Pharma's co-pay discounts have their fans--patients, certainly, and companies that have been able to boost prescriptions for high-priced drugs or hang onto sales as brands go off patent. But co-pay coupons and discount cards also have their detractors--namely, insurers and other payers trying to steer patients toward cheaper alternatives.
One way payers save money is by imposing larger co-pays on more expensive drugs, whether they are brand-name meds with generic competitors or pricier alternatives to other branded treatments. When drugmakers step in to cover part or all of an insurer's co-pay, it removes the incentive to use cheaper meds. And while patients may end up paying less, health plans still have to foot their share of the more expensive alternative.
Now, a consumer group and its affiliated union health plans are taking their coupon complaints to court. Community Catalyst and associated health funds sued 8 drugmakers using co-pay discounts to market their products. The health plans claim that co-pay assistance will increase their prescription drug costs substantially. "[T]hese kickbacks will increase health benefit providers' prescription drug costs by $32 billion over the next 10 years," one of the suits claims (as quoted by Bloomberg).
The 8 drugmakers--Pfizer ($PFE), Merck ($MRK), GlaxoSmithKline ($GSK), Amgen ($AMGN), Novartis ($NVS), AstraZeneca ($AZN), Bristol-Myers Squibb ($BMY) and Abbott Laboratories ($ABT)--have offered co-pay assistance on some of their biggest drugs, the lawsuits say. Among them: Pfizer's pain drug Celebrex and its cholesterol drug Lipitor, which now faces generic rivals; Merck's Nasonex allergy spray and cholesterol fighter Vytorin; and AstraZeneca's cholesterol pill Crestor and stomach drug Nexium.