Copayment/coinsurance in drug plans:
The amount you pay for each prescription after you've paid your Deductible (if your plan has one) is either:
A Copayment . With a copayment, you pay a set amount (like, $10) for all drugs on a tier. For example, you may pay a lower copayment for generic drugs than brand-name drugs.
Coinsurance . With coinsurance, you pay a percentage of the cost (like, 25%) of the drug.
Some Medicare Prescription Drug Plans have levels or "Tiers" of copayments/coinsurance, with different costs for different types of drugs.
Some insurance companies set the copay percentage for non-generic drugs higher than for generic drugs. Occasionally if a non-generic drug is reduced in price insurers will agree to classify it as generic for copayment purposes (as occurred with simvastatin). Pharmaceutical companies have a very long term (frequently 20 years or longer) lock on a drug as a brand name drug which for patent reasons cannot be produced as a generic drug. However, much of this time is exhausted during pre-clinical and clinical research.
To cushion the high copay costs of brand name drugs, some pharmaceutical companies offer drug coupons or temporary subsidized copayment reduction programs lasting from two months to twelve months. Thereafter, if a patient is still taking the brand name medication, the pharmaceutical companies might remove the option and require full payments. If no similar drug is available, the patient is "locked in" to either using the drug with the high copays, or a patient takes no drugs and lives with the consequences of non-treatment.