice for patients and insurers alike in keeping down the overall costs of healthcare and maintaining consistent, affordable access to medications, long term.   For those who cannot afford the cost of prescription drugs, patient assistance programs may help cover the cost for those who qualify for such programs.

References:

1.      Langer Research Associates of New York, NY. Medication Adherence in America:  A National Report Card. June 2013. National Community Pharmacists Association.   http://www.ncpanet.org/pdf/reportcard/AdherenceReportCard_Full.pdf

2.      PhRMA.  Improving prescription adherence is key to better health care:  Taking medicines as prescribed can lower costs and improve health outcomes.  January 2011.  http://www.phrma.org/sites/default/files/pdf/PhRMA_Improving%20Medication%20Adherence_Issue%20Brief.pdf 

3.      Cahn, L.  How to Combat Pharma’s Costly Coupon Programs.  Managed care, 2012.  Managed Care Magazine Online website.  http://www.managedcaremag.com/archives/1205/1205.coupons/html.

4.      Schultz, D.  Drug Coupons:  A good deal for the patient, but not the insurer.  Kaiser Health News, 2012.  Kaiser Health News website.  http://www.kaiserhealthnews.org/Stories/2012/October/02/drug-coupons.aspx?p=1