pharma mystery

[cellio]

I don't understand the drug industry. Ok, ok, nobody does. Let me be more specific: I don't understand what's going on with one of my glaucoma drugs, Xalatan.

This drug has been on the market since 1996 without a generic option, meaning it costs more than $100 a month if you pay for it yourself (which of course most people don't, but delving into insurance-based pricing in this post would be scope creep). My co-pay is higher for a name-brand drug than for a generic, so I have personal interest in this going generic.

About a year ago word on the street was that the patent was due to expire last September, but something seems to have happened because it's now, according to the patent office, locked in until early 2011. According to my doctor, some insurance companies are applying pressure to ophthamologists, pushing them to use different drugs instead to treat this condition because of the expense. One way or another, it appears that Pfizer has about another year to collect the big bucks from customers before they have to accept that a 15-year monopoly is a pretty good run.

Given all that, I was surprised at this morning's checkup to receive not only a free sample (a month's supply) but also a card that I can use four times or up to $350, whichever comes first, getting my prescription filled. So my next four bottles of the stuff will be free. Before I use that up I'll have another checkup, at which I might score another freebie and perhaps another card. Even if the promotion is over by then, they'll have given up four months' worth of monopoly pricing on me in their final year of being guaranteed to collect it.

How is this in their interest? I'm happy to pocket the savings; I've been pouring money into keeping my glaucoma at bay for as long as I've been paying my own bills. (It was diagnosed when I was a child.) But I don't understand why I'm getting these savings at this time.

Comments

[woodwindy.livejournal.com]

They're desperately trying to build brand loyalty while they still can? I can't come up with anything else that seems even remotely plausible -- you're right, it is odd.

[schulman.livejournal.com]

I believe that the card covers your copay, but the insurance company still has a higher payment with the expensive drug than they would with a cheaper drug, so Pfizer still makes more money than they would otherwise.

"This American Life" did a story about this tactic during one of their shows about the health care industry; I don't remember which show it was, but here's an NPR story on the same subject: http://www.npr.org/templates/story/story.php?storyId=113969968

[baron-steffan.livejournal.com]

There are a *lot* of these coupon programs.

They drive us nuts, frankly, mainly because folks treat them as point-of-sale coupons, and they're not. We fill the Rx, then the patient comes in to pick it up and hands the clerk the card at the counter. Now we have to cancel the transaction, reverse out the claim, input the card as a secondary insurance, bill the primary again, then process the coordination-of-benefits transaction. All while the patient is tapping their fingers on the counter. But, of course, I digress.

Mostly, they're for brand-only drugs in high teirs where there are generics in the same categoiry. I don't understand the economic mechanics, either. One of the most popular programs is for Lipitor, which has staved off a generic for *way* longer than anyone expected. You have to understand, as soon as a generic comes out, the brand market share is gone. Just...gone. Pffft. So it's in their interest to pay their lawyers whatever it takes. How they're managing to eat the coupon charges, though, that I don't quite get.

[yuggazogy.livejournal.com]

Maybe it's a nationwide thing to keep market share in light of states being increasingly-pro medical marijuana? (supposed to be good for glaucoma, allegedly)