Danger for co-pay coupons: Medicare patients are using you

Forget the legal challenge to co-pay coupons filed by a group of health plans earlier this year. Forget the state of Massachusetts' coupon ban (it's been repealed now, anyway). The real threat to co-pay coupons may not be lawsuits from payers or outrage from insurance associations and pharmacy benefits managers.

So what is? Try who. It's the Medicare beneficiary nearest you. Though drugmakers forbid Medicare patients from using their co-pay coupons--and not just in the fine print--Part D beneficiaries are, indeed, taking those co-pay discounts. A full 6% of them, according to a survey of 1,000 seniors enrolled in Part D, commissioned by the National Coalition on Health Care and cited in a joint Kaiser Health News/Washington Post analysis.

PhRMA says it's not in favor. "The use of co-pay coupons is prohibited in the Medicare Part D program and pharmacies," VP Matthew Bennett told the Kaiser/Post writer. "[C]oupon-processing vendors have safeguards in place to prevent unauthorized use."

But an HHS spokesman said the agency has never prosecuted anyone for issuing or using coupons in federal health programs. Nor has any court or administrative body ruled that coupons are illegal, despite legal language banning inducements or rewards for use of products paid for by federal programs.

Why, then, wouldn't drugmakers want Medicare patients to use them? Well, it's one thing for private insurance premiums to rise because of spending on branded drugs that have plenty of generic competition. It's another for government programs to pay for costly branded meds, because of co-pay coupons, rather than lower-cost alternatives. A Congressional Budget Office report, cited by the Kaiser/Post story, found that Medicare pays $76 extra each time a senior chooses a brand over a generic. Generic Lipitor runs $18 a month for insurers and $137 a month for branded Lipitor.

As the Kaiser/Post article points out, co-pay coupons do save patients money. They may shore up sales of off-patent branded drugs. But they're no good for the payers that have to shell out the lion's share of a branded drug's cost. When those payers are funded by taxpayers, co-pays could be a congressional hearing waiting to happen.

- read the Post article