It happens in doctors’ offices across the country. Physicians hand out coupons for new prescriptions to offset their patients’ insurance copays.
“Every time [my teens] go to a dermatologist, they give us another manufacturer coupon,” says Curtis Tingle, chief marketing officer for Valassis. Also known as copay cards, these coupons often eliminate the out-of-pocket cost for filling a prescription.
While getting a free prescription at the pharmacy may seem like a good thing, some argue these cards and coupons may ultimately push up health care costs for everyone.
[Read: 7 Medicare Part D Costs to Prepare For.]
Two types of savings. When it comes to filling prescriptions, there are two ways people can save money on brand name drugs. The first are coupons or copay cards that come directly from a manufacturer. Manufacturer coupons are most commonly given to health care providers to distribute directly to patients. Valassis also distributes coupons digitally, through direct mail and in newspaper inserts.
The second method of prescription drug savings involves third party cards offered by companies such as GoodRx, RefillWise and LowestMed. These cards have negotiated drug discounts, but to get them, consumers must be paying the cash price for the medication and cannot use both the card and their insurance coverage. “From a consumer perspective, it’s the same,” says Michael Levin, co-founder and CEO of health care data services company Vericred. With both a copay card and a third party discount card, consumers are reducing the cost of their medicine. However, Levin notes, “From a policy standpoint, they are very different.”
Coupons encourage the use of expensive medications. Critics of manufacturer coupons say the biggest problem is they encourage the use of newer, more expensive drugs. “If you look at the way those cards are structured, they can be very damaging,” says Keith Jacobs, president of RefillWise. Jacobs says the coupons eliminate the incentive for consumers to shop around for less expensive medicine or try a generic first.
Consumers may essentially be getting a free medicine at the pharmacy, but the insurer will be paying the bulk of the cost for that pricey drug. “The health plan is the one that takes the hit,” Jacobs says. Then, the cost of those expensive medications get passed on to all plan subscribers in the form of higher premiums.
Another potential problem with copay cards is that they are usually only for a limited number of refills. Some medicines for chronic conditions can’t be ended or switched immediately, which means patients could be left paying high copays until they can safely move to a less expensive drug.
[Read: 8 Ways to Get Help Paying (or Cutting) Medical Bills and Drug Costs.]
Health insurers have ways to control costs. Not everyone is convinced manufacturer coupons and copay cards are destined to increase insurance costs in the long-run. “It’s not like they are flooding the market,” says John Greenaway, engagement manager for life sciences consulting firm Trinity Partners. “They are setting it up so they are somewhat scarce.”
What’s more, health insurance companies have other ways to ensure they don’t get stuck paying for pricey medications they’d rather not cover. For instance, insurers can decline to cover a drug completely or put prior authorizations in place to ensure patients try less expensive medications first. Greenaway also notes there is no financial incentive for physicians to hand out coupons or prescribe one medication over another.
The problem is a policy issue, not a consumer one. While there are disagreements about how manufacturer coupons affect the future of health care costs, this is a policy matter and not something that should deter consumers from using copay cards. “No one can hold it against the consumer for taking advantage of any opportunity to drive down costs,” Levin says.
Even Jacobs, who is critical of manufacturer coupons, regularly shares information about them with patients who contact RefillWise. “We are constantly talking about copay cards and assistance programs,” he says, adding that for those with limited financial means, these programs remain the absolute cheapest way for people to get some medications.
[Read: Medicare Enrollment Deadlines You Shouldn’t Miss.]
Going forward, prescription drug coupons may become less of an issue. Tingle notes that coupon usage for medications, including over-the-counter purchases, has dropped in recent years. “When we look at consumers and their health care choices, it has to do with convenience and accessibility,” Tingle says, rather than cost alone.
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Are Coupons for Prescription Drugs a Good Idea? originally appeared on usnews.com
