Pharma coupons cut down out-of-pocket expenses for patients, but do they drive up healthcare costs?

Prescription drug sales in the U.S. totaled well over $300 billion in 2013. Medications are expensive, and especially new drugs often come with a very high price tag. But these days, consumers can cut down drug prices with the help of coupons, just like the ones you use for detergent or your favorite cookies.. Pharma coupons are available online, in magazines, and, at doctor’s offices.

Temple University podiatrist Tracey Vlahovic has a whole stack of “zero copay” coupons for two new medications she is prescribing to her patients.

“It’s been about over ten years since we’ve had anything new on the market for nail fungus,” said Vlahovic, looking at different coupon options for “Jublia” and “Kerydin,” both easy-to-use topicals.

The unsightly problem affects millions of Americans, and Vlahovic says it’s exciting to have new options for her patients. But, the thing is, both drugs are rather pricey.

At a Philadelphia drug store, the clerk quoted the price for a tiny bottle of Jublia as $531.99 with a high-deductible insurance plan. With a coupon for zero copay, the price tag came down to $40.Vlahovic said the drug coupons she gets from the pharmaceutical companies have made these two medications accessible for her patients. “Certainly, we want to use these two new medications, but if they didn’t have these coupons or co-pay assistance cards, it would be unreachable to prescribe these for patients.”

But, there’s another side of that coin, argues David Grande, an assistant professor of medicine at the University of Pennsylvania. Grande is a senior fellow at the Leonard Davis Institute of Health Economics, and has been researching pharma coupons. He says, sure, they seem like a great thing at first glance, but there’s a reason that drug companies are issuing these coupons. “They want to steer patients toward their medications,” said Grande, adding that typically, coupons are used for very expensive, new drugs.

Grande says coupons disrupt one of the fundamental systems that control healthcare costs. “For example, there may be two cholesterol drugs out there that are essentially equivalent in how well they work,” he explained. An insurance company might be able to negotiate a price for one of those medications for $25 a month, where the price for the other is $100 a month, so the insurance company tries to steer patients toward the cheaper drug. They do so by assigning higher copays for the more expensive drug. “Now, the drug company gives you a coupon that makes that co-pay go away or very low. Now a whole bunch of people want the more expensive medication,” said Grande. “From a patient perspective, it seems like a great deal. From insurance company perspective, they are now spending a lot more money than they planned.” And that, says Grande, ultimately increases our health insurance premiums.

He adds that there’s also a bit of “bait and switch” that affects consumers wallets’ directly, because coupons often only impact the first couple of drug purchases. “People want to stay on on meds they are comfortable with for years but all of a sudden their monthly co-pays go up a lot,” said Grande.

Coupons have replaced the use of drug samples in doctor’s offices according to Grande, since many doctors no longer feel comfortable with giving out samples, because of labeling issues.

Consumers are in a tough spot, acknowledges Grande. “But what patients need to do is really scrutinize these choices, really think about long term costs, and patients need to realize they’re are some negative aspects to these coupons.”