Co-pay cards come under fire

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Community Catalyst has declared war on prescription co-pay cards and coupons, saying the sales tools are nothing more than kickbacks and bribes.

The consumer advocacy group filed suit in four states seeking to ban coupons and co-pay cards, noting that they are banned in Medicare and Medicaid programs. The lawsuits are on behalf of the group's members, which include the AFSCME District Council 37 Health & Security Plan Trust and the Plumber and Pipefitters Local 572 Health and Welfare Fund. The suits cite Pfizer, Amgen, AstraZeneca, Bristol-Myers Squibb and Novartis, GlaxoSmithKline and Abbott Labs. Community Catalyst's staff attorney Wells Wilkinson told MM&M lawsuits were filed in cities that were close to the headquarters of the companies named in the suits.

Co-pay cards have been an industry presence for some time. The issue, Wilkinson said, is just how much they've grown and the distinct role they play in inducing patients to opt for name-brand prescriptions. The organization's press release about the lawsuit cites a November report for the Pharmaceutical Care Management Association which asserts these cards will increase costs by $32 billion over the next ten years. PCMA's report says the programs are so effective that pharma has a six-to-one return on its investment and that more than 50% of coupon users stayed with the name-brand drugs for almost a year after a generic version hit the market.
The release says these costs are increasing the financial burden for employers and their healthcare companies, and an IMS Health report for the New York Times showed coupons, discounts and co-pay cards tripled between mid 2006 and 2011.

Wilkinson told MM&M that although these discounts have been around for a while, the PCMA report “was the first kind of public cry of alarm” about the impact these programs have on consumer behavior, which, in turn, drives up costs for employers whose plans end up covering the costs of the higher-tiered drugs.

But cost may be a matter of perspective.

“It's not the cost of pharmaceuticals. It is the cost of bad outcomes that is driving healthcare costs,” Peter Frishauf, of the research group Crossix, told MM&M. Frishauf said that compliance is a significant, quantifiable benefit.

“Co-pay cards are a proven way to improve adherence and compliance and that is both a value to the pharmaceutical industry and a very effective way of lowering overall healthcare costs,” he added.

The study cites several hotspots if coupon use goes unabated for the next decade, seeing prescription costs jump by $2.6 billion in Texas, $2.3 billion in New York, and $2.5 billion in California. As comparative metric, the study says Medicare pays $76 each time a patient chooses a drug over its generic peer. Such discount programs are banned in Massachusetts.

Trade group PhRMA was not able to comment on the lawsuit, but said in a statement that the organization supports the discount programs. “They play a valuable role in increasing access to medicines and improving patient adherence to prescribed therapies, generating better health outcomes and reducing the use of avoidable and costly medical care,” said the statement.

Although outright bans on branded drugs could be a tactic for employer health plans, Community Catalyst's Wilkinson said such an approach would be extreme and detrimental.

“There could always be a few people who do not respond to one medication and should try another. So we don't want to prohibit the use of these drug products,” he said. Wilkinson then that the preference would be for “the decision to use the drug to be based on a medical decision by a doctor and not be promoted by the marketing that goes into these drug products . . and these are marketing tools to promote these very expensive drugs.”
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