Illegal to Use Part D Drug Copayment Coupons? Yes It Is

Illegal to Use Part D Drug Copayment Coupons? Yes It Is

Did you know it’s illegal for Medicare beneficiaries to use coupons for their Part D drugs? Most people don’t….but it is. Coupons are a way that drug companies can entice beneficiaries to use drugs whose copayment, let alone the full cost of the drugs, would otherwise be too expensive. This means Medicare is then footing the bill for these more expensive brand name drugs that without coupons beneficiaries wouldn’t use. They would instead use lower cost generics. Drug companies are supposed to use safeguards to ensure beneficiaries don’t use coupons to get these high cost drugs, but such efforts are lacking, according to a recent Office of Inspector General report (PDF). The OIG found that up to 7% of beneficiaries use coupons to purchase their drugs, which amounts to about 2 million people buying more expensive drugs than they would otherwise and hence racking up Medicare’s Part D drug tab.

While beneficiaries are just doing what seems like a smart and legit way to get the drugs they require at a price they can afford, this coupon use is illegal and drug companies are most likely letting it go unchecked to protect and sustain their own profit margins.

For more information, see:

The OIG report, Manufacturer Safeguards May Not Prevent Copayment Coupon Use for Part D Drugs (PDF)

The Wall Street Journal article, Did Someone say Kickbacks? HHS Warns About Medicare Part D Coupons

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.