Cutting Prices to Save Sales - Pharmaceutical Technology

Latest Issue
PharmTech

Latest Issue
PharmTech Europe

Cutting Prices to Save Sales
Copay coupons may help patients and drugmakers, but who ends up holding the bag?


Pharmaceutical Technology
Volume 36, Issue 1, pp. 14


Erik Greb
As patent protection expires for top-selling drugs, some firms are scrambling to stay one step ahead of generic-drug competitors. Pfizer and others are wooing insured consumers by offering copay coupons, which reduce the cost of a branded drug. These coupons are intended to discourage a patient from switching to a generic therapy. To redeem the coupons, consumers often must submit personal information that allows the firms to promote products to individual patients.

The coupons may help consumers, but they oblige plan sponsors, such as employers or state governments, to pay high prices for branded drugs when generic alternatives are available. Drug companies can prevent plan sponsors from knowing when enrollees have redeemed the coupons by processing them through a "shadow claims system," according to a Nov. 3, 2011 statement from the Pharmaceutical Care Management Association. Copay coupons will increase costs for these sponsors by $32 billion over the next decade, according to research from Visante.

At a time when state governments and private companies are pinching pennies, it's hard to believe that they will allow drug companies to use these tactics for long. Arrangements such as Pfizer's agreement to manufacture generic Lipitor for Watson, in exchange for a share of net sales, seem comparatively more benign. They don't appear to constrain patients' choice or force payors to spend more than necessary. In fact, these arrangements might be the "least bad" option for drugmakers without new blockbusters on the horizon.

Erik Greb is an associate editor of Pharmaceutical Technology.

Read Erik's blogs at http://blog.PharmTech.com/.

ADVERTISEMENT

blog comments powered by Disqus
LCGC E-mail Newsletters

Subscribe: Click to learn more about the newsletter
| Weekly
| Monthly
|Monthly
| Weekly

Survey
What role should the US government play in the current Ebola outbreak?
Finance development of drugs to treat/prevent disease.
Oversee medical treatment of patients in the US.
Provide treatment for patients globally.
All of the above.
No government involvement in patient treatment or drug development.
Finance development of drugs to treat/prevent disease.
27%
Oversee medical treatment of patients in the US.
14%
Provide treatment for patients globally.
8%
All of the above.
41%
No government involvement in patient treatment or drug development.
11%
Jim Miller Outsourcing Outlook Jim MillerCMO Industry Thins Out
Cynthia Challener, PhD Ingredients Insider Cynthia ChallenerFluorination Remains Key Challenge in API Synthesis
Marilyn E. Morris Guest EditorialMarilyn E. MorrisBolstering Graduate Education and Research Programs
Jill Wechsler Regulatory Watch Jill Wechsler Biopharma Manufacturers Respond to Ebola Crisis
Sean Milmo European Regulatory WatchSean MilmoHarmonizing Marketing Approval of Generic Drugs in Europe
FDA Reorganization to Promote Drug Quality
FDA Readies Quality Metrics Measures
New FDA Team to Spur Modern Drug Manufacturing
From Generics to Supergenerics
CMOs and the Track-and-Trace Race: Are You Engaged Yet?
Source: Pharmaceutical Technology,
Click here