Comments On Prescription Copay Article

In preparation for my presentation on copay cards at the PCMA event on Wednesday, I read Mason Tenaglia’s article in Pharmaceutical Executive called “Letting the Facts Get in the Way“. I think it’s a good article from the manufacturer perspective to discuss copay cards. (You can see comments from Adam Fein here.) Perhaps if Mason and Visante could get together and share data we might actually have a full perspective of the marketplace.

Mason’s article is a frontal attack on the Visante paper on the topic that talks about copay cards increasing costs by $32B over the next 10 years (which by the way is less than $1 per Rx over that time period). But, I’m not sure it really clears up the debate for me. Let me discuss a few points.

  • He talks about the APLD (Anonymous Patient Longitudinal Data) from Wolters Kluwer which can identify secondary payers. And, it can tell you if they were new to therapy, changed therapy, or simply were continuing therapy when they used the cards. This sounds great since everyone I’ve ever talked to said they can’t get to this data.
  • He proposes that the Lipitor $4 program to extend the brand after a chemically equivalent generic is available is more an anomaly than a standard program. Perhaps. While I agree that the focus of many cards is in specialty (51% according to his estimate), if the Lipitor program works (still TBD), why wouldn’t others jump on board (which would likely increase costs to payers).
  • He proposes that copay cards be used for Medicare Part D members (which most people tells me already happens). He also says that they’re the least adherent which is probably true based on total number of prescriptions which has been shown to correlate with lower adherence (not really their insurance).
  • He states that most copay cards are used for Tier 2 (formulary) medications. It makes me wonder why the manufacturers pay rebates and use copay cards…which he alludes to in his article.
  • He states that formulary access is attributed to marketshare which I think is true in a world of “me-too” products, but if products have new clinical value and better outcomes, they can get placed on a formulary without marketshare.
  • He states that copay cards won’t drive up costs in Part D because over ½ of the utilization of brand drugs is by low-income patients where they won’t need a copay card for their $6.60 average copay. I personally disagree. I think that’s a red herring as this group is very price sensitive.
  • Without giving away too much of my presentation for Wednesday (which I’ll post the slides and summary that day), he makes a key point but without the key data. “Combined medical and pharmacy costs in Medicare for oncology, rheumatology, and MS might actually be lower as a result of compliant patients.” The key word here is might. While I (like many) believe this to be true, I don’t think there are studies to support this. I agree that IF copay cards could demonstrate improved adherence AND that adherence could demonstrate lower medical costs and better outcomes THEN we would be having a different discussion.

It’s an interesting area. I’ll share a lot more thoughts on Wednesday, but I think Mason’s article is a good one for discussion on the topic.

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3 Responses to “Comments On Prescription Copay Article”

  1. I agree with your idea that $6.60 is still a problem for LIS patients. However, the cost of offsetting these patients, if co-pay offsets were legal in Part D, would be nominal. The Visante analysis (sic) projected and $18 billion increase in costs if co-pay offsets were allowed in Part D, but they used a commercial average cost per offset to come up with that number. LIS patients would have a maximum of $6.60 per transaction if manufacturers offset their out of pocket to $0. In commercial, the typical offset is $17 for contracted prescriptions that use an offset and over $30 for non-contracted prescriptions… So the $18 billion Visante projects is actually wrong by at least 100%. LIS patients = $6 x 60% of volume. Standard eligible probably $20 X 40% of volume … less than half the cost for all volume.

  2. George – Thanks for making my article visible to the payer community who might not read Pharmaceutical Executive regularly.

    You may be correct that many brands try to follow Lipitor (and Effexor XR) down the path of $4 co-pays to maintain share. However, this is clearly an unprofitable strategy. We will look at the longitudinal data shortly, but if I were to be on it today, i would wager that the generic switch rate is no different for the patients paying $4 vs. $25 in December and January. The plans that have not contracted for Tier 1 with Pfizer will NDC block branded Lipitor. Any PBM or insurer has been anticipating this LOE for years and has a plan for shifting to generic atorvastatin which will is not based on diffenetial cost sharing.

  3. A discussion PHARMA coupon cards causing increased Rx cost must include a discussion of Rx cost increases that PBM rebates from PHARMA has caused and still causes.

    Example: PBM rejects Besivance as non-covered NDC, and suggest the of Vigamox, i.e. Brand to Brand switch to gain a rebate when the best product would be ciprofloxacin at $10.00

    How is it that rebating to the patient suddenly causes all these problems but the rebating to the PBMs over the last decades did not? The truth is that rebating to the patient or the PBM causes the same problems, and one of those problems is the over use of brand name drugs.

    Creating tier copays was a way for PBMs to keep branded drugs on formularies, collect rebates, and still market the appearance of saving the sponsor money.

    Now that tier game is being circumvented via consumer rebates; no new problems are being created that did not exist before, it is just that now the PBMs no longer benefit…. the patient does. However just like when the PBMs benefit from coupons and/or rebates………. the sponsor still pays the price of over use of branded medication. Again see example above.

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