California Law Banning Copay Coupons Didn’t Boost Generic Drug Use, Study Finds

A 2017 California law that banned drugmaker copay coupons failed to increase the use of generic drugs, according to a study from Brigham and Women’s Hospital in Boston.

The study, published June 15 in JAMA, found that the law did not meet its goal to boost use of generic drugs instead of patients’ relying on copay coupons for expensive, brand-name drugs, within the first year of it being implemented.

Drugmakers sometimes offer copay coupons to help commercially insured patients afford their out-of-pocket costs, but the coupons increase overall drug spending by encouraging the use of brand-name drugs, which are more expensive than generics, according to the researchers.

Several other states besides California are considering restricting coupon use to boost generic drug use and lower overall drug spend, the researchers said. The California law prohibits the use of copay coupons for brand-name drugs that have generic alternatives.

The researchers looked at how generic drug use changed in California compared to surrounding states after the law took effect in January 2018. By looking at 1.26 million total claims, the study found that for the first year after the ban took effect, there was a nonsignificant increase of 0.42 percent in the use of generic drugs in California compared to surrounding states.

The study’s limitations include that only 15 coupon-covered drugs with recent generic competition were assessed, and the effects of the law may have increased beyond its first year, especially if pharmacies were slow to change their practices. The data set also included about 10 percent of California’s commercially insured population, but may not be representative, the authors wrote.


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