Can Pharmaceutical Companies Issue Coupons for Reduced Drug Co-Pays?
When a pharmaceutical company’s patent for a new drug expires, other companies are free to produce a generic version of the same drug. At this point, patients can choose whether to continue to take the original drug or switch to the generic version.
Hoping to keep as many patients as possible on the original version, which is usually more expensive, drug companies often issue coupons that patients can use toward co-payments at their pharmacy. A well-known example is the pharmaceutical company Pfizer, which has offered coupons for the cholesterol-reducing drug Lipitor. However, according to an article by David Sell of the Philadelphia Inquirer, health insurance companies are not told when a coupon is used, and thus pay the same price to the drug company as they would if no coupon was used.
This discourages people who could have switched to a generic from making the change – medically, not everyone may be able to do so – and insurers lose out on potential savings from generics. To make up the loss, insurers must pass the expense on to the consumer in the form of increases to premiums and other health plan costs. Medicare and Medicaid have already banned the use of coupons because in the long term, they make everyone’s health costs go up.
For these reasons, four health insurance plans and a community group say that co-payment coupons for brand-name drugs are illegal, and have sued eight pharmaceutical companies for issuing them. The suit, filed in four federal courts, targets Abbott Laboratories, Amgen Inc., AstraZeneca PLC, Bristol-Myers Squibb Co., GlaxoSmithKline PLC, Merck and Co., Novartis AG, and Pfizer Inc.
Readers, have you ever used a coupon to save on brand-name medication at the pharmacy counter? Weighing the potential effects of those coupons on insurance companies and long-term premium rates against their potential savings for people who use them, do you think they are fair?