Medically reviewed by, Russell Braun RPH
You wait patiently at the pharmacy counter as the pharmacist grabs your prescription and your mind is full of things to do after the quick pharmacy stop. The pharmacist returns and says that will be $375 today with a smile. You try to catch your breath and wonder why in the world your doctor didn’t tell you the medication they prescribed was so expensive.
All too often these wildly high prices are the new normal for people picking up prescription medications. Then you have to make a decision… will you pay this high price or simply leave with no medication?
Many times people forgo taking the medication due to skyrocketing copays.
1. Can Drug Copay Coupon Cards help?
Prescription drug copay coupon cards are provided by the pharmaceutical manufacturer who produces the medication. They can be used when a patient with commercial health insurance is presented with a copayment amount for a medication. These copay coupons can help lower the amount of the copay the patient is responsible for.
The result is the amount the patient must pay out of pocket is lowered. This makes the medication more affordable for the patient and more likely they will use the prescribed drug.
Also known as…
There are numerous programs intended to help patients save money on prescription drugs. You may hear drug copay coupon cards also referred to as any of the following.
|Copay savings program||Copay coupon|
|Copay assistance||Manufacturer copay card|
What they are not
Drug copay coupon cards have specific rules around when they can be used and when they can’t. Therefore, it is also important to understand what they are not. Examples include:
|Patient Assistance Programs (PAPs)||State Patient Assistance Programs (SPAPs)|
|Drug Discount Cards||Pharmacy Discount Plans|
|Mobile Phone Discount Apps|
Knowing these differences will help prevent confusion between savings programs. Understanding when a copay coupon can be used versus one of the options above can save hours of time that could be spent filling out paperwork.
Make sure you to follow these steps before using a drug copay coupon card!
2. How to drug copay cards work?
It is important to understand why the manufacturers of high priced medications offer a copay coupon. The idea is to lower the out of pocket expense for the patient. Doesn’t is seem like they could just lower the price of the drug instead of fooling with a copay coupon?
To start understand this process keep in mind that these copay coupons can only be used WITH insurance. Example, a drug costs $250 total, but the insurance only pays $150 leaving the patient with a $100 copay. The manufacturer swoops in with an $95 copay coupon leaving the patient to pay only $5. Seems like a good deal right?
Here is a quick breakdown on why drug copay coupons even exist.
High list price
For reasons that are laid out in my book Prescription for Maximum Savings the manufacturer charges a high list price (spoiler alert, it isn’t all the manufacturers fault). As a result, the drug list price is set artificially high.
PBM Rebates bring the price down for the insurance company
The Pharmacy benefits managers (PBMs) who act as a middleman cuts a deal with the manufacturer to obtain the drug at the high list price, but get a big rebate for the promise of many prescriptions being filled. The rebates are paid in ways that are hard to understand and the whole process is not transparent. The patient never sees any savings from the rebate! Consequently, the high list price doesn’t impact the insurance company because they get a large portion of the rebate from the PBM.
Insurance companies use rebate savings to keep premiums lower
The PBM keeps some of the rebate and then passes the remainder to the insurance company. This is why you must have insurance for drug copay coupons to work! The PBM and insurance do not pass the rebate back to you, instead they keep it. This allows them to profit and lower the premium they charge per month for their insurance coverage. Therefore, the insurance company can get more patients on their plan, which makes them more money.
Copay is based off of the list price
Copays are set by the insurance company and are the price the patient must pay out of pocket for each fill of the medication. Often there will be different copay tiers available such as generics, preferred brands and non preferred brands. Brand drug copays keep getting higher and higher. As a result sometimes they are hundreds of dollars per month.
Manufacturers know most patients can’t afford such high copays
Many patients can’t afford to take medications because of the high monthly copay out of pocket cost. Without some type of support the expensive drug would never be picked up at the pharmacy. That is a problem for the manufacturer who wants to sell their product. Also, keep in mind they do get to write off the amount paid out in copay coupons as charitable donations and save on taxes.
Drug copay coupons helps patients get started on the drug
Thanks to lower out of pocket costs, patients can afford to start taking the medication prescribed. This is important, because after several months it becomes harder for patients to stop taking the medication. Therefore, it is important to remember the maximum amount a coupon is worth per year. If copays add up to $6,000 per year but the copay coupon is capped at $4,500 the patient will be on the hook for $1,500 by the end of the year!
Watch out for accumulators!
Many insurance companies have added a feature called a copay accumulator, because high deducible health plans are becoming more common. This is a fancy term for counting how much of the deductible (or copay) was paid by the patient versus the copay coupon. When accumulators are used any amount paid by the copay coupon will NOT count toward the deductible. See the example below:
- Patient deductible is $1500 per year.
- Drug X 30 day supply cost is $402.
- Maximum amount paid by drug X coupon is $1200 per year.
|Copay coupon pays||$392||$392||$392||$21||$0||$0|
|Deductible amount remaining||$1490||$1480||$1470||$1089||$687||$285|
As you can see from the table, over the 6 months the patient monthly cost goes from ten dollars to the full $402! This is a major problem with copay coupons because many patient are not aware of this. When the maximum limit is hit and assistance runs out, patients are stuck with the full deductible left to pay.
3. Drug Copay Coupon Card FAQ’s
1. Can you use copay cards with Medicare?
|Answer||No, these copay coupon offers can NOT be used with Medicare.|
2. Can copay cards be used with Medicaid?
|Answer||No, patients covered by Medicaid, Tricare or any other federal or state issued health insurance are ineligible for copay coupon cards.|
3. Can uninsured patients use drug copay coupon cards?
|Answer||No, you must have commercial insurance to qualify for these programs.|
4. Does every patient get the lowest copay stated on the card?
|Answer||Not everyone gets the same copay. The higher your income the more you are likely to have to pay. This can also vary based on your total copay amount.|
5. Do these programs have maximum amounts they will pay out?
|Answer||Yes, many will have a yearly maximum amount they will pay or number of refills that are allowed. There could also be an expiration date, typically after one year. Make sure you read the fine print!|
6. Will copay coupon dollars from the manufacturer count toward my deductible?
|Answer||These programs typically do NOT apply toward your deductible. Make sure to call the number on the back of your prescription drug card provided by your insurer to confirm.|
7. Do you have to register with the drug manufacturer to use the copay coupon card?
|Answer||Most will require some information from you in order to use the copay coupon card. They want to get basic information so they can track your usage of your product over time. Be careful, pharmaceutical manufacturers do not need your social security number. Protect your personal information carefully.|
8. Are there any other restrictions?
|Answer||Yes, certain states including California, Arizona, Virginia, West Virginia and Massachusetts restrict the use of copay coupon cards. They are only allowed for use when the drug in question has no generic equivalent available.|
9. Do copay coupon cards offer any other services?
|Answer||Yes, some copay coupon offers provide support services for how to use the medication and educational materials about the disease state. Be sure to take advantage of these free benefits if you use a copay coupon.|
4. How to get a drug copay coupon card
To obtain a drug copay coupon the easiest place to start is by doing a good search for the drug name + copay coupon. The manufacturer will have a website that comes up where you can sign up and register to receive the copay coupon card.
Although you will have to go to the website to find information, you do not have to sign up online. Registration by phone is also an option.
After registering and obtaining a copay coupon card you can print it off or wait for it to be mailed to you. After enrolling and receiving the card you simply take it to the pharmacy with you and give it to the pharmacist.
Does GoodRx help with copays?
In addition the manufacturer website, there are other places you can look for various copay coupon offers. Once resource is GoodRx, which has information on many of these programs listed. The nice thing about GoodRx is they also have a mobile app for smartphones that can easily be used to find these coupons while at the pharmacy.
Don’t get confused!
In addition to copay coupon cards, GoodRx also offers drug discounts at pharmacies. These are intended for use without insurance vs. copay coupons can only be used with insurance. Don’t get confused about these two different options available via GoodRx.
Other websites and mobile applications have lists of copay coupon cards as well. Some examples include:
5. Controvery around Copay Coupon Cards
The debate over copay coupon programs has gotten heated in recent years. There has even been legislation introduced in a handful of states that looks to outlaw these programs. However, some see them as required to help ensure patients can get access to medications they need to treat their conditions.
So what gives?
Price gouging by pharmaceutical manufacturers?
Many see these programs as a way for pharmaceutical manufacturers to ensure use of their products and still charging insurers high prices. This side argues that these programs prevent the use of lower cost generics instead of an expensive brand drug. This argument is the main reason government insurers and states listed above do not allow copay coupon use.
However these arguments forget about one detail, PBM rebates.
PBM’s and rebates that are not shared with anyone
As described above Pharmacy Benefit Managers (PBMs) negotiate rebates that are paid to them from the pharmaceutical manufacturer. These rebates are paid out based on the number of prescriptions that are filled for that drug.
An example would be a class of drugs to block stomach acid. If there are 5 drugs that work the same way all branded and the PBM can get the majority of patients on an insurance plan to use 1 of the 5 drugs they can drive a high volume of use and a very large rebate.
Through their formulary and possibly prior authorization the PBM can drive more prescriptions for that one drug in particular. Therefore, just because the insurance is still paying when a copay coupon is used, doesn’t mean they are spending big money on the brand drug.
In fact, they are getting a rebate from the pharmaceutical manufacturer, which in some cases could make the brand name drugs cheaper to the insurer than a generic!
What about patients?
Drug copay coupon cards do serve a few important purposes:
- Allow more patients to take medication by removing upfront cost issues.
- Provide value when no generic or therapeutic alternative exist to treat a disease state.
The bottom line on copay coupon cards for patients is they should not be your first choice for saving money on medication. In my book Prescription for Maximum Savings, I lay out step by step how to stay healthy, use less medication and save the most when they are required. Drugs copay coupon cards are one of those steps, but the steps should be done in order to realize the biggest savings possible.
Click here to get Dr. Jason Reed’s exclusive list of medication questions you MUST ask your doctor, for FREE!
Share your story
Have you used a drug copay coupon? Also, please share how it worked for you. Chime in below with your comments and thoughts.