Senators Hassan, Grassley Call for Review of Big Pharma Tactic to Raise Drug Costs

WASHINGTON - U.S. Senators Maggie Hassan (D-NH), and Chuck Grassley (R-IA) are calling on the Government Accountability Office to investigate pharmaceutical companies' use of "coupons," as a tactic used to steer patients away from lower-cost generics. The Senators are asking GAO to investigate the ways in which pharmaceutical companies use drug coupons to lure in patients with lower upfront costs but then discontinue those coupons with little to no notice, leaving people with higher bills at the pharmacy counter. Over time, this can keep drug prices high, create unpredictable out-of-pocket costs, and raise insurance premiums for everyone.

"Drug companies are often able to keep their drug prices outrageously high by setting their own list prices, and then offering copay coupons in order to help some patients afford those high prices." Senators Hassan and Grassley wrote. "Companies also use drug coupons to increase drug sales for a particular brand-name drug and to steer patients away from lower-cost generics. In fact, pharmaceutical companies earn as much as $4 more in drug sales for every $1 that they spend on prescription drug coupons."

"While these coupons often lower or eliminate the patient's copays in the short-term, in the long-term they could lead to the patient unnecessarily paying more for the brand-name drug. Brand-name drug coupons can also lead to uncertainty about a patient's out-of-pocket costs from month-to-month, since pharmaceutical companies can change their coupon programs and patient eligibility rules for those programs at any time," wrote the Senators in laying out the problem. "We are concerned that these coupons can enable drug manufacturers and pharmacy benefit managers to maintain high list prices and drive up costs for all patients through higher insurance premiums."

Senator Hassan is working to lower prescription drug costs for Americans. Earlier this year, two of Senator Hassan's bipartisan measures to lower prescription drug costs passed into law. The Increasing Transparency in Generic Drug Applications Act will speed the approval of generic drugs by ending the lengthy guessing game that manufacturers currently go through with the FDA, enabling generic drugs to get to market sooner, lowering prices for consumers, and saving taxpayer dollars. The Patients Before Middlemen (PBM) Act helps stop pharmacy benefit managers from driving up prescription drug pricing for seniors. Last month, Senator Hassan successfully forced a big pharmaceutical company to abandon its monopoly and egregious price hike strategy to allow a lower-cost generic inhaler for children to enter the market.

Click here or see below for full text of the letter to GAO Acting Comptroller Orice Williams Brown:

Dear Acting Comptroller General Brown,

We write to request that the Government Accountability Office (GAO) conduct a review of manufacturer prescription drug coupons and their impact on drug utilization and the commercial insurance market.

Pharmaceutical companies often offer coupons to privately insured patients in order to provide discounts on brand-name drugs even when lower-cost generic alternatives are available. While these coupons often lower or eliminate the patient's copays in the short-term, in the long-term they could lead to the patient unnecessarily paying more for the brand-name drug. Brand-name drug coupons can also lead to uncertainty about a patient's out-of-pocket costs from month-to-month, since pharmaceutical companies can change their coupon programs and patient eligibility rules for those programs at any time. We are concerned that these coupons can enable drug manufacturers and pharmacy benefit managers to maintain high list prices and drive up costs for all patients through higher insurance premiums.

Drug companies are often able to keep their drug prices outrageously high by setting their own list prices, and then offering copay coupons in order to help some patients afford those high prices. Companies also use drug coupons to increase drug sales for a particular brand-name drug and to steer patients away from lower-cost generics. In fact, pharmaceutical companies earn as much as $4 more in drug sales for every $1 that they spend on prescription drug coupons. Manufacturers are banned from offering these coupons to patients who are covered by Medicare and Medicaid under anti-kickback laws, due to the fact that the coupons encourage doctors to prescribe more expensive drugs under public payers when cheaper versions are available.

One reason why patients may use manufacturer prescription drug coupons is because it is difficult for the patient to determine which prescription drug option will be most affordable. Many patients do not know what they are expected to pay for a drug when they go to the pharmacy counter. One way that patients can get accurate and clinically appropriate information about their most affordable medication option is through an online real-time benefit tool, which shows providers and pharmacists real-time drug cost information, coverage information, and alternative medication options within electronic health record systems. The Consolidated Appropriations Act of 2021 required Medicare Part D plans to increase the use of these real-time benefit tools, and we seek information on how these tools are being used in private insurance plans as well as Medicare Part D.

To better understand the impact of prescription drug coupons and the availability of real-time benefit tools in the commercial insurance market, we request that GAO provide responses to the following questions:

1. Describe, to the extent that reliable data are available, the availability and characteristics of manufacturer prescription drug coupons for the highest expenditure prescription drugs in the commercial market. Examples of such characteristics could include whether the drug is single source or has generic equivalent or a biosimilar, whether the drug has a therapeutic substitute, the dollar value of the coupon, who is eligible to use the coupon, and the terms and conditions for the coupon.

2. Describe, based on evidence from published studies, how manufacturer prescription drug coupons can affect the use of a drug.

3. Describe how plan sponsors in the commercial market have responded to the use of manufacturer prescription drug coupons for the highest expenditure prescription drugs, including how coupons are considered in benefit design decisions and patient premium and cost-sharing calculations.

4. Describe the extent to which prescribers, patients, and pharmacists are able to access to electronic real-time benefit tools in the commercial health insurance market.

Thank you for your prompt attention to this request.

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