Massachusetts backs down its gift-ban and co-pay coupon rules

Defying protests from the American Medical Student Assn. and healthcare public-interest groups in the state, Governor Deval Patrick signed Massachusett’s 2013 fiscal budget into law on July 8. The omnibus bill included two provisions that rescind prior regulations: Pharma reps will now be able to offer “modest” meal compensation to prescribers. Other parts of the state’s code of conduct apparently still stand, and as the federal aggregate-spending rules come into force in early 2013, the pharma industry will still be obligated to report expenditures to individual doctors and other healthcare providers. Attempts had been made by the state legislature to overturn this ban in the past two years; this time, it stuck.

The other change possibly has farther-reaching consequences: Massachusetts will now allow patients to use co-pay coupons to offset the cost of co-pays when filling prescriptions; it had been the only state to maintain a ban. A study sponsored by the Pharmaceutical Care Management Assn. last fall had estimated an extra $750 million cost to the state over the next 10 years if co-pay coupons were allowed. The conclusions of the PCMA study have been questioned; while PCMA, a critic of co-pay programs, stressed that the coupons are being used to discourage switching to generics (which generally have low or no co-pay requirement), other studies have shown that the main effect of the coupons is moving high-tier branded products to lower tiers—a branded-vs.-branded faceoff. Industry estimates of how much money is targeted at co-pay assistance range from $3 billion to $6 billion nationally. This money, in turn, competes against the rebates or discounts that the industry offers drug-purchasing organizations and insurers—and that figure is estimated at $60-$80 billion.