Consumer group sues 8 drugmakers over drug coupons

Consumer group sues 8 drugmakers over drug coupons
LINDA A. JOHNSON AP Business Writer
03/09/12

Eight drugmakers are being sued by a consumer advocacy group that alleges their programs offering coupons that lower the cost of copayments for brand-name medicines are illegal.

Community Catalyst alleges that the couponing programs violate federal bribery laws because they’re meant to conceal information about the payments from health insurance plans.

Such coupons generally reduce patient copayments for brand-name drugs to what they would pay for a generic drug. The group says that drives up health insurance premiums and can cause patients to reach benefit caps quicker.

The companies sued are Abbott Laboratories, Amgen Inc., AstraZeneca PLC, Bristol-Myers Squibb Co., GlaxoSmithKline PLC, Merck & Co. Inc., Novartis AG and Pfizer Inc. They did not immediately respond to a request for comment.

Identical lawsuits, but with different defendants, were being filed Wednesday in federal courts in New York, Chicago, Philadelphia and Newark, N.J.

The lawsuits state prescription drug coupons seem to save consumers money by reducing copayments on pricey brand-name drugs, such as cholesterol fighter Lipitor and heartburn treatment Nexium. However, according to research cited by Community Catalyst, the coupons increased cost to the U.S. health care system by about $3 billion annually.

The coupons encourage patients to buy the brand-name drug rather than a generic version, which can cost 20 percent to 80 percent less than the brand-name. Such coupons have increasingly been used by drugmakers in recent years as their top blockbusters lose patent protection and the companies face the prospect of losing billions in annual revenue almost overnight.

The lawsuits seek a court ruling that such copayment subsidies are illegal and an order that the defendants stop offering the subsidies. The suits also seek unspecified damages for the plaintiffs and triple damages as allowed under federal antitrust law.

The plaintiffs are four different union health insurance plans, which say they are struggling to cover drug costs that keep rising.

“By combining direct-to-consumer marketing and supermarket ‘coupon clipping,’ pharmaceutical companies are steering consumers to higher-priced drugs in the pursuit of greater profits,” Edward Mullins, president of one of the plaintiffs, the Sergeants Benevolent Association, said in a statement.