Can copay coupons be kickbacks? HHS says yes

A big no-no in the copay coupon world is Medicare. It's illegal to promote money-off coupons to Part D beneficiaries, because the government figures--rightly so--that the promos work to boost their brands over generics or other cheaper alternatives.

Just take a look at any coupon offer online and you'll see the warning: Offer doesn't apply to Medicare patients. But a new Inspector General's report points out that some 7% of seniors are using coupons to help cover their prescriptions. That's something like 2 million Medicare recipients. Not a trivial number.

So, the Health and Human Services Office of the Inspector General dug into coupon offers, and concluded that the fine print isn't enough to safeguard against Medicare recipients' coupon use. Drugmakers have to do more, the OIG report says. If not, then they may well be violating anti-kickback laws.

The OIG makes its case for linking copay coupons with increased use of brand-name drugs. We've all been there; private insurers have been fighting pharma's coupon offers for the very same reasons. Kicking some brands off their formularies because of them, in fact. But the government has the law behind it, and HHS wouldn't mind using kickback statutes to crack down on the coupons. In fact, the OIG put out a special advisory warning drugmakers of that very thing.

So what's a compliant pharma company to do? Be more diligent about keeping Part D beneficiaries off their coupon lists, for one thing. For another, make it obvious, claims data-wise, when coupons enter the mix; that would help Part D plans bar the coupons themselves. Doing that will require some cooperation among companies, pharmacies, the Centers for Medicare and Medicaid Services, and others, the OIG allows.

Make no mistake, though; the OIG means business. It's the companies offering the coupon deals that bear the ultimate responsibility for keeping them out of seniors' hands. And drugmakers "may be subject to sanctions" if they don't do their best to do so.

- read the OIG report (PDF)

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