Prescription Drug Coupons Hit as Scams in Multiple Lawsuits

Monday, March 12, 2012
Joseph Jimenez, CEO of Novartis
Half a dozen lawsuits by organized labor health funds have been filed against pharmaceutical companies accusing the companies of inflating the price of prescription medication to be paid by the insurance plans.
The big pharmaceutical companies are faced with a challenge: how can they convince people to buy brand name drugs instead of less expensive generics even though they contain the same ingredients. Obviously, consumers will pay the lowest price possible. So the drug companies arrange for doctors or pharmacists to give a patient a coupon, rebate card or drug-specific program card along with a prescription. The coupons are also available through ads or online. The drug companies then announce an inflated price for a drug—say $100—even though the equivalent generic would cost $20. The discount coupon or card reduces the price to the consumer to $15, leading the consumer to choose the brand name drug over the generic. However, the drug companies bill the health care insurance plan for $100.
Labor union health funds in New Jersey, Philadelphia and Brooklyn say drug manufacturers are overcharging them more than $3 billion a year as a result of this scam.
Unfortunately for consumers, health insurance companies are likely to make up this loss by raising premiums, so what appears to be a bargain at the pharmacy can end up actually costing more in the long run.
The plaintiffs are the Plumbers and Pipefitters Local 572 Health and Welfare Fund, the New England Carpenters Health and Welfare Fund, the American Federation of State, County and Municipal Employees District Council 37 Health & Security Plans, and the Sergeants Benevolent Association Health and Welfare Fund.
Defendants in the lawsuits are Novartis, Merck, AstraZeneca, GlaxoSmithKline, Amgen, Pfizer, Otsuka American and Bristol-Myers Squibb.
Among the medications mentioned in the lawsuits are Diovan, Diovan HTC, Janumet, Janumet XR, Januvia, Nasonex, Vytorin, Zetia, Crestor, Nexium, Avodart, Lovaza, Abilify, Enbrel, Celebrex, Chantiz, Lipitor and Sensipar. However the practice goes well beyond this group.
-David Wallechinsky
To Learn More:
Full-Scale Nationwide Attack on Big Pharma 'Kickbacks' (by Cheryl Armstrong, Courthouse News Service)

Government Recovers Record $4 Billion in Medical Fraud (by David Wallechinsky, AllGov) 


More informed than you - NOT REALLY 9 years ago
you are completely wrong. first, brand and generic have the same active ingredient in the same formulation, it's only the fillers that are different. when a brand goes to generic, the brand is still available. for example coumadin is still available, warfarin is the generic. plaquenil is still available hydroxychloroquine, is the generic. lasix is still available, furosemide is the generic, etc etc etc. second, when a discount card is used, yes the insuranse company gets billed!!!! the pharmacy bills the insurance company first, they get a copay, then they bill the coupon card, which, in this case, acts as a secondary insurance and that reduces the price to a final copay. ie. you want lipitor, your copay for brand lipitor is $25. the tech runs the information and gets a paid claim for $25, then the tech eneters the information from the card and then gets a paid claim for $4. i know it works this way because i work in the pharmacy industry as a pharmacy technition and i'm studying right now to be a registered pharmacist!!!!! ps the reason many pharmacy benefit managers are implementing step therapy is to prevent the use of coupon cards and save money.
More informed than you 9 years ago
two points that are wrong here. branded products and generic products do not have the same ingredients. when a product goes generic the branded product is no longer sold. while there my be new drugs introduced in that class of drugs there are vast differences in what is in a generic and the branded products. secondly, while rebate are out there to reduce cost the real scam is generics. branded products offer a rebates and the difference is paid by the drug company and not the managed care company. there may be cases when the difference is split between the two, however most popular generics cost the same as a branded product and offer no relief. while generics may cost less at the counter they are billing the managed care the difference and not paying any rebates to managed care. it's the biggest fleecing of america i've seen.

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