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How drug discount cards, coupons impact total cost of healthcare

Mar 22, 2019

As an Accountable Care Organization (ACO), CHI Health Partners is working to achieve the triple aim of improving the quality of care, the cost of care and the health of the populations we serve. An increasingly important component of the total cost of healthcare is pharmacy costs.

Recent advances in biologic medications have transformed the care of rheumatologic, oncologic and neurologic diseases, among others. These new medications, while very expensive, offer new hope for patients with many life-threatening illnesses.

“Me too” medications

Then there are the “me too” meds. These medications – which include the rebranding common medications in new dosages or combinations – have costs that exceed any potential benefits over their lower cost competitors.  Drug manufactures are increasingly using discount cards and coupons to promote the use of these medications. By reducing or even eliminating beneficiaries’ copayment requirement, drug manufacturers deceive beneficiaries — and their doctors — into believing there is no longer a reason to use lower-cost generic drugs.

Health plans, which pay for most of the cost of every drug dispensed, are thus increasingly stuck with the higher tabs that arise from plan beneficiaries’ use of higher-cost brand drugs. This increased cost, however, is eventually passed on to the public in the form of higher insurance premiums.

Discount cards, coupons 

Federal anti-kickback statutes prohibit these discounts cards and coupons from being used with drug coverage provided through Medicaid or Medicare Part D.

Commercial insurance companies have tried to limit the use of these medications since their high cost is not justified by any significant benefits. These efforts include placing them in higher tiers of their formularies and requiring high copays. Pharmaceutical companies, in response, have released discount cards and coupons which cover the copay cost for the patient; however, the insurer is still left paying the bulk of the cost of these medications. Many co-pay cards also cap the total annual benefit. This means that toward the end of the year, when the patient has met their deductible (and so would not be responsible for any copay on their medications), the card stops paying and the insurer is on the hook for the full cost of the medication.

In our value-based contracts, we are responsible for managing the total cost of care for the populations we serve. These high-cost medications contribute to overall healthcare expenses and limit our ability to succeed as an ACO. They also place us at risk of having to pay for costs that exceed our benchmark budget. Avoiding the use of these low-value medications is an easy way to help control the rising cost of healthcare without sacrificing high-quality care for our patients.

Some examples of these discounted medications include:*

New Combinations; Dosing of Old Meds


Cost of Script


Esomeprazole + Naproxen



Doxylamine + Vitamin B6



Topical Diclofenac



Expensive Brand Name Drugs(with Generic Alternatives)


Cost of Script

Generic Alternative

Cost of Script






(simvastatin) $5.06



(atorvastatin) $5.93




(esomeprazole) $29



(esomeprazole) $29


*Cost data from BCBSNE

Category: Value-based care