Pfizer, the maker of Lipitor, is one of eight drugmakers...

Pfizer, the maker of Lipitor, is one of eight drugmakers being sued by a consumer advocacy group that alleges their programs offering coupons to reduce co-payments for brand-name medicines are illegal. (Jan. 25, 2009) Credit: AP

Eight major drugmakers are being sued by a consumer coalition claiming the companies' popular coupon programs, which cover much of the patient co-payment for hundreds of brand-name prescription medicines, are illegal.

Community Catalyst alleges the increasingly common couponing programs appear to save patients money but increase overall health care costs significantly and violate federal bribery laws because they're meant to conceal information about the payments from health insurance plans.

The coupons will eventually drive up consumers' health premiums and can cause patients to reach benefit caps quicker, according to Community Catalyst's Prescription Access Litigation project, which has sued drugmakers over their pricing and promotion strategies.

Insurance plans and other prescription benefit managers for years have used tiered co-payments to steer patients to generics and lower-cost "preferred" brand-name drugs. They are now expected to fight back with new strategies to discourage coupon use.

Such coupons generally reduce patient co-payments for brand-name drugs, such as cholesterol fighter Lipitor and heartburn treatment Nexium, to the co-pay for a generic drug. That's typically around $10, well below the average $25 to $75 co-payment for preferred and non-preferred brand-name drugs, respectively. Some coupons instead offer a set amount such as $25 or $50 off the co-payment.

Either way, employers and other prescription plan sponsors often end up paying much more when coupons are used, because they cover the bulk of the prescription's cost and the patient is getting a much pricier drug.

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.

On Wednesday, Community Catalyst was filing identical lawsuits naming defendants in federal courts in New York, Chicago, Philadelphia and Newark. The companies sued are Abbott Laboratories, Amgen Inc., AstraZeneca Plc, Bristol-Myers Squibb Co., GlaxoSmithKline PLC, Merck & Co. Inc., Novartis AG and Pfizer Inc.

Pfizer said it would vigorously defend against the allegations. "Given the larger cost-sharing burden being placed on patients, Pfizer supports the use of company-sponsored programs which help patients with out-of-pocket expenses for the medicines prescribed by their physician," the company said.

The other companies did not immediately respond to a request for comment.

Latest Videos