California Lawmaker Introduces Bill to Ban Prescription Drug Coupons

California assemblyman Jim Wood, DDS, has introduced legislation that would prohibit the use of prescription drug coupons for medications with cheaper alternatives in the state, according to a press release.

The legislation is in response to drug pricing strategies by pharmaceutical companies, which allow patients to purchase medications for little to no out-of-pocket cost, while their insurance provider ultimately picks up the tab for the remaining share of the drug’s cost. While this strategy appears to save consumers money, experts say it actually ultimately burdens the health care system, by adding unnecessary expenses that lead to increased premiums throughout the entire market. 

“Drug companies provide tremendous value and have improved the quality of life to millions of people, unfortunately we have all heard the stories of individual companies that seem to care only about maximizing profits,” Dr Wood said in a press release. “Coupons may appear to help the consumer by reducing or eliminating their out-of-pocket costs but, in fact, are too often simply a marketing tool to drive patients to higher priced drugs that may not be a more effective treatment option for them, and eventually will result in an increase to their health care premiums.”

The legislation, Assembly Bill 265, would prohibit the use of coupons in California for drugs when other less expensive FDA-approved drugs are available. The press release noted that similar legislation already exists in Massachusetts and New Jersey—and that Medicare and Medicaid prohibit the use of coupons.

“There is simply no free lunch,” Dr Wood said. “Coupon use is on the rise—more than 700 drugs now offer coupons. Growth has gone from an estimated $1 billion in 2010 to $7 billion in 2015. The negative implications to health care costs and the consumer have yet to be fully realized and we have to put a halt to these practices when they are not in the consumer’s best long-term interest.” —David Costill