Professor on prescription drug coupons: “Beware of what lies hidden within”

Have you ever used a coupon to get a discount on a prescription drug? Well, one University of California professor warns all of us not to fall for a deal too good to be true.

“You have to beware of what lies hidden within,” Professor Robin Feldman, Director of the Center for Innovation at the University of California Hastings, testified during the annual Prescription Drug Price Transparency hearing hosted by the Oregon Department of Consumer and Business Services.

Those coupons, for many, seem to be heaven-sent. But they are designed to ensure patients continue to be prescribed expensive, brand-name drugs rather than more affordable generic drugs that are just as effective. And patients can’t use the coupons forever.

Here’s how they work:  You can’t afford a brand-name drug your doctor prescribed, so you find a coupon from the drug maker and get a discount. The pharmaceutical company agrees to pay either all or a significant portion of your out-of-pocket cost.

But, according to Professor Feldman, the actual cost is carefully camouflaged. And, in the end, it’s a cost we all pay.

Here’s why: Even if you get a discount on your drug, your health insurer is required to pay for the more expensive brand name. That higher cost is then factored into annual premiums, driving the cost up for everyone on the plan.

“Those are very real costs that the patient has to pay, but they’re hidden in the belly of the beast,” Feldman said.

The coupons also often come with limitations. Once they are maxed out, patients may be reluctant to change, so they’re faced with the very high cost of the brand-name drug they’ve been taking.

In 2020, the U.S. House Committee on Oversight and reform revealed how Pharma companies think about these programs. The companies strategize, using the programs to get patients to stay on the brand-name drugs, even after there’s a generic option available. These companies are so successful, they make nearly $9.00 for each dollar they spend on the coupon program, according to Feldman.

“When a company is making nine additional dollars for every dollar it hands out in a coupon, the company is not acting out of the goodness of its heart, and one would not expect it to be,” she said. “Pharmaceutical companies are, after all, profit-making entities.”

Bottom line, Feldman said, “One should beware of those bearing gifts.”