And guess what? Payers don't like these programs, believing that co-pay coupons boost brands at the expense of generic alternatives. PBMs are also unhappy because direct-to-consumer discounts via a co-pay offset are an alternative to contracting for access via a PBM rebate.
The countervailing argument about improved adherence and therapeutic choice was added by yours truly in the article’s sidebar How Much Is Too Much?
Brand managers at pharmaceutical companies should pay attention to the growing controversy because third-party payers and PBMs are pushing back on co-pay offset programs. See the video excerpt below for my POV from a recent speech titled "The Future of Co-Pay Discount Cards."
CO-PAY CARD BOOM
Here's my handy summary for distinguishing co-payment offset programs from patient assistance programs (PAP).
Cleveland Research counted 86 co-pay programs in July 2009. When they counted again in January 2011, they found 295 programs. Whoa.
Pfizer's LIPITOR $4 Co-Pay Card is a high-profile example that is raising overall awareness of co-pay cards. The program advertises "LIPITOR for Less than the Average Cost of a Generic Statin."
WHY PAYERS AND PBMS WILL REACT
Payers are increasingly unhappy with co-pay programs and are reacting.
The HRE article tells the story of self-funded Capital District Physicians' Health Plan (CDPHP) and the Medicis Pharmaceutical dermatology product Solodyn.
According to the VP of Pharmacy and Quality Programs at CDPHP, the plan’s cost for a one-month's supply of Solodyn was $500 per month with a tier-three patient co-pay of $50, compared to $40 a month with a $10 co-pay for the generic version. The coupon eliminated the patient's $50 co-pay, so the brand got dispensed instead of the generic.
Hence, the article states: "...some health plans and employers believe the real intent behind these programs or coupons is to drive patients away from inexpensive generic drugs and toward higher-priced products, dumping more dollars into the vaults of pharmaceutical companies."
The article quotes me describing four of the most common strategies being used by third-party payers to counter co-pay offset programs.
- Enlarge the co-pay amounts between drug tiers.
- Increase the formulary rebates requested from manufacturers.
- Implement utilization management.
- Create a closed formulary.
For your viewing pleasure, I lay out the competing visions for co-pay offset programs in the video excerpt below. Click here if you can’t see the embedded video.