The pharmaceutical industry is increasingly using drug coupons to hike
the prices for relatively inexpensive drugs. While patients may not be
responsible for the true cost of the medications, the exorbitant prices
set by drug companies are reflected in rising healthcare costs.
Rising Drug Prices
Drug prices have soared in recent years, leading to record profits by pharmaceutical
companies. The Centers for Medicare and Medicaid Services
recently issued a report on the price history of more than 5,000 drugs covered under Medicare Part
B drugs (medications administered in doctors’ offices and other
outpatient settings) and Medicare Part D drugs (medications patients generally
The data revealed that the average price of all Part D drugs on the market
in both 2015 and 2011 increased 83.6 percent. In addition, the prices
for many low-cost drugs skyrocketed by more than 1,000 percent. For example,
the average cost of the asthma drug mannitol increased more than 2,000
percent over the five-year span.
Drug Coupons Mask High Prescription Prices
Los Angeles Times reports, coupons allow drug companies to raise their prices without drawing the
ire of consumers. “Via a coupon, the manufacturer can make its high-priced
drug look as cheap as these over-the-counter medicines,” Matt Schmitt,
an assistant professor at the UCLA Anderson School of Management, explained.
Often referred to as “copay cards,” drug coupons lower or eliminate
the out-of-pocket costs patients must pay for certain prescription medications.
They are available via direct mail, online websites, magazine inserts,
and physicians’ offices. Despite the deep discounts to consumers,
the drugs, of course, aren’t really free. The patient’s insurer
is left footing the bill for the expensive medication.
In one example detailed by
The Times, Horizon Pharma charges $2,061 for a month’s supply of its pain
reliever Vimovo. The costly prescription is a combination of the generic
versions of Aleve and Nexium, both of which are available over-the-counter
for a fraction of the cost of the prescription drug. After acquiring the
rights to Vimovo in 2013, Horizon Pharma raised its price for 60 tablets
from $115 to $799. It has instituted seven additional price hikes over
the past two years. Not surprisingly, the drug company’s CEO also
saw his compensation rise. Timothy Walbert’s pay package was valued
at $93.4 million in 2015, which represented a 10-fold increase from the
Horizon Pharma is just one example. As reported by
The Times, a recent study concluded that spending on 23 medicines sold through coupons
was approximately $2.7 billion higher over five years than it would have
been without the benefit of co-pay cards. The federal government prohibits
the use of coupons when purchasing drugs through Medicare health insurance,
and several states have also enacted bans on co-pay discounts. However,
given the increasing use of drug coupons, additional steps are needed
prevent pharmaceutical companies from exploiting this loophole.
If you or someone you care about has suffered serious harm due to a defective
drug or other medical product, you may be entitled to compensation. To
discuss your legal rights, don’t hesitate to contact
a San Diego injury lawyer at the Law Offices of Robert Vaage for a free