Amgen, AbbVie 'ahead of the crowd' in fighting payers' latest assault on copay coupons

Drugmakers and insurers have long battled over copay coupons, but a new assault from payers is threatening sales. (Carol Pyles/OOingle.com/CC by 2.0)

Copay coupons save patients money and help drugmakers steer scripts toward newer products or older ones facing new rivals. But because pharma does the steering, often toward drugs that actually cost more, payers hate them.

That is the copay coupon triangle, and there it has stood for years. But now, more than 40% of scripts for specialty drugs are paid for with those coupons—and the coupon battle is getting hotter than ever, with payers cracking down anew and pharma finding creative ways to thwart them.

The payers' new weapon of choice is the "copay accumulator," which prevents patients from applying copay coupons to their deductibles—and that, in turn, makes the drugs covered by those coupons less attractive. They've already taken a bite out of sales for some key products, pharma executives said during first-quarter earnings calls.

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What are drugmakers doing in return? Some companies, such as Amgen and AbbVie, "appear to be ahead of the crowd" with one  solution, Bernstein analyst Ronny Gal recently reported. They're offering patients prepaid debit cards to cover a big chunk of patients' out-of-pocket, rather than copay coupons that have to be processed through pharmacies.

Meanwhile, drugmakers are trying to shape public perception against the accumulator strategy, Gal said. PhRMA, the drug industry trade group, argues accumulators leave patients out to dry and expose them to thousands of dollars in unexpected medical costs.

RELATED: Déjà vu? PhRMA rolls drug cost ads, insurers push back—this time on costly coupon rules

The insurance lobby AHIP, however, says copay coupon programs are the root of the problem, and that PhRMA is trying to distract from that issue.

In spotlighting coupons, the advent of accumulators could spark a broader, and helpful, discussion, Anna Kaltenboeck, program director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center, said in an interview. Copay accumulators are "a step in the right direction" because they will likely start to raise the issue of whether coupons are "good for the system as a whole," she said. 

Kaltenboeck said pharma uses copay coupons for both branded drugs that are facing generic competition, and in disease areas without generics, but with intense brand-against-brand competition.

It's no accident that new controversy is brewing now. Pharma's couponing has grown quickly over the past seven years, insulating patients from growing list prices and higher deductibles, according to a recent report from analytics company IQVIA. Partly in thanks to those coupons, out-of-pocket costs have been "fairly stable" at about $28 per prescription even as retail prices have leaped, the report found.

RELATED: Will PBMs turn copay coupons into an endangered species? 

In 2017, privately insured patients used coupons for 18% of all branded prescriptions and 42% of specialty prescriptions, which tend to be far more expensive; the coupons cut out-of-pocket for specialty drug patients by $261 on average in 2017, compared with $94 overall. 

Coupon use in hepatitis C, autoimmune diseases and multiple sclerosis last year topped 50%. By contrast, in 2011, patients used coupons on 12% of all branded drugs and just 29% of all specialty drugs.

Data provided by IQVIA Institute research director Michael Kleinrock show how widespread copay coupons are in certain drug classes. The data are based on IQVIA's sample of a formulary impact analyzer and they can vary, he said.

 
All Brands
ICS/LABA
DPP-4
NOAC
GLP-1
SGLT-2
Total Diabetes
Average Specialty
Average Traditional
TNFs
HIV
HCV
MS
2013
12%
11%
16%
22%
12%
57%
7%
29%
11%
57%
33%
43%
27%
2014
14%
11%
18%
25%
21%
60%
11%
33%
13%
58%
39%
52%
45%
2015
16%
15%
22%
29%
27%
63%
17%
37%
15%
60%
41%
48%
54%
2016
18%
22%
26%
33%
27%
58%
19%
41%
17%
62%
46%
54%
55%
2017
18%
25%
27%
34%
19%
51%
19%
42%
17%
59%
47%
53%
51%

As industry watchers know, couponing has been a contentious topic for many years between drugmakers and payers. 

Stephen Ubl, president of drug industry trade group PhRMA, said in a recent statement the coupon programs "provide a valuable source of assistance for many commercially insured patients who are facing rising out-of-pocket costs because of deteriorating insurance coverage for medicines."

RELATED: California deals pharma a double whammy with signing of copay coupon bill 

Of course, payers see things differently. Critics of the marketing strategy say coupons drive overall drug prices higher by steering patients toward costly branded meds over cheaper generics. A spokesperson for health insurance trade group AHIP said copay coupons "are a clever marketing scheme leveraged by Big Pharma to keep drug costs high for everyone." While coupons may prompt patients to choose brands over generics, insurers still "foot the bill for the entire treatment cost, which ultimately gets passed on to consumers and employers in the form of higher premiums," she said. 

Sloan-Kettering's Kaltenboeck said the programs leave some patients, such as those on Medicare, "really exposed," because pharma companies use them to keep patients on their drugs despite high prices. Medicare patients aren't eligible for copay coupon benefits under law, she pointed out.

Couponing "doesn't prioritize access," Kaltenboeck said, "it prioritizes price."