Reports

Copay Assistance: The Epipen Example

What happens when a patient uses a copay coupon?
Originally published on 06/06/2017

A real world example of Mylan's copay coupon for Epipens to demonstrate the effects of such copay assistance programs.

With the rising costs of specialty therapies, patients are increasingly turning to copay assistance programs and copay coupons offered by manufacturers to alleviate the financial toxicity associated with the costs of their drugs. Simultaneously, pharmaceutical companies are offering more and more of these coupons- a NEJM Perspective by Dafny et al. estimated that half of noninjectable, brand-name drug revenue was derived from drugs with copayment coupons in 2010, a twofold increase since 2007.

While copay coupons superficially appear to benefit patients, they actually contribute to increasing health care costs. Dafny et al.'s team concluded that between 2007 and 2010, spending on 23 drugs with coupons was $700M to $2.7B higher than if coupons had not been utilized. The harms of such programs were also detailed in the Annals of Internal Medicine, in a piece by Drs. Peter A. Ubel and Peter B. Bach:

It might seem like a reasonable deal for everyone when pharmaceutical companies fund a portion of the price of their own medications through coupons or charitable contributions. But pharmaceutical companies do not offer assistance for all filled prescriptions, only for those that patients fill before their insurance kicks in. When patients reach their out-of-pocket maximums, insurers pay all future costs. Because insurers cannot distinguish between payments from patients and copay coupons, the coupons can be used to speed patients to their out-of-pocket maximum even when they have not paid the share their insurance plan requires.

The transactions displayed in the image below (download full-size slide here) show a real-world interaction on April 29, 2017 between a patient, pharmacy, manufacturer, and insurer involving the use of a copay coupon. Mylan Pharmaceuticals offers a $300 coupon for patients to use to purchase a 2-pack of Epipens, which costs $610.48. When the patient arrived at the pharmacy to pick up the prescription, they presented the coupon and were asked to pay the remainder of the cost, $310.48. The pharmacy dispensed the drug for $310.48, but still reported to the patient's insurance plan that the customer had paid the full price of $610.48. The plan recorded this as the patient's expenditure and applied it to their deductible, even though the patient only covered half the cost. In this way, copay coupons allow patients to artificially accelerate through their out-of-pocket maximum, shifting the financial responsibility of drug costs to the insurer.

Share

Research & Insights

We conduct non-partisan, independent research, and make our work accessible and informative to policymakers and the general audience alike. Browse our featured research or explore our work by article type.

Copay Assistance for Expensive Drugs: A Helping Hand That Raises…
Copy assistance programs may seem to benefit public health and lower the costs of drugs, but they actually raise the costs of health care in the future.
Annals of Internal Medicine 12/20/2016
Evaluating Industry’s Drug Pricing Claims
A closer look at three of PhRMA’s most cited talking points.
Drug Pricing Lab 11/18/2021
Mapping conflict of interests: scoping review
A scoping review of the literature to identify all known ties between the medical product industry and the parties and activities in the healthcare ecosystem.
Drug Pricing Lab 11/03/2021
Production Plus Profit Pricing (P-quad) FAQ
08/17/2021
What A Waste! The National Academy Of Medicine’s Report On…
Why Congress should not follow the National Academy of Science, Engineering, and Medicine’s recommendation to remove the JW modifier.
Health Affairs Blog 07/09/2021
Medicare Must Study Unproven, Expensive Alzheimer’s Drug
Medicare cannot indiscriminately cover the cost of Aduhelm for the treatment of Alzheimer's disease without first evaluating whether it truly works.
Bloomberg Opinion 06/15/2021
Value-Based Management of Specialty Drugs: Practical Considerations and Implications for…
Not all approaches are suited to meeting policy makers and health plans’ goals of managing specialty drugs based on their value. Researchers conducted a qualitative study with Blue Cross Blue Shield plans interested in implementing value-based specialty pharmacy management to observe the plans’ objectives, strategies, and factors influencing their ability to execute on these strategies.
AJMC 05/13/2021
Instead of debating 'first-shot' vs 'set-aside' vaccine approaches, hospitals' study…
Hospitals could start studies of their own employees to answer important questions, including whether the first-shot approach has downsides when compared to the set-aside strategy.
STAT 01/04/2021
After 4 Years of Trump, Medicare and Medicaid Badly Need…
Many promising ideas won't work as expected, and that's all the more reason for CMS to evaluate how medical care is delivered to its patients.
NYTimes 12/01/2020
Trump's Drug-Pricing Ideas Would Cost Taxpayers a Bundle
Meanwhile, pharmaceutical companies would stand to make a lot more money.
Bloomberg Opinion 09/29/2020
We can't tackle the pandemic without figuring out which Covid-19…
There may be several Covid-19 vaccines by winter, but there will also need to be a study comparing the viruses to one another as part of rolling out widespread vaccination.
STAT 09/24/2020
CMS's Proposed Medicaid Best Price Loophole for Value-Based Purchasing of…
The administration has proposed a loophole in the Medicaid Best Price rules that would dismiss linking the drug's effectiveness to its price.
HA Blog 07/06/2020
Newsletter

Stay up to date on our work and news