PBMs strike back at copay discounts

Pharmacy benefit managers are fighting back at prescription drug copay coupons, cards, and similar discount offers. Earlier this year, CVS Caremark began blocking about 30 drugs whose manufacturers were offering copay coupons. Express Scripts is taking similar steps.

"There are two ways to address copay discounts from a PBM and payer perspective," Everett Neville, Express Scripts vice president for pharma strategy told Drug Topics. "One is the use of mail order, because our mail-order pharmacies do not accept copay coupons. The other way - and we have been doing this for a number of years - is to not cover the nonformulary product, or to cover it at a 100% copay."

Over half of Express Scripts' clients have opted for the second strategy, Neville said. It is part of the ongoing battle between branded products and their generic equivalents. Plan sponsors typically put the new generic formulation on a preferred copay tier and increase the copay on the branded product to encourage use of the generic option, Neville said.

Manufacturers offer patients copay coupons, cards, and similar products that reduce the brand-name copay to something near the generic copay level.

"These discounts have the effect of increasing utilization of the most expensive products in each therapeutic class," said Mark Merritt, president and CEO of the Pharmaceutical Care Management Association (PCMA). "Sometimes it's brand versus brand, sometimes it's brand versus generic. These discounts are a marketing tool that encourages the utilization of more expensive products that sticks payors with the tab."

The PhRMA study

Not quite, countered the Pharmaceutical Research and Manufacturers of America.

"We strongly support the use of copay coupons, where permissible, as they can reduce out-of-pocket costs, eliminating financial barriers that may prevent patients from accessing or adhering to needed treatments," said PhRMA senior vice president Matthew Bennett in a statement.

PhRMA cited an analysis by the Amundsen Group with four major conclusions:

The PCMA study

PCMA offered its own analysis, conducted by Visante, with three conclusions:

JAMA weighs in

The Journal of the American Medical Association has also stepped into the fray.

David Grande, MD, MPA, Perelman School of Medicine and Leonard Davis Institute of Health Economics, University of Pennsylvania, Philadelphia, concluded that copay cards for Lipitor (atorvastatin, Pfizer) lower costs for patients compared to generic simvastatin. Copay cards for Crestor (rosuvastatin, AstraZeneca) increase patient costs compared to the generic statin. And copay cards for both products increase costs for insurers.

"Copay cards are good when patients have percentage copays and products are very expensive," Neville said. "Say you have an orphan drug that costs $5,000 a month and your copay is 25%. That level of copay can significantly impact compliance. Copay cards can help patients afford the product and comply with the regimen. This is a small percentage of copay cards that we see, a significantly small minority.

"Most copay cards are used to get around formularies," he continued. "It reduces the manufacturer's incentive to pay rebates. Members stay on branded products longer at a higher copay than the generic and spend more out-of-pocket. And it drives up payer costs, which translate into higher premiums."