Copay Programs –Drug Coupons Improve Healthcare Quality and Lower Costs


Perhaps it’s me, perhaps it’s the times, but before I buy anything these days, I check online for coupons.  Today, it was coupons for prescription medications.

I entered “Lipitor® coupons” into my search engine, then clicked on one of the several links that came up.  Pfizer offers a program where patients only pay $4 per month for Lipitor.  That’s right, $4!  In order to qualify, you need to have private insurance, the program cannot be used if you are on Medicare or Medicaid, and you cannot live in the state of Massachusetts, but other than that, as far as I can see, you’re eligible.  It used to be that these kinds of programs were only available after a Foundation verified that your income and assets were below a certain threshold, but not anymore.  Jackpot!

After a quick Internet search of the top 20 medicines by global sales (according to the July 2010 issue of MedAdNews), I learned that privately insured patients could get 30-day coupons or 12-month copay discount cards for 17 of the top 20 drugs.  It reminded me of a popular car insurance commercial…

High cholesterol?  Discount! 

Heartburn?  Discount! 

Rheumatoid arthritis?  Discount! 

Asthma?  Discount! 

Why are drug companies offering these kinds of discounts?  Here are two contributing factors: 

Factor #1:  Patient drug copays have risen.  One of the way a payer can better control healthcare costs is by asking the patient to bear a larger portion of his/her drug expenses.  Now I don’t have any recent articles to quote, but anecdotally, my drug copays have risen over the past several years, have yours?

Factor #2:  Higher copays lead to fewer filled new scripts and refills.  It doesn’t take a rocket scientist to understand how this works.  The more something costs, the less likely you are to buy it, even if your own health is at stake.  Certainly those with lower income/assets are impacted the most, but this issue also impacts those with plenty of money.  Click here to find some interesting statistics.

If you’ve recently lost your job and have to pay COBRA plus higher drug copays, it’s easy to see how one might forego filling a script or two, even if you have a slow-progressing chronic disease like multiple sclerosis, hypertension, or diabetes.

Bottom Line:  Drug companies want patients to fill and properly use prescriptions for branded drugs, so rather than have the prescription go unfilled, they are willing to “buy down” your copay.  To them, it would be tragic for a $60 patient copay to block a $2,200 prescription from being filled for a multiple sclerosis or rheumatoid arthritis patient.  After all, the studies show that patients who take these medicines properly have better outcomes than those who do not. 

Pfizer’s rationale for its $4 per month Lipitor copay program is slightly different.  Since alternative cholesterol lowering drugs are available as generics with a $5 per month copay (e.g. formerly branded Mevacor® or Zocor®), Pfizer wants to make sure you keep purchasing Lipitor instead of switching to these generic alternatives.

Implications for Patients:  If you are privately insured and do not live in Massachusetts, then you win!  The drug company picks up some and sometimes all of your copay with the hope that you will be more adherent to therapy.

Implications for Pharmaceutical Manufacturers:  Drug companies pick up some of the patient expense believing that the benefits will outweigh the costs.  In other words, the company believes the money that comes in from scripts that would not have been filled without “buying down” the copay will more than offset the copay costs.  Furthermore, the data suggests that the more adherent the patient is to the prescribed therapy, the better the patient outcome.

Implications for Providers:  Providers tend to prescribe what they want.  However, for those providers who are influenced by patient copays, these programs make expensive brands easier to prescribe.  Furthermore, in the eyes of the physician, the more adherent the patient is to the prescribed therapy, the better the patient outcome.

Implications for Payers (Health Insurers):  Drug copays are in place to make sure patients have some understanding of the costs of drug therapy.  Payers say they want patients to be adherent to the prescribed therapy, but they are aware that higher copays make patients less adherent.  If lowering the patient out-of-pocket expense makes patients more adherent to drug therapy, then more scripts will be filled and drugs costs will increase.  Payers have to hope that the benefit of patient adherence (e.g. fewer doctor visits, hospitalizations, etc.) outweighs this additional drug cost, something very difficult to prove.

In the Lipitor example, it appears that Pfizer is willing to invest to increase patient brand loyalty, probably in anticipation of the upcoming Lipitor patent expiration.  When generic versions become available, patient copays typically fall to $5 or $10.  If the patient copay for branded Lipitor stays at $4, payers will need to either match the $4 copay for a generic version and/or stop coverage of branded Lipitor, thereby putting the patient or pharmacy in a position where they have to ask the physician to switch to the generic.  Bottom line, payers will need to develop and execute strategies to address drug copay discount programs, especially as they relate to brand to generic conversions.

Patients, Providers, Payers, and Pharma should take note!  There are few ideas in healthcare that lower costs and improve quality.  In this case, drug companies and payers are hoping that patients who take their drugs as prescribed will consume less healthcare resources than those who do not.

Questions for the reader:

  • Have you benefited from drug copay programs?  Which ones?
  • Do you believe people are more likely to fill prescriptions when they cost less?


The views expressed are those of the author and not necessarily The University of Texas at Austin.

About The Author

Walter Kalmans

President, Lontra Ventures

Prior to founding Lontra Ventures in 2008, Walter Kalmans was Vice President, Business Development for Oncology Therapeutics Network (OTN), a...


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#6 Interesting. For those of us

Interesting. For those of us in high deductible insurance plans, checking for coupons prior to picking up a prescription may be a good practice to begin, too. After recently being diagnosed with the flu, I went off to the pharmacy to get Tamiflu. Now, after reading your post and doing a quick web search, it looks like I could have saved $15. Getting patients to apply similar consumer-based shopping habits to healthcare may be a good thing... a savings thing.

#7 Great points. Please send me

Great points. Please send me your leftover coupons. So in MBA speak, are you talking about whether medicine has a high level of price elasticity?

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