If the Massachusetts budget becomes law next month, the state will finally join the rest of the nation and allow consumers to use coupons to purchase prescription medicines. Both the House and Senate have approved budget amendments that would allow coupons to be redeemed to cover co-pay costs, a notion that Massachusetts Governor Deval Patrick had indicated during his 2010 re-election campaign that he supported,The Boston Herald reports.
The issue has been kicked around in Massachusetts, where a 1988 law forbids any rebate for health care purchases, for the past six years. Several patient groups have repeatedly sided with the pharmaceutical industry to argue discounting would provide needed relief to people who have trouble affording their meds. But consumer groups counter that coupons are marketing ploys designed to promote expensive meds that allow drugmakers to provide lower-cost alternatives.
Two months ago, in fact, a series of lawsuits were filed by several union health plans against eight large drugmakers and charged that, rather than save consumers money, prescription drug coupons illegally subsidize co-pays for brand-name meds. Moreover, they argue that coupons can actually increase health insurance premiums, which can cause consumers to hit benefit caps or lose coverage altogether (back story).
The debate reflects an ongoing, behind-the-scenes battle over the cost of medicines. Insurers and pharmacy benefit managers have used tiered co-pays to encourage consumers to use lower-cost generics or favored brand-name drugs that carry lower price tags. Drugmakers have fought back with coupons or co-pay cards to preserve market share. Coupons can lower co-pays for brand-name drugs to about the same cost as a generic, or simply offer a flat discount off the co-pay. This means that employers and unions that offer prescription drug coverage can pay more when coupons are used.
Massachusetts politicians, meanwhile, want their constituents to have the same options as citizens in other states. "Every other state allows their citizens to use assistance in paying for their high cost drugs,” Michael Rodrigues, a Democratic Senator said during a floor debate, the Herald reports. “Why are we denying our citizens... the ability to use these coupons?” He complained that pharmacists are directing people to Rhode Island to use coupons.
However, Senate chair of the Joint Committee on Health Care Financing Richard Moore noted during the debate that drugmakers may use a “bait and switch process” to attract consumers with coupons, but when the reduced price period ends “you get whacked with the full price” of often very expensive medications. "Our role I believe needs to be to protect and to help the consumer and if we can help the consumer get that drug at a lower cost, then fine,” he said.
And so a conference committee will have to reconcile differences between the amendments. Both versions ban coupons for brand-name drugs when a generic version is available, but the Senate plan requires discounts to remain intact, while the House version allows discounts to expire (read here), the Herald writes. According to the Senate version, drugmakers that change the pricing during the life of a prescription would be subject to a $1,000 fine.
At the same time, Moore appeared to acknowledge that discounts may cause increase costs if people take advantage of coupons and take more medication. “The cost of health care goes up because the overall cost – which is significantly larger than the co-pay as one would expect - is born by the government or the insurance companies that provide the coverage,” he said. Rodrigues countered that, while generics account for 80 percent of prescriptions filled in Massachusetts, generic alternatives do not exist for some drugs.
[UPDATE: A spokeswoman for Health Care For All, a Massachusetts advocacy group against coupons, writes us to say that coupons would increase drug costs for Massachusetts employers, consumers, unions, and state and local governments by $750 million over the next 10 years, according to a recent report by the Pharmaceutical Care Management Association (PCMA). The Group Insurance Commission also estimates that repealing the ban on drug marketing coupons could increase their prescription drug costs by $8.8 million annually.
"Massachusetts leads the nation in the cost-effective use of generic drugs, with correspondingly high prescription drug adherence rates that translate into improved health outcomes and longer-term savings for both consumers and the state. At a time when government, businesses and consumers are focused on improving health care quality and controlling health care costs, repealing the ban on prescription drug marketing coupons would undermine our progress to date," she writes. "Allowing the use of drug co-pay coupons and rebates would be a significant step backwards in our efforts at controlling the rising costs of health care and protecting consumers.”
There is merit to both arguments. Consumers, of course, are more cost conscious than ever and providing the same rights that exist in the other 49 states has appeal, especially if some Massachusetts residents are crossing state lines to fill expensive prescriptions. On the other hand, incentives for generics have been regularly adopted by insurers and pharmacy benefit managers for some time. And perhaps a court will find that coupons are illegal. What do you think?
Should Massachusetts Overturn The Coupon Ban?
- Yes (63%, 83 Votes)
- No (37%, 46 Votes)
Total Voters: 131
coupon pic thx to fontplaydotcom on flickr