Brand-name drug discount cards also known as co-pay cards are coupons offered by drug manufacturers to encourage patients to use brand-name drugs even after much cheaper generics became available.
Despite often boosting savings for customers, the study's findings published in the Canadian Medical Association Journal show that drug discount cards actually increased private insurer costs by 46 per cent and public insurer costs by 1.3 per cent, compared to patients purchasing generics instead.
"We know that generic drugs are equally effective for the vast majority of patients. Given that, I believe these cards are leading to unjustifiable increases in health care costs," said the study's lead author Michael Law from the University of British Columbia in Canada.
While discount cards decreased some patients' out-of-pocket costs by 7 per cent on an average, the study surprisingly found that many patients who filled prescriptions using a card were worse-off financially as a result.
This wasn't the case for all drugs, but in some cases patients could pay up to $10 more out-of-pocket when using a discount card.
The study used Canadian national pharmacy data from 2.82 million prescriptions for 89 different medications where brand-name drug discount cards were used and compared the costs of these prescriptions to matched generic equivalents.
The researchers said that patients, their clinic and employers should be aware of the impact that brand-name discount cards have on the healthcare system.
For example, the increased costs to private insurers will likely be passed on to the patients and their employers in the form of increased insurance premiums.
"Regardless of whether they hold insurance, patients should check the relative price between brand-name drugs with a discount card and the equivalent generics at their pharmacy," said Law.
( With inputs from IANS )