The Downside of Drug Discounts


Discount coupons for prescription drugs may seem like a great deal, whether you can save $10 or $25 on your drug copayment, or even $15 a month every month for a year, but they may not actually be worth their face value in the long term.

Do the Savings Add Up?

Drug makers are increasingly offering to subsidize copayments for prescription drugs through coupons given to patients along with prescriptions from doctors.

If you have insurance, your drug co-payment is $20, and you get a $15 coupon for example, you’ll only have to pay $5 out of pocket. You’ll even pay less than you would for an otherwise cheaper generic substitute, if your generic drug co-payment is $10, for example.

But while you the consumer save money, your health insurance provider pays your pharmacy the difference between your co-payment and the retail price of a brand-name drug instead of the generic.

While it may not seem like a problem for the consumer, insurers say it's forcing them to pay for costly therapies, and to raise premiums to cover the expense, according to The Wall Street Journal.

Pfizer (Stock Quote: PFE) is subsidizing copayments for its cholesterol-lowering drug Lipitor, for instance, according to The Wall Street Journal, while there are several generic cholesterol lowering drugs on the market.

Generics and the Uninsured

Even worse, a patient without prescription drug coverage using a $25 off coupon to help pay for a brand name drug out of pocket could have to pay significantly more than a generic drug would cost.

Generic drugs have the same active ingredients and work in the body the same way their brand name counterparts do, but they can cost as much as 70% less out of pocket, according to the Food and Drug Administration.

So coincidentally or not, helping cost-conscious consumers with coupons may boost company coffers as well while charging insurers more.

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