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Drug company coupons are illegal, lawsuits allege
By Insure.com staff

Drug company coupons to reduce insurance copayments on prescriptions are illegal bribes to dupe consumers, according to lawsuits filed against major drugmakers to stop the practice.

Three regional health insurance plans filed the class-action lawsuits in four federal courts March 7. The health plans are part of a prescription access coalition associated with Community Catalyst, a nonprofit consumer advocacy organization.

The lawsuits allege that the payments by eight drugmakers -- Abbott, Amgen, AstraZeneca, Bristol-Myers Squibb, GlaxoSmithKline, Merck, Novartis and Pfizer -- are illegal under a federal statute that prohibits commercial bribery. The lawsuits argue the undisclosed payments to patients and pharmacies are made through a "shadow claims system" designed to keep information about the presence or amount of the payments from health plans.

Under most health insurance plans, consumers pay a larger copay for expensive brand-name drugs. Community Catalyst says the drug coupons appear to save consumers money by subsidizing the copay. But ultimately, the coupons increase the overall cost of health care and health insurance premiums by driving customers to higher-priced, brand-name drugs, the group says.

"Drug company coupons are not coupons," Dr. William Jordan, a practicing physician in New York serving low-income patients, said in a Community Catalyst press release. "They are high-interest loans. We save money now, but we pay the loan sharks later."

A recent report by the Pharmaceutical Care Management Association estimates drug coupons will increase drug costs by $32 billion nationwide by 2021. Federal government health plans, such as Medicare, do not allow the coupons. They are also banned in Massachusetts.

The lawsuits were filed in New York, Chicago, Philadelphia and Newark, N.J., according to the Community Catalyst press release.

The Pharmaceutical Research and Manufacturers of America (PhRMA) would not comment on the lawsuits, but defended the use of coupons.

"Copay coupons address a serious problem of high-cost sharing for medicines," Matthew Bennett, PhRMA senior vice president, said in a press statement. "They play a valuable role in increasing access to medicines and improving patient adherence to prescribed therapies, generating better health outcomes and reducing the use of avoidable and costly medical care."

He pointed to a recent PhRMA-commissioned analysis by The Amundsen Group that showed the majority of copay coupon spending was for medicine for which substitutes were unavailable.

Pfizer said copay coupons are an example of the company's commitment to helping patients afford prescription medications.

"While many health plans have raised their copays and/or are encouraging switching to generic medications to achieve cost-savings, these treatments may not be appropriate for all patients," the company said.

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