Both Patient (copay) assistance programs and RX coupons were envisioned with the aim of reducing barriers to care, namely cost. These programs have the admirable advantage of helping patients gain access to drugs that would otherwise be unaffordable. Both programs, however, cause payment processing complications and each individually carries different impacts in their use.

Patient (copay) Assistance Programs
Copay programs are touted as a ‘win, win, win’ for everyone involved. Manufacturers often achieve higher prices while getting better PR, patients get easy access to their treatment, and insurers see it as a preferable alternative to other cost-sharing methods.

It’s no wonder then that an estimated 300 plus drugs have associated patient assistance programs and around 80% of specialty pharmacies offer some form of copay programs.

Originally intended to reduce cost as a barrier to care, copay programs offer drugs at a price to the consumer that in some cases reaches only 1% of the actual drug manufacturers recommended price. This opened the market to lower income individuals that would otherwise never have business with the manufacturer.

Predominantly income-based, these patient assistance programs require a lengthier payment process involving patient application and manufacturer approval, this usually requires commercial or private insurance.

Further Issues
Patient assistance programs also appear to cause adverse effects in the market, with an increase in profit margins, marketing, and product development coinciding with decreases in research and development as well as increased exclusivity through patents. This is primarily due to a reduction in drug portfolios and an increased rate of mergers, thus consolidating market share and increasing manufacturer leverage.

Coupons are another popular option, allowing tiered benefit plans which benefit patients greatly, again reducing the cost to patients, these are often used in benefit plans. Their popularity has grown over the past decade with a leap from 86 indications of coupons in 2009 to 395 by 2012 alone.

An example of costs saved includes Pfizer developed 'Chantix', a drug helping patients quit smoking. As a patient this Chantix saving program can offer the drug for free for limited times or coupons often slash costs by up to 90%, as the ‘number one’ prescription-only drug of its kind, these cost reductions are often very appealing for individuals. They also bring great returns to manufacturers, with Chantix bringing $997 million in 2015 sales, up 18% from 2016. However, the impact of such pricing plans can be destructive.

More scrutiny has been given to coupons due to their availability often limited to a branded drug, these drugs are often expensive and likely have generic counterparts in the market, a 2013 analysis found that 62% of coupons studied were tied to branded drugs for which lower-cost alternatives existed.

This causes a burden on employers and healthcare, with increased costs (the cost of Chantix doubled in a single five year period) coinciding with restrictive patents limiting the potential for viable generic alternatives.

In summary, these methods for reducing consumer costs have, in turn, caused massive increases in drug costs and brought about a restrictive market which ultimately amplifies costs.

References & Research

David H. Howard, Ph.D.

Chris Gunther, PharmD, RPh

Arlene Weintraub

Author's Bio: 

Author, Freelance writer