Why pharmaceutical coupons might push costs up overall

Molly Wood Nov 12, 2015

Why pharmaceutical coupons might push costs up overall

Molly Wood Nov 12, 2015

More and more of us are paying a greater share of our own healthcare costs.

Nearly half of everyone who gets insurance from work faces at least a $1,000 deductible.

To help stretch that thousand bucks as far as possible, a number of apps have entered the market that help consumers find the best deals on prescription drugs.

Three years ago, a couple hundred thousand consumers were finding discounts on the app GoodRx every month. Today it’s more than 3 million.

And CEO Doug Hirsch said there’s no sign of a slowdown.

“We continue to see double digit growth every month and just tremendous traction,” he said.

GoodRx and competitors like OneRx help consumers comparison shop and point them to discounts from pharmacies like CVS or Walgreens. They also offer coupons from drug makers.

Hirsh estimated consumers save about half a billion dollars a year thanks to his company, the nation’s largest drug app.

“I got an email the other day from someone who had gotten I think a liver transplant where [the patient said], ‘It’s going to be rent or it’s going to be the drugs I need to keep me alive,’” Hirsch said.

Drug app makers, the pharmaceutical industry and some patient advocacy groups argue the rise of this software helps make meds more affordable.

On paper, that means patients will take their pills and avoid getting sick again, a problem the federal government pegs at $300 billion a year.

“Lowering the cost is helpful, but it’s insufficient to make a big change in this problem,” said Harvard health policy professor Stephen Soumerai.

Soumerai has worked on getting people the drugs they need for 40 years. He said sometimes the problem has nothing to do with money. Some people, for example, forget to take their medicine, others don’t like the side effects.

Given the limited benefit, some healthcare people wonder if these money-saving apps that offer discounts and drug-maker coupons may do more harm than good.

“Couponing is definitely contributing to the high prices that we face for new pharmaceuticals,” said University of Chicago health economist Rena Conti.

The problem, she said, is coupons help patients sidestep high co-pays.

So a consumer may get a great deal, but insurers are still on the hook for their share of the prescription.

“Coupons make patients less willing to switch from high cost drugs to low cost drugs,” she said. “Therefore insures have less ability to negotiate discounts off of high prices from manufacturers.”

That, in turn, helps drug prices continue their steady climb.

One report estimates couponing could raise prescription drug spending by $32 billion over the next decade. PhRMA certainly sees this as a winning strategy. Drug makers have increased the number of coupons by at least 61 percent since 2012.

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