What Employers Should Know About Discount Cards, Coupons, and Integrated Programs

The price of prescription drugs – even generics – is on the rise, leaving many employers and members searching for ways to manage the cost. Naturally, discount programs that offer cards and coupons are a big draw. Who doesn’t want an easy solution to high prices?

No program is without its flaws, however, and one significant flaw is that the programs don’t use the member’s pharmacy benefit to fill the prescription. That means the member may save money on their prescriptions but could be losing out when it comes to their plan deductible and out-of-pocket maximum. It also means they’d be forgoing any clinical oversight included in their plan.

An employer needs to know how these programs interact with their pharmacy benefit so they can ask themselves: Should I encourage my employees to use a discount program outside of their pharmacy plan? And does their plan itself offer savings that rival any card or coupon?

Where do the savings come from?

The companies behind these discount programs are able to offer lower prices largely because they negotiate bulk prices with drug manufacturers. They also compare prices at different pharmacies to find the best deal, and they receive payments from pharmacies when a member uses one of their cards or coupons. Different programs may offer discounts on different drugs, but they’ll usually apply to both brand-name and generic medications.

Getting and using these cards and coupons is generally straightforward – they’re free, and they’re available online or through the mail. And they can provide a valuable safety net for patients who don’t have insurance, or whose prescriptions aren’t covered by their pharmacy benefit. However, as consumers become increasingly savvy about drug prices and start to look for lower-cost prescriptions, some patients who do have pharmacy coverage are also looking to use the programs – even though the programs don’t play nicely with their pharmacy benefit.

It’s tempting for employers to push their employees in the direction of these programs to drive down their pharmacy benefit cost. But before they do, they’ll need to consider the potential impact on that pharmacy benefit.

What happens if the member has pharmacy coverage?

When an employee uses a discount card or coupon, that prescription runs through the company running the discount program – not the employee’s pharmacy benefit. The prescription won’t have the benefit of clinical oversight, where clinical experts review it for safety and efficacy and check for potential drug interactions. If there are any problems with the prescription that could impact the employee’s safety or health outcomes, the employee has no way of knowing.

Going outside the pharmacy benefit manager’s system also means the cost of the prescription doesn’t count toward the employee’s deductible or out-of-pocket maximum, and the price they pay can’t be compared to the price they’d pay under the pharmacy benefit to ensure they really are saving money. In the short term, an employee with a high deductible could be tempted to save money using a discount card or coupon – but in the long term, they could end up spending more.

What alternatives are available?

As of January 2024, employees will have an even simpler, seamless way to save money on prescriptions. The top three PBMs will all offer their own point-of-sale discount program integrated with the pharmacy benefit. The programs allow members to access low prices on commonly prescribed generic drugs with no shopping around, no extra paperwork, and no additional cards needed. Discounts are automatically applied at the pharmacy counter.

Because the discount programs are linked to the pharmacy plan, the members receive the same benefits they always have – their claim will apply to their plan deductible and out-of-pocket maximum, and they’ll receive the important clinical oversight that can help keep them safe and healthy.

Program details vary between PBMs, and employers should check with their benefit advisor for specifics about the integrated point-of-sale discount program offered by their PBM. But employers who are covered by these programs can tell their employees that, as of January, their current plan ID card will carry the benefits of a traditional discount plan – no additional action required.

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