As we summarized in a recent alert, Massachusetts has amended its anti-kickback law effective July 1, 2012 to permit pharmaceutical and biological product manufacturers to provide certain discounts, rebates, product vouchers, or other cost reductions (“coupons”) to consumers in the state, so long as specified conditions are met. (See Sections 128-130 of House Bill 4200, lines 1429-1461.) As manufacturers consider whether to provide such coupons under the law, we have highlighted certain factors they may want to consider.

Analysis of coupons’ impact

To evaluate the effects that coupons to consumers may have on healthcare costs in the state, the legislature mandated that the Massachusetts Division of Health Care Finance and Policy conduct an analysis of the impact of discounts, rebates, product vouchers, or other reduction in costs from August 1, 2012 to July 31, 2014. (See Section 201 of House Bill 4200, lines 2510-2535.) To aid that analysis, the statute gives the Division authority to require manufacturers of prescription drugs and biologicals to “report on the number and types of coupons which such manufacturers have issued and which have been redeemed in the {state}.” It is not yet clear what specific information the Division will request from manufacturers, when it might require that information to be submitted, or in what format it will require submission.

The Division’s analysis must include:

  • the total number and value of coupons and discounts redeemed in the state;
  • an analysis of the types of prescription drugs and biological products for which coupons and discounts were most frequently redeemed;
  • a comparison of any change in utilization of generic versus brand-name prescription drugs;
  • a comparison of any change in utilization among therapeutically equivalent brand name drugs;
  • the effect on patient adherence to prescribed drugs;
  • patient access to innovative therapies;
  • an analysis of the effect of availability of the coupons or discounts upon renewals;
  • an analysis of the cost impact to consumers upon expiration of the coupon or discount;
  • an analysis of the impact on commercial health insurance premiums;
  • an analysis of the impact on any healthcare cost containment goals adopted by the state; and
  • an analysis of the impact on premiums associated with the group insurance commission.

Confidentiality of coupon information

It is not clear whether the Division’s analysis would identify particular drugs or manufacturers by name. In addition, while it directs the Division to file a report of its analysis with the legislature, the statute does not explicitly provide for the confidentiality of any manufacturer information provided to the Division pursuant to its authority to require disclosure.

Sunset of provisions

The provisions permitting coupons are currently set to expire on July 1, 2015 unless the legislature takes action to extend them. (See Section 226 of House Bill 4200, line 2785.) The Division’s cost analysis is likely to have a significant impact on that decision.

Manufacturers who decide to provide coupons in Massachusetts should carefully consider these issues as they implement their coupon programs and policies.