Drug coupons, patient assistance programs: How they work

Filed Under: Costs, Health plans, Patients

Photo Credit: "Spilled pills_1", © 2010 Ano Lobb, Flickr | CC-BY | via Wylio
Photo Credit: “Spilled pills_1”, © 2010 Ano Lobb, Flickr | CC-BY | via Wylio

Summary: Drug coupon programs and patient assistance programs are frequently cited by big drug companies as a good way for patients to escape the skyrocketing out-of-pocket costs of medications. But are these programs universally good, or are they cleverly disguised marketing, sales and public relations programs that cost the companies little compared to what they reap?

 


First, patient assistance programs. Michael Hiltzik writes in The Los Angeles Times: “Pharmaceutical companies are taking a lot of reflected heat in the uproar over the 5,000% price hike for a drug needed by AIDS patients. But so far, the industry’s method of making sure that low-income patients get access to high-priced drugs has avoided the spotlight. That’s too bad because it deserves a lot of scrutiny. We’re talking about ‘patient-assistance programs,’ through which drugmakers cover patient co-pays or other costs for their expensive medicines. These programs, which are estimated to cover some 300 drugs and cost the industry $4 billion a year — firm figures are carefully guarded by the industry — are detested by insurers, healthcare economists and government agencies. That’s because they’re often marketing schemes dressed up to look like altruism.  These programs are ‘a triple boon for manufacturers,’ David Howard of Emory University wrote last year. ‘They increase demand, allow companies to charge higher prices, and provide public-relations benefits.’ The manufacturers’ costs look high in absolute terms, but the payoff is even greater. ‘Manufacturers can afford to pay a lot of $25 of $50 co-payments in return for even a small increase in sales of a $50,000 drug,’ Howard observed.”

It’s an opinion piece. He concludes, “Drug companies shouldn’t be permitted to hide their fattening profits behind the shroud of philanthropy.”

Michael Hiltzik, Why Big Pharma’s patient-assistance programs are a sham, LA Times.

Related: We’ve cited this paper before. Prescription drug coupon programs are also not a free lunch, as Joseph S. Ross, M.D., and Aaron S. Kesselheim, M.D., J.D., M.P.H., write in this paper in the New England Journal of Medicine in September 2013:

After questioning the larger societal benefit, exploring whether lower-cost or generic substitutes are available in such cases, and discussing the legality of drug coupons (are they similar to kickbacks? the courts are deciding), the authors conclude:

“It has famously been said that ‘there is no such thing as a free lunch.’ Drug coupons are no exception to this rule. Everyone likes to save money, and coupons for essential therapies may be helpful for certain patients, particularly those with life-threatening conditions for which there are not reasonable generic substitutes. However, the majority of drug coupons are for therapies for which lower-cost and potentially equally effective alternatives exist. Physicians need to talk to their commercially insured patients about the implications of drug-coupon use and make sure that their inclination to reduce short-term out-of-pocket spending doesn’t come at the cost of higher long-term expenses for themselves and society.” The original paper in the New England Journal of Medicine is here.

Also, drug discount cards have a much more complicated story than what many understand. Here’s a guest post about that.