• Drug coupons

    Go read David Schultz’s piece on coupons offered by drug manufacturers. Here are a few key excerpts.

    In the past few years, coupons and discount cards have become nearly ubiquitous for prescription drugs. Such incentives are available for 395 medications, according to a recent report from industry consultant IMS Health. In a similar analysis in 2009, a marketing firm found that only 86 drugs came with coupons.

    Drugmakers say the coupons help Americans get the medicine they need. But the insurance industry is concerned that they drive patients toward more expensive brand-name drugs, leaving insurers to cover the full cost, which then gets passed on to consumers in the form of higher premiums. […]

    A recent article in the Journal of the American Medical Association outlined the dramatic effect coupons can have on prices paid by consumers. Using cholesterol-lowering drugs as an example, researchers found that the popular statin Lipitor comes with an average co-pay of $30 a month, compared with a $10-a-month co-pay for simvastatin, a generic drug also used to treat high cholesterol. But with a coupon from Pfizer, the drug’s manufacturer, the co-pay for Lipitor goes down to $4 a month, making it less expensive for the consumer than simvastatin.

    It’s a great deal for the patient, but not the insurer. According to the JAMA article, the insurer pays $18 a month for simvastatin and $137 a month for Lipitor. […]

    Drugmakers argue the coupons save money by preventing health problems that occur when patients cannot afford prescribed medications. A 2008 study in JAMA found that 20 percent of Medicare beneficiaries in fair to poor health did not take their medicine as directed because of cost concerns. […]

    According to federal statutes, it is a crime to provide “any remuneration to induce or reward referrals reimbursable by a federal health care program.” Some experts say coupons constitute such remuneration because they encourage consumers to purchase a more expensive product, with the extra cost ultimately falling on taxpayers. A 2010 report from the Congressional Budget Office found that Medicare pays an additional $76 every time a senior chooses a brand-name drug over a generic.

    @afrakt

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    • There was a time in the late 80s, early 90s when at least a few hospitals offered to waive deductibles and a out-of-network penalties for patients with non-contracting insurances. I recall it with OB and elective out-patient surgery. Insurances reacted to that — again, at least in some instances — by denying payment on the grounds that the transaction constituted a violation by the patient of the terms of insurance. I’m also aware of insurances that responded to what they saw as hospital encouraged out-of-network abuses by paying claims directly to the patient and giving the hospital the burden of collecting. It is naive to think that patients don’t understand what they are doing, I suspect, with these coupons.

    • Yeah, but its also true that, for most patients, atorvastatin will result in greater LDL reduction, with fewer cases of rhabdomyolysis than simvastatin. Pfizer paid a lot of money running the clinical trials that demonstrate this. One can question the legitimacy of clinical trials sponsored by drug companies, but I think that by and large they are run honestly.

      Yes, generics are cheaper. And if simvastatin works for you, go for it. But these drugs are not really interchangeable, and frankly don’t really contribute that high a percentage of total health care costs.

      And atorvastatin is, or will soon be, generic in most markets, so the whole issue goes away.

    • We know all this, but in 2012 Massachusetts became the 50th state to legalize drug coupons, after industry lobbying pressure.

    • The thing I’ve never quite understood in these cases (and Planet Money did a great piece on drug discount coupons more than a year ago) is why the insurance is set up to pay full price for Lipitor. I can envision a fixed-price scenario where insurance pays $18 per month for cholesterol lowering drugs. For example: If you want to get simvastatin you’ll pay $10 out of pocket. If you want to get Lipitor you’ll pay $147 out of pocket. This removes any consumer incentive from a $26 coupon.

      Now I agree this basically makes is (almost) impossible for the average consumer to get Lipitor. I’m not sure if that’s a problem or not, but if we want consumers to respond to price differences the full price differential would be much more effective than $20 differential.

      Here’s a link to the Planet Money story: http://www.npr.org/blogs/money/2009/09/podcast_clipping_coupons_for_h.html

    • I have been using drug coupons and discount drug cards for years. I have no prescription drug coverage so I use the discount drug card for my prescription meds and then I use drug coupons for the OTC stuff like cough and cold medicines. Although there are a few different websites that offer these, I choose to use Medicationcoupons.com.
      The card and coupons have really made a difference in my life, I am not sure how I would be able to afford the prescriptions if i didn’t have the discount card-