Drug Coupons: Effective, But Costly Marketing Tool

Find out how drug coupons might cost you more money than you save.

Prescription Drugs

With prescription drug copays increasing in recent years, you may be tempted to take advantage of a pharmaceutical manufacturer coupon.  Beware that drug coupons can adversely affect you financially!  The pharmaceutical industry has effectively used drug coupons to increase uptake and loyalty to their drugs.  The New England Journal of Medicine (NEJM)’s 2013 study of drug coupons found that 62% of coupons were for brand-name medications for which lower-cost therapeutic alternatives were available.  The study found that spending on 23 sample drugs with coupons was $700 million to $2.7 billion higher over three years than it would have been without the coupons.  The NEJM estimates that coupons increase the percentage of prescription filled with brand-name drugs by more than 60%.

Patients and employer or government purchasers ultimately bear the cost of the drug coupons:

  • By purchasing a higher-priced drug, the GIC is paying more in drug costs.  This higher cost will ultimately be passed along to you with a higher premium.

  • Once taking the drug, it is unlikely that you will change your prescription when the coupon period expires.  Patients develop loyalty to a particular brand, become skeptical about switching away for a medication that’s working, or may not be aware of alternative therapies. Physicians are also slow to switch patients from band name medications to lower cost alternatives according to the NEJM.  If you stay with the same medication, you will usually pay higher copays when the coupon expires.

  • The cost of less expensive alternative drugs also increase.  One way we keep drug costs in check is to negotiate prices as part of the formulary (list of covered drugs).  By steering members to particular drugs through the formulary, the lower-cost manufacturer gets more volume and offers bigger discounts.  When volume goes down, the manufacturer will increase its price.

  • You forfeit some privacy with a drug coupon.  Most coupons require “eligibility” criteria to access the coupon including state of residence and insurance coverage.  More than 40% of coupons require additional information, such as contact details, sociodemographic characteristics, or clinical information.

The federal government bans the use of coupons when buying drugs through Medicare so Medicare members can’t use coupons.  Massachusetts used to bar drug coupons, but relaxed the law in July of 2012.  Now residents can redeem coupons for a brand-name pharmaceutical drug as long as there is no generic alternative.  Keep in mind: Be sure to carefully weigh whether a drug coupon will really save you money.

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