Brand discount cards increase costs to private insurers by 46%: study

As the popularity of brand discount cards grows among Canadians, how much are people actually saving? And what’s the cost to insurers?

In a study published in the Canadian Medical Association Journal, researchers waded through 2.82 million prescriptions for 89 different medications for which patients used brand discount cards. It found patients saved seven per cent, or $3.49 per prescription, for using the cards. Notably, the study said the savings varied significantly between medications.

Brand discount cards are growing throughout Canada. Patients can get them from several sources, including a physician’s office, and they are adjudicated at the pharmacy like an insurance plan to reduce how much an individual pays for the a branded product prescription.

Read: 2019 Drug Plan Trends Report: What’s next for drug plans?

The study found private insurance expenditures were 46 per cent higher when patients used brand discount cards than if they’d received comparable generic prescriptions. Public insurers were only slightly higher, at an increase of 1.3 per cent per prescription if patients used the discount cards. These elevated costs were consistent across the board, regardless of the medication, the study noted.

“This increase in cost for the insurer occurs because the difference in cost between the branded product and the generic is covered only for the patient and not for the insurance plan,” it said. “In particular, this increased cost is more likely when the claim is sent to the insurance plan for adjudication before the card is applied, making it seem to the insurer that the patient is filling a standard brand prescription.”


Read: Canada second-highest spender on generic drugs among OECD countries: report