Healthy Skepticism Library item: 16016

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Wang SS.
Drug Makers Circumvent Co-Pays Using Rebates
The Wall Street Journal Blog 2009 Jul 20
http://blogs.wsj.com/health/2009/07/20/drug-makers-circumvent-co-pays-using-rebates/

Full text:

Here’s how a co-pay for a medicine is supposed to work: Insurers set up a tiered system where patients fork over a smaller co-pay for cheaper drugs and a higher one for more expensive, brand-name drugs. The setup is supposed to encourage patients to use cheaper generics.

But the drug makers are disrupting that system, according to the WSJ. Increasingly, they are paying part of patient co-pays for brand-name drugs, forcing insurers to ante up for these pricer drugs.

For instance, Pfizer’s blockbuster drug Lipitor costs more than $1,400 a year, four to eight times more expensive than a similar generic cholesterol fighter. So, Pfizer started giving patients up to $15 off their co-pay using a rebate card they got at their doctor’s office. Now, the drug maker provides cards directly to patients.

“Initially, we did it quite honestly because we were facing a generic presence in the marketplace,” Jim Sage, who manages marketing for Pfizer’s cardiovascular drugs, told the WSJ. “We also did it because prescribing decisions were being based not just on clinical factors, but also cost.”

Insurers say that the result is cost-shifting from patients to the insurance plan, which results in raised premiums for everyone. Drug makers counter that more expensive co-pays imposed by health plans are making brand-name medicines unaffordable for patients. The WSJ notes that the average co-pay jumped 44% for preferred branded drugs to $26 a prescription between 2002 and 2008, but the overall cost of the same drugs during that period skyrocketed 64%.

That leads some insurers to say that if the drug companies really wanted to help patients, they should just lower the cost of drugs.