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Massachusetts amends anti-kickback law to permit certain prescription drug coupons

Sara A. Kraner

Isabel Dunst

Andrew Furlow

12 July 2012
Massachusetts has amended its anti-kickback law to permit manufacturers to provide certain prescription drug coupons.  The state’s anti-kickback statute contains a broad prohibition that formerly precluded manufacturers from providing any type of cost reduction to privately-insured state residents.  As of this week, however, it contains an exception that allows manufacturers to provide discounts, rebates, product vouchers, or other reductions in an individual’s out-of-pocket expenses (including copayment and deductibles) on a biological or prescription drug, so long as that cost reduction is provided directly or electronically to the individual or through a point of sale or mail-in rebate, or through similar means.
Massachusetts amends anti-kickback law to permit certain prescription drug coupons

The new exception is subject to restrictions.  Manufacturers may not exclude or favor any pharmacy in the redemption of the discount, rebate, voucher, or other reduction of out-of-pocket expenses, and manufacturers may not offer such an expense reduction for any prescription drug that has an AB-rated generic equivalent. 

The law also permits retail pharmacies to provide discounts or free product vouchers to consumers in connection with a pharmacy service, item, or prescription transfer offer. 

These amendments represent a significant change for the manufacturers doing business in Massachusetts.  Manufacturers may now provide privately-insured state residents with coupons, co-pay cards, vouchers, and other cost-sharing reductions for their prescription drugs and biologicals so long as the statutory restrictions are followed.  Of course, the federal anti-kickback law prohibitions still apply to Massachusetts residents enrolled in Medicare, Medicaid, and other federal health care programs.

For more information, please reference our client alert.

Sara A. Kraner

Isabel Dunst

Andrew Furlow

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