Codey introduces bill to ban coupons for prescription drugs when lower-cost alternatives exist

TRENTON, NJ — State Sen. Richard Codey recently introduced legislation to ban the use of manufacturer coupons and other discount offers for certain prescription drugs when a lower-cost alternative, such as generic versions of the drug, exists. The bill would address a practice often used by manufacturers to drive consumers to their products with a discount offer, but that actually increases costs for customers — as well as health care costs globally — as it deters the use of the cheaper, generic equivalent, the releases from New Jersey Senate Democrats stated.

“This is a scheme used by drug manufacturers to entice consumers into using their products. Unfortunately, it doesn’t have the ‘advertised’ effect of cutting costs,” Codey said in the release. “While coupons may provide a discount on out-of-pocket expenses, they do not bring down the total cost of the medication and actually can have the effect of increasing health insurance costs that are ultimately passed on to consumers. This is completely counter to the goal of reducing the overall cost of health care for residents in this state and across the country. Restricting these offers when a generic equivalent exists will benefit residents over the long-term and will work to protect against increasing costs in the health care system.”

Though the bill includes some exceptions, it would prohibit manufacturers from offering discounts, rebates, product vouchers or other reductions in an individual’s out-of-pocket expenses, including copayments and deductibles, for prescription drug or biological products if a lower-cost alternative is available that has been designated by the U.S. Food and Drug Administration as therapeutically equivalent to or interchangeable with the manufacturer’s product. The bill includes some exemptions to the restriction.