A magazine ad for the testosterone drug AndroGel shows a discount card that allows consumers to pay "as little as $10 per month" for the medicine. Drugmaker GlaxoSmithKline announces in another magazine that it offers discount coupons for the popular inhaler Advair. And a TV commercial for Nexium notes that if consumers can't afford the heartburn drug, its manufacturer, AstraZeneca, "may be able to help."
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.
"An individual patient who receives a coupon might not realize that, although that particular prescription may cost less that month, overall what it does is to raise costs for everyone, including themselves," said Susan Pisano, a spokeswoman for the industry trade group America's Health Insurance Plans.
For people using Medicare, Medicaid, veterans benefits or any other federal health insurance program, using a coupon or a discount card to buy prescription medication works against efforts to keep federal spending down and may also be counter to federal law, according to some experts' interpretation.
Prescription drug coupons represent the latest battle in a war between health insurers and the pharmaceutical industry.
Insurers set high co-pays for brand-name drugs to steer their members to less-expensive generics. In response, companies such as Merck, AstraZeneca, Pfizer and many others issue coupons or discount cards that cover that co-pay.
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.
The coupons are "designed to get patients to bang down their doctor's door and say, 'Give me the most expensive drug,' " said Mark Merritt, president of the Pharmaceutical Care Management Association.
Merritt said that, since insurers ultimately end up footing the bill for the more expensive brand-name drug, they may respond by increasing premiums on everyone.
Drugmakers argue the coupons save money by preventing health problems that occur when patients cannot afford prescribed medications.
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The coupon war is now being fought in state legislatures and in court. Earlier this year, several union health plans filed a class-action lawsuit asking a judge to find the use of coupons illegal.
The cost issue surrounding coupons is made even more complicated when the federal government is the insurer.
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.
Even officials within the pharmaceutical and insurance industries said coupons should not be used by beneficiaries of government health programs.
But according to Donald White, a spokesman for the Department of Health and Human Services, no court or administrative body has ever ruled that coupons are illegal. HHS has never prosecuted anyone for issuing or using coupons in the federal health programs.