Massachusetts often prides itself on being a maverick. After all, the state implemented near-universal healthcare reform in 2006, when no other state was even considering such a move. At the same time, it enforced an individual mandate, now quite the catch phrase, but relatively unheard of at the time. And it took a hard stance against pharmaceutical companies, being the only state to maintain a circa-1988 law which prohibited the use prescription drug coupons. However, with a stroke of Gov. Deval Patrick's pen, that domino has now fallen.
Included in the $32.5 billion fiscal year 2013 budget was a provision allowing pharmaceutical companies to now offer drug coupons, typically a strategy to counteract higher tier placement of branded drugs. Coupons are seen as a boon to consumers, who get some financial relief from higher copayments for a Tier 2 or Tier 3 brand. Typically, a coupon offers a flat copay discount, such as $25, with an upper limit of $100.
The practice can reduce the effectiveness of MCO programs designed to steer members to generics because the out-of-pocket cost for members decreases, while the amount the health plan pays for the drug remains the same. However, Massachusetts has a strong history of generic utilization and lawmakers want to ensure that continues, so the new coupon provision comes with caveats.
For instance, the new provision stipulates that coupons cannot be used for a branded drug if there is a generic equivalent available. Also, the provision is slated to end July 1, 2015. The budget calls for the Massachusetts Division of Health Care Finance and Policy to study the coupons? effects during that time, presenting an analysis of its findings to the state legislature by Dec. 31, 2014. This gives lawmakers the ability to extend the use of coupons if they so choose. The division's report will include an analysis of the types of drugs coupons were most frequently used for, details of any change in utilization of generic versus brand, the effect on patient adherence, and an analysis of the cost impact to beneficiaries once the coupon expires.
These measures certainly appear to be an attempt by state lawmakers to satisfy all parties while bringing Massachusetts in line with the rest of the U.S. in regard to the use of coupons. Lawmakers in favor of allowing coupons argued it was unfair for Massachusetts residents to be denied a measure readily available in other states, noting that some residents trek to Rhode Island to make use of a coupon for an expensive brand. By including a sunset provision and emphasizing generic drugs, the measure helps placate those who long lobbied against the use of coupons, including the state's most influential advocacy group, Health Care For All, the Massachusetts Association of Health Plans and the state's Group Insurance Commission, which administers state health benefits.
During the coupon bill battle, Health Care For All advocates decried coupons as little more than a marketing tool, geared to steer consumers toward expensive branded drugs and to defeat health plans? efforts to negotiate prices. Countering that argument was the Massachusetts Biotechnology Council, supporting the use of prescription drug coupons on the merits of patient access. Robert Coughlin, president and CEO of the council, said it didn't make sense for the state to mandate health insurance yet ban copayment assistance plans.
And so Massachusetts falls in lockstep with the rest of the nation on couponing. The next question will be how long that distinction lasts word on the street is that couponing bans may be gaining steam in other states. One way or another, Massachusetts seems destined to stay in the news.
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