California’s Copay Coupon Bill Stirs Up Panic—Here’s What Pharmaceutical Brand Teams Need To Know.

California’s Copay Coupon Bill Stirs Up Panic—Here’s What Pharmaceutical Brand Teams Need To Know.

 Exploring the Price of Medication.jpg

Here’s everything your company needs to know in order to stay in compliance with AB-265, California’s new Copay Coupon Bill.

What is the California Copay Coupon Bill?

 The intent of the California Copay Coupon Bill (AB-265), which goes into effect January 2018, is to encourage generic use by limiting copay coupons and other discounting strategies for branded prescription drugs. Here’s a quick summary:

 Manufacturers cannot provide a discount (e.g. coupon) to a patient’s OOP if a therapeutically equivalent, lower cost generic drug is covered by the patient’s insurance or a FDA-approved non-prescription drug with the same active ingredient is available for lower cost. Note, this does not apply until the first designated therapeutically equivalent has been available nationally for three months.


Will it Affect my Business?

Many pharma companies will need to make some changes in the new year in order to stay compliant in the state of California. If your brand does not have a therapeutic equivalent or A/B rated generic equivalent (as defined by the FDA) however, you may not be affected.


How Can I Stay Compliant?


 1. Change the rules of your coupon program

 Ensure that coupons don’t continue to get processed for patients paying via insurance.

 2. Leverage Loyalty

Many of your patients value your brand and won’t want to switch to generics, especially if they have financial assistance options. For example, consider leveraging loyal patients by providing them a discount as cash pay consumers.

 3. Build momentum before LOE

In the 6-12 months prior to the generic hitting the shelves, consider incentivizing patients to move to 90-day scripts.  

 4. Engage with your partners in the supply chain

The new legislation impacts everyone – pharmacies, prescribers, PBMs and patients alike. Make sure to engage all parties to ensure compliance and identify novel opportunities to manage the new market dynamic.


Are there any Exceptions to the Rule?

 Yes. The bill does not apply in the following instances:

  • If the drug is required under a FDA Risk Evaluation and Mitigation Strategy (REMS)
  • With a single-tablet drug regimen for treatment or prevention of HIV, unless a clinically equivalent multi-tablet regimen has been shown to improve adherence
  • If the patient has completed any prior authorization/step therapy required by their insurance
  • If the discount is not associated with patient’s insurance (i.e. cash pay)
  • If rebates are received by a state agency

 Additionally, manufacturers can still offer free drugs (i.e. free to both patient and insurer). Although this bill applies to manufacturer-sponsored programs, it does not apply to any independent charitable patient assistant programs


Will Every State Follow Suit?

 While only one other state has this type of bill in place currently, there is always the possibility that additional states will follow suit in an effort to contain costs. Regardless of whether legislators do continue down this path, Truveris can help you navigate the ever-changing healthcare landscape and define patient access strategies to make and keep your brand successful.

 Do you have questions about staying compliant with California’s Copay Coupon Bill?

 Email us for help.

Topics: Trends, Insights & Analysis, Pharmaceutical Manufacturers, Prescription Drug News & Regulations - Pharma

Posted by

Jonathan Lanznar

Jonathan Lanznar is a member of Truveris’ Life Sciences team. In his role as Director, Jon leads the company’s efforts in delivering patient access programs for pharmaceutical companies. Jon has a BA from Emory University and an MBA in Healthcare Management from the Wharton School at the University of Pennsylvania.