Massachusetts overturns co-pay ban

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Tom Sullivan
Tom Sullivan

After three years of wrangling, drug companies can again offer co-pay coupons in Massachusetts.

Governor Deval Patrick put the changes in place when he signed the state's 2013 budget July 8. The co-pay card ban was undone by narrowing a broad 1988 law that barred kickbacks.

“The drug coupons were always seen as falling under this prohibition,” Wells Wilkinson, an attorney with the interest group Community Catalyst, explained. “The legislature left that law intact, but then carved out an exception for co-pay coupons.”

Medicaid and Medicare patients will still be barred from using the discount cards, because the federal programs forbid them.

The Pharmaceutical Care Management Association has been among the groups against co-pay cards, and a 2011 report from the group indicated that overturning the Massachusetts ban would increase the state's prescription costs by $750 million over ten years. Spokesman Charles Cote told MM&M those numbers still hold, and said it was too early to determine what, if any steps the organization would take regarding the new Massachusetts policy.

“They have really kind of set the state up for the increased costs related to the marketing of extensive brand name drugs through these co-pay coupons” Wilkinson said.

“The problem with that line of reasoning is that you're acting as if there's no end benefit for those patients,” Thomas Sullivan, president of the medical education company, Rockpointe, told MM&M. Sullivan said the cards have a clear benefit: patients take their medications and live healthier lives. “All they're focused on is the potential cost,” he added.

This doesn't mean the battle over retail discounts is over. Wilkinson is an attorney for a multi-party lawsuit against eight drug companies which was filed on behalf of groups including the AFSCME District Council 37 Health & Security Plan Trust and the Sergeants Benevolent Association. This lawsuit doesn't rely on Massachusetts' kickback law. Instead, it alleges that the coupons are a form of fraud because they hide the point-of-purchase cost from insurers. This undermines healthcare plans that are calibrated to contain costs, which is another point of contention.

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