The images you see above are two examples of seemingly thousands of sites that offer free drug cards and trying to figure out what they’re all about has been a mini-quest of mine ever since I was first pitched in 2008 to advertise them on Hey, It’s Free! I’m afraid to even try to calculate how much brain power I’ve spent on these things. For those who don’t know what I’m talking about, drug cards are things that you can print from online, for free, which entitle you to discount prices on a boatload of prescribed drugs. You merely give them your name and email address, hit submit, and then can print a “card” on the next page. Each card typically has your name, a Group#, a PCN#, a BIN#, and a Member#. What any of that means, I have no idea.

Somebody explain the following:

  1. Who publishes these offers?
  2. In what way, shape, or form are they benefiting from people using them?
  3. If you argue they don’t, then explain why there are affiliate companies that pay people to get other people to print and use the cards. (I can make like $0.25 for everybody I get to print one of these cards.)
  4. Why do pharmacies and/or drug companies give a discount on their products?
  5. Why does every Drug Card offer explicitly say (A) it’s not insurance and more importantly (B) you can’t use it in conjunction with insurance?

I finally broke down and decided to write this when my power company sent me a free card this week. When you start to Google for information, all you can find are a bevy of sites to print more cards. This is clearly a profitable venture for somebody out there. And again, these things work. They give the savings they promise. I’m not questioning if they’re a scam, but instead how in the hell they actually work.

I was able to find this discusion from 2009 where a few other people were curious as well. I could see it being a collaborative effort by the pharmaceutical industry, but I fail to understand how they can use the savings as a tax write-off. Deep in the thread there was a link to a 2009 NPR Planet Money segment “co-pay assistance cards”, but to me the story sounded like it was talking about specific drug coupons that pharmaceuticals offer (more on that in a minute). The final breadcrumb I was able to find was the second page of this thread. There was mention of actual company names and how they might be involved, but I’ll be honest – I didn’t comprehend much of it.

One thing I’ll say is this: from what I can tell, these drug cards are completely different than the coupons that pharmaceutical companies give out. The coupons were what the Planet Money and a recent This American Life episode called Fine Print 2011 are reporting on. (If you’re interested, it’s Act One and titled “One Pill, Two Pill, Red Pill, Blue Pill.”) Those coupons basically cut to the heart of the invention of co-pays.

Long story short, you’ve got drug companies, insurance companies, and you. Everybody want money, specifically your money. The drug companies invent Pill X and charge $500. Pill Y later comes out, which is the generic version of Pill X, and it only costs $50. Now when you used to get your pills and you had insurance, chances are you went for the original pill. People like name brand stuff over generics, especially if they’re not paying, which you weren’t. Your insurance company was. So the drug company got your money and you got the drug. Both of you were happy.

But the insurance company had to pay $500! They weren’t happy. So they invented co-pays as an incentive for you to get the cheaper drug. Now you go to get your pills and are told the co-pay for Pill X is $50, but for Pill Y it’s only $10. Chances are you opt for Pill Y! Again, you get basically the same drug, but the insurance company is only paying $90 instead of $500. But now the drug company isn’t getting your money! So to ramp up the arms race, they recently started issuing coupons which would pretty much cover co-pays or at least knock them down to the same level as the generic. So again, the co-pays are $50 or $10, but now you’ve got a $40 coupon for Pill X. Chances are you again opt for the name brand and now the insurance company is again paying way more for pretty much the same drug.

But here’s the thing. These drugs cards that I’m obsessed with aren’t like those coupons, specifically because of bullet 5, part B in my list of questions above. Drug cards are only for people without health insurance. If you take the insurance companies out of the equation, the scenarios above become obsolet. I don’t understand why there are plenty of news stories on the coupons, or “co-pay assistance cards,” but not on these drug cards.

What’s really gnawing at me is that I know somebody makes a little bit of money whenever people use the cards. I just can’t tell who. It’s the only reason the cards would show up in certain affiliate programs that I work with. The reason somebody is willing to pay me a quarter every time I get people to print out the cards is because that same person is probably making a dollar every time somebody uses one of the cards. I just can’t tell where that dollar is coming from and who is collecting it.

Seriously, does anyone know anything about these things? When the hell were programs like these invented? Why? Who is using them? Who is running them? Why? I’m afraid this will one day become my Moby Dick and I’m plum out of coffins.