Every month, Bob Higson, a Framingham mechanic, has paid $300 out of his own pocket in copayments for arthritis medication that quiets his aching joints — and lets him keep working. Now, a new Massachusetts law will allow him to cover his costs by using pharmaceutical company coupons to get discounts on prescription drugs.
“As soon as the [law] was passed,” he said, “I signed up for the discount.”
Supporters argue the measure will make life-altering drugs more affordable for patients whose conditions can’t be treated with less expensive generic or over-the-counter medications.
But some consumer advocates and analysts say the coupons could drive up health care costs at the very time state lawmakers are striving to rein them in. They say discounts will encourage use of brand-name drugs instead of less expensive alternatives, with one estimate showing drug costs for employers, unions, and health plans in Massachusetts could rise by hundreds of millions of dollars over the next decade as a result.
A longstanding ban against the coupons in Massachusetts — the last state to prohibit them — was lifted as part of the state budget signed by Governor Deval Patrick on July 8.
State Senator Richard Moore, an Uxbridge Democrat who has led Senate efforts to control health costs, warned that the coupons will undercut legislative efforts to slow the rise in medical costs.
“We are trying to bring health costs in line with the costs of everything else so it’s affordable to people, and this weakens the things we can do to help contain those costs,” Moore said.
Patients covered by Medicare and Medicaid are still barred from using the coupons, because federal regulators consider them illegal kickbacks.
Patients with private insurance get the discount, but their health plans don’t. That means the companies continue to pay their full share of the bill. Those costs ultimately drive up health care spending for everyone, critics say.
One study estimated at least 100 million prescriptions annually are filled in the United States using coupons.
For Higson, hobbled by psoriatic arthritis for nearly a third of his life, generic anti-inflammatory drugs just didn’t work. The Massachusetts law prohibits use of the coupons if a generic medication is available, so for him the availability of coupons is a clear benefit.
“If I could get a generic equivalent, I would take it,” said the 45 year old, who learned about the coupon law from his physician. Higson had rationed his medication when he was laid off for several months earlier this year, worrying his doctor.
Some doctors lobbied for the coupons, saying that patients often forgo their medications if they cannot afford them and wind up with more costly health problems.
“A lot of our [multiple sclerosis] patients have $1,000-a- month copays, so we really needed the coupons to help these patients because a lot of them were not taking their medicines,” said Dr. Linda Buchwald, who leads the neurology department at Mount Auburn Hospital in Cambridge. “I had one change his state of residence before the ban was lifted to be able to get the coupons in Rhode Island.”
Representative Steven Walsh, a Lynn Democrat who chairs the Legislature’s Joint Committee on Health Care Financing and leads House efforts to tamp down health costs, supported lifting the ban, but he worries that patients could have to cover expensive copayments themselves when the coupons expire.
Still, he said, he believes it is wrong to deny patients access to the coupons, even for a limited time. “To not allow families to get coupons ... for life-saving drugs seems pretty Draconian,” Walsh said.
Even though coupons are prohibited if a generic is available, opponents predict that the discounts will still exacerbate unnecessary spending. Consumers, they say, will select expensive brand names even though other drugs may offer similar relief at a lower price.
Wells Wilkinson, staff attorney for Boston-based Community Catalyst, a national consumer health advocacy organization, said his group found that the coupons, by substantially defraying copayments for brand-name drugs, can make those medications more affordable than generics or over-the-counter equivalents.
Wilkinson found, for instance, that coupons made the copayment for the acid reflux drug Nexium cheaper than what patients paid for Prilosec, an over-the-counter treatment.
AstraZeneca PLC, which makes Nexium, offers a discount coupon that lowers a patient’s monthly copayment from roughly $50, which is what many health plans charge for top-tier brand-name medications, to $18. The typical retail price for the over-the-counter version of Prilosec is $22 to $26.
The coupon legislation was opposed by Massachusetts consumer groups Health Care for All and Masspirg, along with a consortium of health insurers. They pointed to a 2011 study by the Pharmaceutical Care Management Association, which represents companies that administer pharmacy benefits. That study estimated discount coupons will increase prescription drug costs nationally by $32 billion over the next decade if current trends continue. In Massachusetts, the study estimated, health care costs would rise $750 million in the same period with the lifting of the coupon ban.
But the Pharmaceutical Research and Manufacturers of America, a trade group that represents drug companies, said in a statement that the coupons play a “valuable role generating better health outcomes and reducing the use of avoidable and costly medical care.”
The trade group, along with other coupon backers, said the discounts eliminate barriers to care and increase the likelihood that patients adhere to drug regimens.
Two key requirements added to the law will allow legislators to gauge whether coupons increase health care costs, Walsh said, and if the practice should be revoked.
The law expires in 2015 unless it is renewed. Under it, the state must conduct a detailed analysis to determine if health care costs rise after the lifting of the coupon ban. The review will examine whether patients are more faithful about taking their medications and whether there are changes in the use of generic, versus brand-name, drugs.
Eliminating the coupon ban was just one example of the drug industry’s success on Beacon Hill this year. Another measure loosened a 2008 ban on gift-giving from pharmaceutical companies to doctors .
Drugmakers will now be allowed to pay for “modest” restaurant meals for physicians, as long as they are part of an informational briefing. The state Department of Public Health will have to define the meaning of “modest,” and drug companies will also have to report their spending to the state.