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Drug Coupons: A Double-Edged Sword in Need of Further Review

Drug Coupons: A Double-Edged Sword in Need of Further Review

June 7, 2016

Boston Globe editorial: Proceed with caution on drug copay discounts

At first glance, discounts on prescription drug copays via “coupons” seem like an enticing offer. Many patients struggle to afford their copays. Until 2012, Massachusetts banned drug coupons for fear that they would ultimately result in higher costs for the whole healthcare system. When the ban was lifted, the plan was to allow drug coupons temporarily, until 2015, and to conduct a study on the cost ramifications. 

What happened next is typical: the study never happened, and the sunset date was extended to 2017. And now, a rider was added in the House version of the 2017 state budget that would allow coupons indefinitely. The Senate version does not have the provision.

The issue is now before the House-Senate conference committee reconciling the budget versions. HCFA strongly opposes the provision removing the sunset clause, and urges the legislature to press the state to conduct the study in order to make an informed decision.

The Boston Globe’s lead editorial on Saturday supported our approach. The Globe wrote:

There are good reasons to proceed cautiously on drug discounts, starting with pharmaceutical companies’ motives for offering them. … [K]eeping the status quo in place allows patients to continue reaping short-term savings on prescription drugs while the long-term ramifications are sorted out.

The editorial cites a statement from the head of the state’s Biotechnology Council, who supports removing the sunset clause immediately, and skipping the study. Why are they so opposed to doing a study first? Perhaps, it’s because existing evidence indicates that drug coupons may not be a cost-effective as they seem.

Drug coupons are offered as a marketing tactic to increase sales of high-price drugs when there is a less expensive alternative. The cost of paying for these more expensive, brand name drugs eventually gets passed on to us, though higher premiums. And then insurers respond by barring certain drugs from coverage. For example, according to a recent STAT article, Express Scripts excluded 80 medications from coverage in 2016 due to cost, 67% more than in 2014. And guess what - 90% of these excluded medications had drug coupons available for them. All the while, drug coupon offers have been on the rise continuously – from 86 in 2009 to almost 750 today.

Like most sales, drug coupons are often temporary. When the sale ends, consumers are then hit with copays full force. By this time, patients are often attached to the medication, unaware of cheaper, equally effective options. Drug companies also extract personal information from consumers in exchange for the coupon, giving them free rein to bombard them with further advertising. The end result is more and more high-cost drug consumption, fueling significant cost increases for payers – costs which will then be passed on to all patients.

Due to these concerns, it is critical that the Center for Health and Information Analysis do the study it was charged with conducting in 2012. If drug coupons are really having no negative impact on costs and health care system in general, the pharmaceutical industry should have nothing to fear. Clearly, companies want to sell as much of their most expensive products as possible. An individual patient may very well receive a good deal from an individual coupon. But the sword cuts both ways. The larger structural implications of drug coupon schemes must be assessed.

                                                                                                                             -- Mike DiBello