Insurance companies use co-payments when they negotiate with the makers of competing brand-name drugs. When your insurance company negotiates with a drug company to get a good price, its main leverage is the co-payment. Imagine two similar drugs for the same ailment. The insurance company can offer a drug maker lots of business if it steers patients to buy its product. The promise of all that business gives the drugmakers an incentive to offer a good discount.

In that situation, an insurance company might charge a $10 co-payment for a $300 drug and a $50 co-payment for its competitor, which costs $500. A coupon for the pricier drug will make it less expensive for the patient at the drugstore, but won’t change what each drug is costing the insurance company. If coupons cause patients to prefer the $500 drug, then the maker of the cheaper drug will have no incentive to keep offering a better price, and both drugs might end up costing $500.

Steve Miller, the chief medical officer at Express Scripts, which negotiates drug benefits for health plans around the country, said coupons have forced his company to sometimes refuse to cover expensive drugs at all, since the coupons are designed to work only when the insurance company picks up part of the tab. “It’s one of these things where what superficially sounds like a good thing — giving patients discounts — actually in the long haul ends up costing patients more money,” he said.

The federal government bans the use of coupons when buying drugs through Medicare health insurance. Massachusetts also bans the practice for drugs with a generic equivalent. Those bans created what economists call a natural experiment and allowed the researchers to measure how much of a difference coupons made. They looked at a database of health claims for everyone employed by a New Hampshire-based company, then compared the drugs bought by customers in New Hampshire, where coupons were allowed, with those in Massachusetts, where they are not.

To make sure the differences didn’t reflect some other difference between the states, they also looked at Medicare recipients in both states, and found similar drug-buying habits among people in both places.

Professor Dafny and her colleagues suggest that more states may want to follow the lead of Massachusetts in banning the coupons. Some individual patients would end up paying more for drugs, but average costs would probably go down. She and her co-authors also warned that the practice of offering co-payment discounts might also start spreading to doctors’ offices and hospitals, and could cause similar distortions in negotiations between health care providers and health insurance companies.