• 24 Aug 2015

    Co-pay discount programs still in the cards

    Jacquelyn Cafasso, Senior Analyst, Zitter Health Insights

    Despite the backlash amongst health plans and pharmacy benefit managers (PBMs) when co-pay cards first arrived on the managed markets scene, discount programs are still a frequently cited topic during payer visits, according to Zitter Health Insight’s ongoing research on value added programs.

    Co-pay discount programs, also called ‘co-pay cards,’ ‘co-pay offset programs,’ or ‘co-pay coupons,’ are a marketing tool used by pharmaceutical manufacturers to increase utilization, make certain branded drugs more affordable to patients, and as some believe, to circumvent health insurers’ tiered formulary co-pays. While beneficial to patients and drug makers, they could end up costing health plans more, as patients opt for the more expensive branded drugs over less costly alternatives, such as generics. Payers have even taken pharmaceutical companies to court, claiming that co-pay cards will increase their prescription drug costs substantially and likening them to ‘bribes’ or ‘kickbacks.’ CVS Caremark and other organizations have fought back by removing drugs with a co-pay card from their formularies altogether. Drug makers, on the other hand, argue that discount cards encourage patients to remain compliant on their medications, a shared goal between pharmaceutical manufacturers, healthcare providers, and insurers alike.

    As the controversy continues, one thing is clear – drug makers have not stopped talking about co-pay card programs. In 2012, roughly 14% of surveys captured by Zitter Health Insights following payer meetings with pharmaceutical manufacturers reported a discussion on any type of value added program. Of those programs, just 14% were reported to be co-pay and/or payment assistance programs, while 24% were reported to be disease management programs, and 23% were described as compliance/persistency programs. In 2014, 12% of surveys revealed a discussion on any value added program, but the relative percentage of programs that were reported to be co-pay and/or payment assistance programs jumped to 39% of all value added programs discussed. In the first-half of 2015, however, over 50% of all value added programs discussed during payer visits were reported to be relating to co-pay programs (Figure 1.).

    August Blog post chart


    Payer impressions of co-pay cards have been largely disapproving in the past, according to Zitter Health Insight’s research, with many organizations stating that while the discounts are indeed beneficial to their members, the programs do not offer any benefit to their plans and are “not in line” with their objectives.

    Nonetheless, more recent survey data indicates that payers may be warming up to, or at least becoming more tolerant to co-pay cards as they have become industry standard. In surveys taken in early 2015, payers noted that co-pay programs are indeed helpful to patients given the rising costs of specialty drugs, despite being contrary to the payers’ overarching goals. Other payers alluded to their ability to promote adherence, acknowledging that without the discount cards, some patients may not even fill a prescription at all. And this was especially true for more comprehensive co-pay programs that included complementary patient educational resources, like nursing hotlines, along with the discounted co-pay.

    Due to the unlikelihood that co-pay cards will go away anytime soon, payers may begin to look for grounds to compromise with drug manufacturers. This includes seeking opportunities to use the discount programs to increase adherence and drive down overall medical costs in the long run. Manufacturers may also look for better ways to position their discount programs as a more financially responsible and comprehensive effort to ensure that patients receive the best possible care. This may encompass targeted educational outreach and patient follow-up in conjunction with financial assistance programs.

    Co-pay assistance is a tried-and-true tactic and will remain a key part of pharma’s prevailing promotional strategy in the years to come. Zitter Health Insights will continue to monitor discussions regarding value added programs, including co-pay cards, to determine if payers and pharmaceutical companies can find their common ground.