A venture involving Visa Inc. and health care payments processor 3Pea International Inc. is enabling doctors’ offices and hospitals to provide prepaid cards to patients for use in paying copayments on prescription drugs to encourage repeat prescription refills.
Drug sales reps use health care providers to distribute the Visa-branded cards, which serve as marketing vehicles for drug brands by discouraging patients from buying less-expensive brand-name or generic drugs, a marketing consultant for several large pharmaceutical companies who requested anonymity tells PaymentsSource.
When a patient uses the prepaid card at a pharmacy, the pharmacy verifies the business rules associated with the consumer’s insurance. Once the pharmacy verifies the eligibility, the prepaid processing system through 3Pea loads the benefit amount directed by the insurer into the card account, says Mark Newcomer, 3Pea president. If a customer’s insurance requires a $20 copay, then the prepaid card processing would determine that amount and cover it through the card.
The pharmaceutical company, which provides the funds for the card, pays 3Pea a service fee to provide the prepaid drug-branded Visa card. Monterey County Bank in Monterey, Calif., issues the card and holds the funds, says Newcomer.
Thousands of U.S. doctors provide the cards to patients, and 3Pea offers between 50 to 80 different drug brands associated with the prepaid cards, says Newcomer. Typically, each drug brand has its own prepaid card, he notes. Visa and 3Pea say health care providers use the cards to encourage patients to stay on their prescribed medication.
Pharmaceutical sales and managing drug-copay coupons and rebates traditionally have been a slow, often paper-based process. Applying a prepaid card product cuts down on processing time and provides other benefits, such as giving consumers instant relief from copayments, Visa and 3Pea said in an interview. “This demonstrates the flexibility of the prepaid card and how (drug and other) industries are finding more convenient ways to change business processes and use prepaid cards as a means to do transactions securely and effectively,” says Stacy Pourfallah, Visa vice president for prepaid healthcare, tells PaymentsSource.
The promotion and acceptance of the copay prepaid cards improve business efficiencies, according to Newcomer, who says his company has provided more than 1 million cards since it launched the program in 2010.
The product illustrates another example of the classic merchant-funded loyalty program, one analyst says.
“This sounds like it’s similar to health savings account debit cards in that the benefits are determined ‘back-end’ at the register during transaction processing,” says Ben Jackson, senior analyst at Mercator Advisory. “The card seems like a smart move for the pharmaceutical companies because it is delivering the benefit at the moment when it’s going to be most felt by the consumer.”
Covering the copay at the point of sale could tip the balance between a consumer choosing one drug over another because of cost, Jackson says. “If they are refilling their prescriptions, then that is going to develop customer loyalty,” he says, noting the card is coming from a doctor, who as a trusted source of information can be effective in encouraging consumers to use such cards.
MasterCard Worldwide and Discover Financial Services did not respond to questions about providing prepaid copay cards. American Express Co. said it does not have prepaid copay cards.
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