What You Need to Know
- In 2015, coupons were available for more than 700 brand-name drugs.
- The California law restricting coupons may affect about 20% of the users of the drugs covered by the law.
- Medicare and Medicaid see use of the coupons as violations of an anti-kickback law.
Prescription drug coupons may make patients happy, but they may also hurt health insurers’ efforts to control drug spending.
Analysts from the Congressional Budget Office, an arm of Congress that helps lawmakers understand bills, laws and trends that affect federal spending, present the case against drug coupons in a new report on U.S. prescription drug spending trends.
“Drug coupons make expensive therapies more affordable and increase manufacturers’ unit sales,” the CBO analysts write. “By covering some or all of an enrollee’s co-payment or coinsurance … coupons reduce or eliminate the cost difference between a more expensive drug and a cheaper generic or preferred alternative. When a coupon induces an enrollee to choose a brand-name drug over a generic, it increases the cost to insurers, because they then must cover the more expensive brand-name drug for that enrollee.”
Pharmaceutical manufacturers were offering coupons for more than 700 brand-name drugs in 2015, up from fewer than 100 in 2009, the analysts add.
Tamara Hayford, David Austin and other CBO staff members prepared the report at the request of Sen. Ron Wyden, D-Ore., chairman of the Senate Finance Committee.
Prescription drugs can save people’s lives, and they can reduce spending on other, more invasive types of health care such as operations.
But lawmakers, health insurers and government health program managers became concerned in the 1980s, when spending on prescription drugs began to increase rapidly. U.S. spending on prescription drugs increased to $1,073 in 2018, or 10% of total 2018 spending on health care services and supplies, from $140 in 1980, or just 5% of 1980 spending on health care services and supplies.
But after taking negotiated discounts into account, the average inflation-adjusted price of a prescription drug purchased through a Medicare Part D prescription drug plan fell to $50 in 2018, from $63 in 2009.