It had to happen eventually: A pharmacy benefits manager is striking back at co-pay coupons. As The Wall Street Journal reports, CVS Caremark's PBM is recommending that customers stop covering 34 drugs, including GlaxoSmithKline's ($GSK) erectile dysfunction remedy Levitra and Eli Lilly's ($LLY) insulin drugs Humalin and Humalog. The reason? Saving money, of course; some drugmakers wouldn't meet CVS Caremark's rebate demands, while others have offered co-pay assistance that undermines its efforts to steer patients toward generics.
Co-pay coupons and discount cards have attracted a lot of attention lately, with Pfizer ($PFE) unveiling discounts designed to keep Lipitor patients from defecting to the first generic versions of the drug. AstraZeneca ($AZN), whose Crestor pill will have to compete with Lipitor generics, has also announced a co-pay program. The two programs join dozens of others that apply to everything from cancer drugs (Novartis' Gleevec, for one) to bone drugs (Amgen's Xgeva) to acne pills (Medicis' Solodyn).
About half of the 34 drugs CVS Caremark is downgrading have co-pay assistance attached, the WSJ says. Just last week, a PBM trade group issued a report saying that co-pay cards could cost employers, unions and state governments $32 billion over the next decade. "Meeting our client's objective of lowering total cost has been complicated in recent years by the proliferation of manufacturer coupon programs, which undermine member incentives to use lower-cost products," CVS Caremark told the WSJ.
Lilly told the WSJ that it rejected the big discounts CVS Caremark wanted on Humalin and Humalog, which together posted U.S. sales of $1.7 billion last year. "In light of the aggressive pricing required to win this business--and the fact that only a small percentage of Lilly's insulin franchise would be impacted by this change--we ultimately decided it did not make good business sense for Lilly to be included," the company said.