Massachusetts & Drug Coupons: To Ban, or Not to Ban, that is the Question

The Massachusetts law that permits the use of pharmaceutical manufacturer drug coupons is on life support. The law was set to repeal on July 1, but it was extended to January 1, 2020 thanks to an emergency law that was enacted in 2018 and approved by the governor on January 2, 2019.

The emergency law also contained a provision that requires an analysis and report on the effect of discounts, rebates, product vouchers and other reductions for prescription drugs and biologics on pharmaceutical spending and health care costs in Massachusetts.

This post briefly explains the current law, the sunset provisions, and the study that will be conducted.

Current Law & its Sunset Provisions

The current law allows pharmaceutical manufacturers to offer any discount, rebate, product voucher or other reduction (collectively “discounts”) in an individual’s out-of-pocket expenses, including co-payments and deductibles, for prescription drugs. But it prohibits manufacturers from offering discounts for any prescription drug that has an AB rated generic equivalent as determined by the United States Food and Drug Administration or for any prescription drug that is a schedule II opioid.

Since the law’s inception in 2012 (see Section 130), the law contained a sunset provision, which is a clause that repeals the law on a specified date. The original date of repeal was July 1, 2015 (see Sections 131 & 226; link above). The date would be extended numerous times. In 2014, “2015” was replaced with “2017” (see Section 2). Two years later, “2017” was replaced with “2019” (see Section 129).

There was a pattern of extending the law for an additional two years, but that changed in 2018. The law was given 6 months to live by setting the date of repeal to January 1, 2020 (see Section 1), but it also contained a provision that requires the Health Policy Commission to conduct an analysis and issue a report on the use of drug coupons (see Section 2; link above).

The Drug Coupon Study

The Massachusetts Health Policy Commission (“HPC”) “is an independent state agency charged with monitoring health care spending growth in Massachusetts and providing data-driven policy recommendations regarding health care delivery and payment system reform.” As explained above, HPC is responsible for conducting the analysis and issuing a report that will be made publicly available.

The study must include, but not be limited to:

1. The total number coupons and discounts redeemed in the commonwealth;
2. The total value of coupons and discounts redeemed in the commonwealth;
3. An analysis of the types of biological products and prescription drugs for which coupons and discounts were most frequently redeemed;
4. A comparison of any change in utilization of generic versus brand name prescription drugs;
5. A comparison of any change in utilization among therapeutically-equivalent brand name drugs;
6. The effect on patient adherence to prescribed drugs;
7. Patient access to innovative therapies;
8. An analysis of the availability of the coupons or discounts upon renewals;
9. An analysis of the cost impact to consumers upon expiration of the coupon or discount;
10. An analysis of the impact on commercial health insurance premiums, attributed to both employers and individuals;
11. An analysis of the impact on any health care cost containment goals adopted by the commonwealth; and
12. An analysis of the impact on prescription drug costs and premiums for health plans offered by the group insurance commission.

HPC was also granted the authority to “require manufacturers of biological products and prescription drugs to report on the number and types of coupons that such manufacturers have issued and which have been redeemed in the commonwealth.” It is unclear if HCP plans to exercise this authority.

The May 2019 HPC Notice of Meeting and Agenda shows that the “Prescription Drug Coupon Study” was a topic of discussion. Slides for the meeting have been released and provide an overview of the study, including a timeline (report expected in September), and additional information (see pp. 45-51).

A public listening session will be held on Tuesday, May 21, 2019 at 10:00 AM at the HPC (50 Milk Street, 8^th floor, Boston, MA 02109).