Is the drug participation coupon a form of charity or a bribe?

Before my insurer had even pre-approved coverage for the new injectable medication my doctor had prescribed, I received a voicemail from its manufacturer informing me that I might be eligible for its co- payment. This meant that the company would cover at least the lion’s share of my co-pay, leaving me with minimal, if any, out-of-pocket contribution.

My antennae were up: If a drugmaker offers co-payment assistance, you can assume the list price of the drug is high, but I didn’t realize how high. Was this outwardly kind offer, essentially, a kind of bribe?

This copayment coupon system is both common and lucrative for pharmaceutical companies that sell expensive drugs. Here’s how it works: Drugmakers, either directly or through nonprofit foundations, shell out money to subsidize patient co-payments as a form of what they seek to call charity. They often deduct from their income taxes the billions they pay.

But the federal government sees it differently. It generally views manufacturers’ co-pay coupons and co-pay assistance programs as illegal bribes, tricking patients into using and doctors into prescribing more expensive drugs when cheaper drugs could do it. This therefore severely limits the use of this assistance to patients covered by government insurers, a particular financial hardship for patients on Medicare.

Co-payment assistance is a profitable form of charity – and yes, it’s an oxymoron. By paying patients a copayment — often 10-20% of the drug price — manufacturers are more likely to sell expensive drugs and bill insurers for the remaining 80-90%. Insurers are forced to pay this tab, even if patients get help from drugmakers to pay their share.

Studies by marketing consultants and academics have shown such seemingly benevolent programs pay big dividends for drugmakers — conservatively, about $2 for every $1 donated to co-pay up to 4 to 1, according to one analysis. from Harvard Business School.

Pharmaceutical companies also benefit from increased patient loyalty, who feel grateful to be able to obtain their medicines; most patients won’t shout out (or even notice) the $10,000 monthly cost of a drug for multiple sclerosis or the $6,000 cost of a drug for arthritis and inflammatory diseases of the intestine. These drugs often cost much less in other developed countries.

In one study, 64% of co-pay coupons were for brand name drugs that offered cheaper and equally effective alternatives, even in the United States. rose from $376 million in 2001 to $6.1 billion in 2014, 4 accounting for 85% of all pharmaceutical donations and one-sixth of all charitable deductions by US corporations in 2014.”

The programs force patients who otherwise could never afford the drugs they need into a Faustian stalemate. Many drugs offered with copayment assistance have prices in excess of $50,000 per year, which means that even a 10% copayment would be unaffordable for many unassisted patients.

I called the number left on my voicemail to get an idea of ​​the cost of the drug and my out-of-pocket expenses if I chose to decline the drug manufacturer’s offer. The drug was a little over $1000 and under my insurance policy my co-pay was about $200 which was high but I decided to pay for it myself.

In a few years I might be on Medicare, when I couldn’t accept the offer anyway. Also, I am a health reporter, and standard newsroom ethics policy states that we cannot receive anything of value from any part of the industry. So, a week later, I threw away the letter from the co-pay program, which “welcomed” me and attached a co-pay debit card.

The purpose of patient co-payments is to ensure that patients (and indirectly, their physicians) have their “skin in the game” – that they understand that their treatments come at a cost, and sometimes that’s a lot. – by encouraging them to be more discerning in the drugs they use and prescribe. This should make them wonder if they can use a cheaper drug that would also work. (My doctor had prescribed the injectable drug because I had had a terrible reaction to the cheaper generic oral treatment.)

Now, with coupons, manufacturers have broken that guardrail. Amid soaring drug prices, it’s understandable that patients are desperate for help with copays and most are eager to get a grant; they often have no choice financially when their health is at stake.

But at a systemic level, these programs create a mirage that perpetuates our system’s reckless spending: they cover the true price of a drug, much of which is paid for by our insurers (and some of which is pocketed by supply chain). And that contributes to our insurance premiums and deductibles increasing year after year.

Elisabeth Rosenthal, MD, is editor-in-chief of Kaiser Health News and author of “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back.” Kaiser Health News is a national newsroom that produces in-depth journalism on health issues. ©2022 Kaiser Health News. Distributed by Tribune Content Agency LLC.

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