OIG: Drug companies must do more to stop Part D co-pay coupon abuse

Drug companies aren't doing enough to stop customers from using co-payment coupons to pay for Medicare Part D prescription drugs, according to a report by the Office of Inspector General.

"A co-payment coupon sounds like a great idea," Bloomberg BNA wrote, "giving patients the ability to pay little or no co-pay for their prescription drugs. Mix a co-payment coupon with a drug paid for by Medicare Part D, however, and you've got trouble."

That's because coupons may cause doctors and patients to choose costly brand-name drugs when cheaper, equally-effective alternatives are available, an OIG special advisory bulletin noted. "When consumers are relieved of co-payment obligations, manufacturers are relieved of a market constraint on drug prices," the bulletin stated.

And Part D coupon use may put pharmaceutical companies on the hook for violating the anti-kickback statute. That statute "makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive and remuneration to induce or reward the referral or generation of business reimbursable by any Federal healthcare program," the bulletin noted. Claims for items or services resulting from anti-kickback statue violations are considered false or fraudulent under the False Claims Act.  

To test manufacturers' safeguards against coupon use in Part D, the OIG contacted 30 producers of the highest paying, top 100 brand-name drugs with coupons. All surveyed companies notify patients and pharmacies that coupons can't be used in federal healthcare programs, the OIG found. Most manufacturers rely on pharmacy claims edits to thwart inappropriate coupon use. But many of these edits don't work perfectly. And Part D sponsors can't flag coupons within pharmacy claims processing, the report noted.

Pharmaceutical manufacturers, industry stakeholders and the Centers for Medicare & Medicaid Services should work together to strengthen claims edits, the OIG recommended; but it's up to drug companies to run their coupon programs lawfully.  

Finally, if coupons are taboo, then what about the problem of patients who can't afford co-payments and therefore don't take their medications compliantly? Manufacturers can help with this by donating to independent charities offering financial aid to beneficiaries, the OIG emphasized.     

For more:
- here's the OIG report and special advisory bulletin (.pdf files)
- read the Bloomberg BNA article