Dec. 29--Major drug manufacturer Pfizer is trying to capture the attention of a coupon-focused society by offering a card that allows insured patients to buy the company's best-selling drug, Lipitor, for a $4 co-pay, rather than paying $10 for a generic version of the cholesterol-lowering drug.
Pfizer's goal is to extend consumer loyalty for Lipitor past June, when several generic options will become available.
However, an advocacy group for pharmacy benefit managers such as Medco and CVS Caremark says the Pfizer campaign and others like it have the potential to cost N.C. consumers and employers more than $1.1 billion over the next 10 years through higher co-pays for other drugs and higher deductibles and premiums. Patients may save money with the lower co-pay, but their insurance companies and employers will pay more for the Lipitor than for a generic version.
Employers have urged workers for several years to switch to generic drugs -- offering lower co-pays as a carrot -- to help reduce their reimbursement costs. Those efforts have lowered the increase of annual prescription drug costs to 5 percent in 2011, compared with 10 percent in 2006 and 17 percent in 2001, according to consulting group Mercer.
Lipitor typically costs about $155 for a month's supply. By providing the $4 co-pay card to an insured consumer, the rest of the cost typically is absorbed by an employer's insurance plan.
By comparison, a generic version of Lipitor typically costs between $115 and $120 for a month's supply. When a consumer chooses the generic over Lipitor, it can save their employer's plan between $35 and $40 for each prescription.
"Drug companies are offering coupons that cover the higher co-pays but not the cost of the actual drug," according to the Pharmaceutical Care Management Association, a trade group that represents pharmacy benefit managers such as Medco. Pharmacy benefit managers dispense prescriptions, often through the mail; help drug plans negotiate discounts with drugmakers; and process claims. They often compete with independent pharmacies.
The Pharmaceutical Research and Manufacturers of America, a trade group for drug manufacturers, said society benefits as a whole from the co-pay cards.
"Coupons and vouchers provide an important benefit to patients by defraying the cost of out-of-pocket payments, breaking down barriers to access and encouraging better medication adherence," said Karl Uhlendorf, vice president of the Pharmaceutical Research and Manufacturers of America.
Mark Merritt, president and chief executive of PMCA, said another concern is that when consumers redeem co-pay coupons, the drug companies process them through what he called a "shadow claims system" that prevents employers and other plan sponsors from knowing when enrollees have used them.
An advocacy group for independent pharmacies says there's a certain hypocrisy in the pharmacy benefit managers' outcry over the co-pay card since they often get what are known as "rebate-driven incentives" from drugmakers.
Manufacturers, in order to promote their brand-name drugs to pharmacy benefit managers and insurance plans, offer rebates to those groups that could be worth up to $50 a prescription. But the employer still ends up picking up the cost of the drug.
"When a co-pay card is used, the pharmacy benefits manager does not get to grab the rebate. The manufacturer gives the patient the rebate via co-pay card instead," said Dave Marley, president of Pharmacists United for Truth and Transparency and owner of Marley Drug of Winston-Salem.
"They complain about the co-pay cards costing employers and consumers, but they're OK with the rebate programs pushing the brand name that costs employers and consumers," Marley said.
The rebate programs for pharmacy benefit managers are contributing to Medicaid Part D recipients entering the "doughnut hole" more quickly than they would through buying generic drugs, Marley said. Co-pay coupons cannot be used in government programs.
The Medicare doughnut hole is the gap between where basic prescription drug coverage leaves off and "catastrophic" coverage begins. The Medicare patient must pay a much larger share of prescription drug costs until reaching the point where catastrophic coverage begins and more drug costs are covered again.
A typical Medicare recipient is expected to pay about $900 out-of-pocket for prescription drugs in 2012. When the Part D plan pays out an additional $2,030, or the total drug costs reaches $2,930, the recipient enters the doughnut hole.
While in the doughnut hole, recipients pay 50 percent of brand-name prescription drug costs, plus a dispensing fee, and 97 percent of generic prescription drugs until they reach $4,700 in out-of-pocket costs for 2012.
At that point, recipients would pay a small co-pay and the prescription drug plan pays the remainder of the costs until the end of the year with no limit.
"Most people have figured out the best way to stay out of the doughnut hole is taking generics whenever possible," Marley said.
"But some pharmacy benefit managers are blocking consumers from getting the generic in favor of dispersing Lipitor as a byproduct of their discount program."
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(c)2011 Winston-Salem Journal (Winston Salem, N.C.)
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