“Co-pay coupons could potentially raise health costs for employers, health insurers, and state governments by $32 billion over the next decade.”
CVS Caremark’s pharmacy benefit management business is recommending that its customers stop covering 34 drugs next year, including GlaxoSmithKline’s erectile dysfunction drug Levitra and Eli Lilly’s insulin drugs Humalin and Humalog. The move is intended to save money and combat drugmaker coupons that undermine CVS’s efforts to steer patients away from brand name drugs and towards generics.
CVS recently issued a list of 34 drugs that it recommends it client health plans no longer cover starting January 1, 2012. CVS Caremark customers can adopt the list, which includes alternative treatments for each of the omitted drugs, or instead opt for a customized drug plan.
Eli Lilly’s insulin products, Humulin and Humalog, are the biggest selling drugs that will no longer be covered. The two drugs had combined U.S. sales of $1.7 billion last year. According to The Wall Street Journal, calculations by JPMorgan found that the 34 drugs on the CVS list have combined sales of around $4.4 billion a year. JPMorgan also estimated that roughly half of those 34 drugs are supported by manufacturer co-pay coupons.
Despite its impending removal from CVS’ recommended formulary, Eli Lilly told The Journal that only a small percentage of its insulin franchise would be impacted by the change.
The move by CVS highlights the ongoing debate between the drug industry and the pharmacy benefit management sector over the true value of co-pay coupons. The drug industry maintains that the co-pay coupons work to the consumer’s advantage because the coupons cut high out-of-pocket costs while encouraging patient adherence.
The pharmacy benefit management sector argues that co-pay coupons and discount cards undermine efforts by employers and state governments to lure consumers to use cheaper generic drugs. A report published by the Pharmaceutical Care Management Association says co-pay coupons could potentially raise health costs for employers, health insurers, and state governments by $32 billion over the next decade.
Co-pay coupons are prohibited under Medicare and Medicaid because they are considered to be illegal kickbacks to the federal government, but they are legal in the marketplace outside of Massachusetts.
For its part, CVS stated that trying to meet its client’s wishes for lower total costs has been complicated by the proliferation of manufacturer coupon programs since the co-pay coupons “undermine member incentives to use lower-cost products.” The company also added that though a number of drugs soon to be removed from its list include those supported by co-pay coupons, they also removed several high-cost drugs that are not in high demand.
November 23, 2011
http://www.burrillreport.com/article-cvs_strikes_back_at_co_pay_coupons.html