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2018 California law limits use of co-pay assistance and discount cards

December 28, 2017

Beginning January 01, 2018 patients will run into problems if they're used to using co-pay assistance and discount cards. 

 


Governor Brown signed into law a bill that prohibits, with a few exceptions, pharmaceutical manufacturers from offering co-pay assistance and discount cards if a lower-cost equivalent is covered by the patient's insurance or the active ingredient for the drug is available at a lower cost without a prescription.

 

These co-pay cards are meant to help pay down out-of-pocket insurance expenses. For example, Synthroid is a commonly prescribed synthetic thyroid medication manufactured by AbbVie; Synthroid has been available in its generic form, Levothyroxine, for many years. As such, most insurers won't cover Synthroid, and if they do the co-pay is likely going to be very high. Patients that prefer Synthroid over its generic will typically have us bill their insurance, and then bill the remaining co-pay to an AbbVie co-pay assistance card. This won't be allowed in California as of January 1, 2018.

 

There are exceptions; drugs that do not have a lower cost therapeutic equivalent can still take advantage of these co-pay cards. For example, if you use the inhaler Symbicort, for which a lower cost alternative does not yet exist, you can use your Symbicort co-pay card to bring that $80 co-pay down to $25 (for example).

 

Limited Exceptions

The new law (AB-265) prohibits pharmaceutical manufacturers from offering discounts on patients’ out-of-pocket expenses associated with their health insurance or other health care coverage, but only if one of two conditions is triggered:

 

  1. a lower cost generic drug that the FDA has designated as therapeutically equivalent to the brand name drug and that drug is covered under the individual’s health insurance plan on a lower cost-sharing tier1 ; or
     

  2. the active ingredients in the brand name drug are contained in products that are available without prescription at a lower cost, and that are not otherwise contraindicated for treatment of the condition for which the prescription drug is approved.

Even still, you may be exempt from this prohibition if you meet one of the following criteria:

  • the individual has completed applicable step therapy or prior authorization requirements for the branded prescription drug, as mandated by the individual’s health insurer;

  • such payments are required under an FDA Risk Evaluation and Mitigation Strategy (REMS) for the purpose of monitoring or facilitating the use of the prescription drug, consistent with the approved labeling of the prescription drug;

  • the discount is for a single-tablet drug regimen for the treatment of HIV/AIDS that is as effective as a multi-tablet regimen, unless the multi-tablet regimen is clinically equally effective or more effective and is more likely to result in adherence to the drug regimen;

  • the discount is not associated with an individual’s health insurance, health service plan, or other health coverage (e.g., a discount for self-pay patients); or

  • the discount is a rebate received by a state agency.

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