Massachusetts Drug Discount Provision Set to Expire January 1, 2020

The Massachusetts law permitting pharmacies and pharmaceutical manufacturers to offer drug discounts to consumers is set to expire on January 1, 2020. Although legislators have pushed back this law’s expiration date several times, lawmakers are now working against the clock to prevent it from terminating altogether.

In its current form, Mass. Gen. Laws Ann. ch. 175H, § 3 allows pharmacies to provide discounts and free product vouchers to consumers in connection with pharmacy services, items, or prescription transfers. The law also allows pharmaceutical manufacturers to provide discounts, rebates, product vouchers, and other price reductions to individuals’ out-of-pocket drug expenses. Manufacturer discounts must be given to individuals through points of sale, mail-in rebates, or similar means, and may not include prescription drugs with AB rated generic equivalents, or any schedule II opioids.

The initial version of the law, passed in 2012, contained a sunset provision stating that it would automatically repeal in July 2015. This date has since been extended three times, most recently in January 2019. Of note, a 2018 amendment to the law also directed the state’s Health Policy Commission to study the use of prescription drug coupons and publish a report, expected at the end of this year. The Commission presented its preliminary findings on October 2, 2019.

Industry participants are anxiously awaiting legislative action, as a ban on coupons could affect consumers’ ability to purchase brand name drugs, which typically come with higher cost-sharing amounts than their generic equivalents. In response, lawmakers have amended the proposed Pharmaceutical Access, Costs, and Transparency (PACT) Act (SB 2397) to allow the continued usage of discounts and coupons through January 2021. As of the date of this alert, SB 2397 has passed a Senate vote, been transmitted to the House, and reprinted as SB2409.

Simone Colgan Dunlap and Leah Tinney track the progress and application of this and other prescription discount laws. For more information, please contact your Quarles & Brady Health Law attorney or:

• Simone Colgan Dunlap: (602) 229-5510 / simone.colgandunlap@quarles.com