Who doesn’t want to save a few bucks these days? Members are getting a deal when they use copayment coupons provided by drug manufacturers. But coupons issued by manufacturers, often to combat the generic wave of medications that will soon wash over the traditional pharma industry, could increase the costs to employers, unions, and other payers over the next 10 years by $32 billion, according to the Pharmaceutical Care Management Association, the trade group made up of pharmacy benefit managers.

Mark Merritt, CEO, says, “Copayment coupons are used to make members avoid switching from branded drugs to generic. It’s a way to get consumers to use more expensive versions of the same drug.”

The other problem is that coupon programs exist outside of the normal claim adjudication process. Typically, claims are adjudicated when a member fills the prescription. “Everyone knows what happens,” says Merritt. But manufacturers set up the coupon program like a “shadow claims system, so that the coupons are processed separately in a system where the payers can’t see when the coupons are being used. It makes it difficult to underwrite the policies.”

To combat these coupons, insurers can educate their members, vigorously promote the use of generics, and emphasize use of mail order pharmacy, especially for chronic conditions. “Mail order pharmacy manages claims service from tooth to tail and will not accept these types of coupons,” says Merritt.

Estimated increase (millions) in Rx costs from coupons, 2012–2021*
Alabama $608
Alaska $62
Arizona $591
Arkansas $308
California $2,454
Colorado $410
Connecticut $447
Delaware $138
District of Columbia $84
Florida $2,052
Georgia $974
Hawaii $123
Idaho $149
Illinois $1,387
Indiana $803
Iowa $297
Kansas $309
Kentucky $599
Louisiana $509
Maine $140
Maryland $709
Massachusetts** $0
Michigan $1,121
Minnesota $571
Mississippi $291
Missouri $681
Montana $96
Nebraska $189
Nevada $253
New Hampshire $164
New Jersey $1,043
New Mexico $165
New York $2,316
North Carolina $1,120
North Dakota $64
Ohio $1,511
Oklahoma $401
Oregon $338
Pennsylvania $1,756
Rhode Island $140
South Carolina $547
South Dakota $64
Tennessee $890
Texas $2,560
Utah $277
Vermont $67
Virginia $935
Washington $638
West Virginia $261
Wisconsin $617
Wyoming $51
U.S. total $32,276
*Expenses are rounded to the nearest million.
**Copayment coupons are illegal in Massachusetts.

Source: Pharmaceutical Care Management Association, “How Copay Coupons Could Raise Prescription Drug Costs by $32 Billion Over the Next Decade.” November 2011.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.