Don't get hooked on prescription-drug coupons

To save a buck on prescription medications, more consumers than ever are turning to manufacturer coupons. They can make expensive brand-name prescription drugs seem more affordable. But they might steer you to drugs that aren't the best choice or that you don't need at all. So how do you know when to clip and when to skip?

Drug manufacturers have offered these programs more in recent years, in part because insurance companies often charge consumers higher co-pays for brand-name products. The offers can be enticing. Indeed, nearly 16 percent, or nearly 19 million, of all Americans who regularly take a prescription medication have used coupons in the last year to save money, according to a 2011 survey by the Consumer Reports National Research Center.

For example, you can get free trials or deep discounts on many well-known medications, including the cholesterol-lowering drugs Crestor (rosuvastatin), Lipitor (atorvastatin), and Vytorin (ezetimibe/simvastatin), as well as the antidepressants Cymbalta (duloxetine) and Effexor XR (venlafaxine). See the chart below for more details.

Unfortunately, they're often not the best, first choice for many conditions. For example, according to a recent analysis by Consumer Reports Best Buy Drugs, although Actos is used to treat type 2 diabetes, three other low-cost generic medications actually work as well as or better than Actos: metformin, glimepiride, and glipizide, alone or in combination. A month's supply of each of them is less than $30, and they can be found on the discount generic drug lists of many chain pharmacies for as little as $4.

Moreover, drug manufacturers' programs are often designed to capture interest with low costs initially, but prices will go back to their original level once you are no longer eligible or the program ends. With Crestor, for example, there's a longer-term savings program that applies to 12 prescriptions filled within a 14-month time frame. After that, you are on your own, paying either the full co-pay or the cash price for medication, depending on your level of insurance coverage.

In addition, the programs often aren't available to everyone. The Crestor program is a 30-day free trial of the drug. If you download the voucher, you'll find that you're automatically enrolled in the "Crestor Support" program, which offers additional co-pay discounts for some people, based on insurance coverage. In this case, those covered by Medicare, Medicaid, or other federal insurance programs, or who don't have insurance, are not eligible.

If you regularly take a drug or are about to begin one that has a coupon or discount program, there are a few issues to consider. Among them:

Do the math. Even if you have a coupon for a brand-name drug, that doesn't mean it will be your least-expensive option. While coupons might make brand-name drugs cheaper, less-expensive generic equivalents may be available, and many of those generic alternatives are just as effective and as safe as their brand-name counterparts. Co-pays for generics are often much lower—sometimes as little as one-tenth the cost—than those for brand-name drugs. Before starting on a brand-name drug, ask your doctor or pharmacist about comparable generics. It could save you hundreds of dollars or more a year. (See chart below for some examples.)

Avoid imitations. If you do elect to use a coupon, get it from a trusted source, like your doctor's office or the manufacturer's website. Websites offering discounts on prescription medications abound. However, those programs may not be legitimate or may not be accepted by your insurance provider or your pharmacy.

Watch for limitations. Many manufacturer-issued coupons are only available for a limited supply of the drug. For medications to treat a chronic condition, find out if your insurance will cover the brand-name drug available with the coupon, and see how the co-pay compares to that of a comparable generic before starting it. None of the programs we found allowed those covered by Medicare, Medicaid, or any federal program to participate.

Consider the long term. Insurance companies generally charge lower co-pays for generic drugs because they are usually less expensive for them as well—and with the idea that lower co-pays will encourage you to use those less-expensive products. In some cases, with certain brand-name drugs, your insurance may offer lower co-pay prices when they have struck certain deals with a drug manufacturer. (See our most recent story about Lipitor for an example.)

Drug companies, in turn, have created coupon programs as part of a marketing effort for their pricey, brand-name drugs. The coupons lower your costs, but not those of your insurance company, according to a recent report by Pharmaceutical Care Management Association, an insurance industry advocate.

For example, if a brand-name drug costs the insurance company $150 for a one-month supply, and the co-pay is $50, they still pay $100 for your prescription, regardless of whether or not you use a coupon that reduces your co-pay. The result? Those discount programs can raise the cost for all those covered by their plans. The same report estimates that coupons could actually increase the amount spent on prescription drugs by consumers, their insurance companies, or employers by $3 billion annually. Ultimately, those costs could be passed on in the form of higher premiums—in short, more money out of your pocket.