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Times Ponders Drug Coupon Issue

Times Ponders Drug Coupon Issue

January 25, 2011

Mass Prescription Drug Reform CoalitionIf given a choice between a name-brand drug and its generic equivalent, which drug would you prefer to take?

If you spent more than two seconds contemplating the answer to this question, then drug companies know you better than you know yourself. Price is the only reason patients choose the drab generics over the name-brands they’ve seen in ubiquitous advertisements. Co-pays for name-brands are often much higher than for generics, forcing patients to go with the generics. To even out the prices, drug companies offer coupons that cover most of a name-brand drug’s co-pay.

A recent New York Times article grapples with the heated dispute over co-pay coupons. The argument in favor of the coupons seems, at first glance, to be very persuasive. Drug companies insist that all patients should have equal access to all drugs. Patients maintain that lower co-pays make it more possible for them to get the medical care they need. And after all: if drug companies are willing to pay the difference in cost between their drug and the generic, then why not let them?

The answer is simple: they’re not. Sure, the coupons cover the co-pay, but this co-pay covers only a fraction of the cost of the medication. For example, the co-pay for Novartis’s multiple sclerosis pill Gilenya covers only 20% of a total cost that is between eight and eighteen thousand dollars higher than that of rival pills. The insurance companies pay the difference, and the difference is substantial. One union health insurer in New York paid over $17 million extra when patients began choosing prescription statins. The insurance companies, of course, are funded by the patients’ monthly insurance payments. If the insurance company starts paying for the pricey name-brand prescriptions, then the payments patients make each month go up.

This is why an embattled Massachusetts law currently blocks drug companies from offering co-pay coupons. The New York Times article fails to emphasize that increased health care costs means that patients ultimately pay the price for switching to the expensive name-brand drugs. The Massachusetts law banning co-pay coupons protects patients from a deceptive marketing ploy that will skyrocket insurance rates without providing any medical benefits. We thank our legislature for recognizing the importance of the coupon law and maintaining our ban.
-Karen Marcus