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Something Smells Fishy − Prescription Drug Coupons

Last week there was a news story about Sanofi-Aventis SA overcharging state Medicaid programs by manipulating its “best price” for its anti-inflammatory nasal sprays. This got me thinking about why the Justice Department doesn’t go after pharmaceutical companies for issuing coupons and discount cards.

The details of these offers vary, but generally, the patient downloads a coupon for an expensive brand-name prescription medication and takes it to the pharmacy along with a prescription from their doctor. The consumer is happy with the price break. The programs appeal to physicians because their patients can afford to take their medications.

However, I have always found it fishy that these cards cannot be used by patients covered by Medicaid and Medicare. Call me skeptical; however, doesn’t this artificially inflate the price of drugs?

Virtually every card offered saves money for patients, but it also jacks up the price for government payers. Why? Because the wholesale price of the drug remains high, while the immediate cost to the individual purchaser is lowered. It reminds me of something currently going on in some real estate markets. Say you sell your house for $500,000 and than turn around and give a $100,000 back to the buyer. In that way, you get to say that the price of your house is a cool half million. In truth, though, its a move designed to prop up real-estate values in a downward market.

Are coupon deals on prescription medications a house of cards that keep drug costs artificially inflated? Something, perhaps, worth considering.

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