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'Copay coupons' won't count toward deductibles this year for many patients. What could that mean?


Some health insurers and pharmacy benefit managers (PBMs) are no longer counting the value of "copay coupons" issued by drugmakers toward patients' deductibles or out-of-pocket caps, Bob Herman reports for Axios.

Medication reconciliation: What you are missing beneath the surface

Why 'copay coupons' are controversial

Drugmakers often offer coupon cards—often known as "copay coupons"—to reduce patients' out-of-pocket costs for a product. For example, Mylan in 2016 responded to public outcry surrounding the price of its EpiPen device by offering coupons for up to $300 off of a patient's deductible or copayment, according the New York Times.

However, some experts say the coupons contribute to rising health care expenditures by incentivizing patients to choose a higher-priced option even when a lower-priced alternative is available. A team of researchers in a 2016 study estimated coupons for 23 drugs led to an additional $700 million to $2.7 billion in spending over five years.

Medicare bans the use of coupons, considering them essentially "kickbacks," Herman reports.

What's changing

In the past, insurers and PBMs have counted the value of a coupon toward a patient's deductible and out-of-pocket caps. But starting this year, UnitedHealthcare and Express Scripts are excluding the value of coupons in those calculations—making it so that only the amount that patients actually pay out of their own pockets counts as an out-of-pocket expense, Herman reports.

Leemore Dafny, a health economist at Harvard Business School who has studied the effects of drug copay coupons, said the change is "a cost-control measure that is long overdue." But Dafny said that in the short term, consumers "are going to be potentially devastated by the sudden change in out-of-pocket spending."

According to Herman, investors are concerned that the change will lead to lower sales of costly drugs for chronic conditions, such as AbbVie's Humira.

Credit Suisse's Vamil Divan in a January investor note said, "It is very likely that some patients will find this sudden increase in out-of-pocket costs unmanageable, leading to a reduction in volumes of specialty drugs. The fact that two of the leading health care insurance providers have initiated this restriction suggests to us that it could gain momentum as a major cost-containment measure" (Herman, Axios, 2/8; Sanger-Katz, "The Upshot," New York Times, 10/12/16).

Editor's note: The Daily Briefing is published by Advisory Board, a division of Optum, which is owned by UnitedHealth Group. UnitedHealth Group separately owns UnitedHealthcare.

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