In a thread on healthcare exchanges rdmc questioned why someone can get Tecfidera for $10 per month. Here’s why I think DMD manufacturers are so happy to offer us co-pay assistance. These figures are a semi-hypothetical example, so obviously not exact. I don’t work for a pharmacy, drug mfg, or ins. company, so this is my best guess of how this works out. If anyone else has insight, it’d be appreciated.
Wanda’s* co-pay for her DMD is 20% capped at $250 per month. She is covered under a $2,500 high deductible plan. This was her first year under an HSA plan, and there wasn’t any warning about the switch, so she didn’t have a chance to save any money. She was trying to decide if she should buy groceries and pay rent, or stay on her DMD because the first month was going to cost $2,750. If Wanda decided to eat and have a roof instead of staying on her DMD the mfg makes $0 per year from her.
If the mfg reaches out and offers co-pay assistance then here’s how that math might work out.
The pharmacy charges $4,500 per month for the DMD. The first month the mfg pays $2,710 in co-pay assistance, the ins. company pays $1,750, and Wanda pays $40. For each of the next 11 months the mfg pays $210, the ins. company pays $4,250, and Wanda pays $40.
The breakdown for the year is mfg pays $5,020, ins. co. pays $48,500, and Wanda pays $480. A lot of that $48,500 is coming back into the mfg’s pockets. In the end, they get a pretty great return on their co-pay assistance investment. It’s entirely possible that the mfgs offer co-pay assistance for reasons other than their warm tender hearts.
Wanda also stays on the DMD for several years because it's working and she’s getting a pretty great deal, too. Instead of paying her $2,500 deductible incrementally over the year, her DMD mfg pays almost all of it for her in the first month, and she only has to pay $480 for the year for almost all her medical care. In the end the insurance company is still getting all of their co-pays.
As to why this doesn’t apply to some government healthcare plans- I can only guess that they opted out of this ridiculous game.
*hypothetical patient with awesome employer
Wanda’s* co-pay for her DMD is 20% capped at $250 per month. She is covered under a $2,500 high deductible plan. This was her first year under an HSA plan, and there wasn’t any warning about the switch, so she didn’t have a chance to save any money. She was trying to decide if she should buy groceries and pay rent, or stay on her DMD because the first month was going to cost $2,750. If Wanda decided to eat and have a roof instead of staying on her DMD the mfg makes $0 per year from her.
If the mfg reaches out and offers co-pay assistance then here’s how that math might work out.
The pharmacy charges $4,500 per month for the DMD. The first month the mfg pays $2,710 in co-pay assistance, the ins. company pays $1,750, and Wanda pays $40. For each of the next 11 months the mfg pays $210, the ins. company pays $4,250, and Wanda pays $40.
The breakdown for the year is mfg pays $5,020, ins. co. pays $48,500, and Wanda pays $480. A lot of that $48,500 is coming back into the mfg’s pockets. In the end, they get a pretty great return on their co-pay assistance investment. It’s entirely possible that the mfgs offer co-pay assistance for reasons other than their warm tender hearts.
Wanda also stays on the DMD for several years because it's working and she’s getting a pretty great deal, too. Instead of paying her $2,500 deductible incrementally over the year, her DMD mfg pays almost all of it for her in the first month, and she only has to pay $480 for the year for almost all her medical care. In the end the insurance company is still getting all of their co-pays.
As to why this doesn’t apply to some government healthcare plans- I can only guess that they opted out of this ridiculous game.
*hypothetical patient with awesome employer
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