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For example, a month’s supply of brand-name Lipitor costs about costs about $175 without insurance. For insured patients, the copayment is typically $25 to $50, well above the average copayment of about $10 a month for a generic drug.

Under Pfizer’s Lipitor For You coupon program, Pfizer absorbs up to $75 of the patient’s out-of-pocket cost. Insured patients pay only $4 a month _ less than a generic drug copayment _ unless their copayment is higher than $79 a month; the insurer pays the remaining cost. Uninsured patients get the $75 off each prescription and then pay the remaining $100 or so.

While the deal slashes Pfizer’s profit, the company still makes more money than it would if all its customers defected from Lipitor to a generic. Ian Read, CEO of New York-based Pfizer, recently said the strategy on Lipitor alone brought the company hundreds of millions of dollars in extra profit. He called the program “a great success.”

The coupons only work with private insurance, though. Patients with Medicare or other government health insurance are barred from using them.

Not surprisingly, commercial insurers don’t like the coupons, because their share of the cost for a brand-name drug is much higher than for a generic pill. Virtually all prescription plans automatically switch patients to a new generic drug the next time they refill their prescription, and they usually bumped brand-name drugs that have just gotten generic competition up to the plan’s highest copayment level, which can be $75 or more.

The coupons throw a wrench into insurers’ strategy of getting as many patients as possible to take generic drugs, which account for about 80 percent of all prescriptions filled in the U.S.

A study late last year by the Pharmaceutical Care Management Association, a trade group for prescription benefit managers, estimated copay coupons could raise prescription drug spending by $32 billion over the next decade.

“That’s adding to overall healthcare costs,” says Robert Zirkelbach, spokesman for another industry group, America’s Health Insurance Plans, and “is going to ultimately mean higher premiums for everybody.”

Many insurers are fighting back.

Express Scripts Holding Co., the largest U.S. prescription benefit management company, says more than half the insurance plans its services have policies requiring patients to pay an extra fee for staying on the brand-name drug. The fee amounts to all or at least most of the difference between the total cost for the brand name over a generic drug, enough to make use of coupons unattractive.

Many of those insurers have had such a policy for years, but with the advent of coupons for blockbusters just going off patent, more insurers are likely to institute similar policies, says Everett Neville. He’s head of pharmaceutical strategies at Express Scripts, which processes prescriptions for about 100 million Americans.

COUPON SUCCESS

Drugmakers have offered coupons for several years on brand-name drugs that don’t have generic competition. Those were meant to attract patients taking a rival brand or just starting treatment for a new condition. The coupons are usually prominent on the drug’s official website, and many Internet sites offer coupons for an array of drugs.

Now the companies are offering coupons for drugs facing generic copycats for a simple reason: In the decade through 2020, drugs with more than $110 billion in annual U.S. sales have patents expiring, according to IMS Health, a huge health-care research firm. So holding onto customers for even a few extra months can mean many millions of dollars in additional revenue.

Pfizer, the world’s largest drugmaker, started the strategy because generic competition was looming for several of its big sellers, particularly Lipitor. The cholesterol-lowering medicine had reigned for a decade as the world’s top-selling medicine ever. Sales peaked at $13 billion a year, about half in the U.S.

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