Impact of brand drug discount cards on private insurer, government and patient expenditures

• Published in: Canadian Medical Association journal (CMAJ) 2019-11, Vol.191 (45), p.E1237-E1241
• Main Authors: Law, Michael R, Chan, Fiona K I, Harrison, Mark, Worthington, Heather C
• Format: Article
• Language: English
• Subjects: Comparative analysis; Drugs; Drugstores; Escitalopram; Generic drugs; Government finance; Insurance companies; Insurance industry; Marketing; Pharmaceutical policy; Pharmacy; Prescription drugs; Prescriptions (Drugs); Public expenditures; Research: Health Services; Systematic review
• ISSN: 0820-3946; 1488-2329
• DOI: 10.1503/cmaj.190098

Brand discount cards have become a popular way for patients to reduce out-of-pocket spending on drugs; however, controversy exists over their potential to increase insurers' costs. We estimated the impact of brand discount cards on Canadian drug expenditures. Using national claims-level pharmacy adjudication data, we performed a retrospective comparison of prescriptions filled using a brand discount card matched to equivalent generic prescriptions between September 2014 and September 2017. We investigated the impact on expenditures for 3 groups of prescriptions: those paid only through private insurance, those paid only through public insurance and those paid only out of pocket. We studied 2.82 million prescriptions for 89 different medications for which brand discount cards were used. Use of discount cards resulted in 46% higher private insurance expenditures than comparable generic prescriptions (+$23.09 per prescription, 95% confidence interval [CI] $22.97 to $23.21). Public insurance expenditures were only slightly higher with cards: an increase of 1.3% or $0.37 per prescription (95% CI $0.33 to $0.41). Finally, out-of-pocket transactions using a card resulted in mean patient savings of 7% or $3.49 per prescription (95% CI -$3.55 to -$3.43). The impact varied widely among medicines across all 3 analyses. The use of brand discount cards increased costs to private insurers, had little impact on public insurers and resulted in mixed impacts for patients. These effects likely resulted from private insurers reimbursing brand drug prices even when generics were available and from discount cards being adjudicated after claims were sent to other insurers in most cases. Patients and their clinicians should recognize that discount cards have mixed impacts on out-of-pocket costs.