By Jarrell Cook, Associate Policy Director
AB 265, by Assembly Member Jim Wood (D-Healdsburg) which prohibits pharmaceutical manufacturers from offering Californians “any discount, rebate, product voucher, or other reduction” in their copayment, deductible, or other out-of-pocket expense if a lower cost alternative is available will be heard in the Assembly Health Committee on April 18th at 1:30 p.m.
The goal of the measure is to reduce the cost of health insurance, which the author believes is, in part, the result of drug copay coupons being used as a marketing tool to drive patients to higher-priced drugs. These coupons have become an issue in the politically charged fight to reduce healthcare costs by targeting the pharmaceutical manufacturing without holistically addressing the larger healthcare system and insurance industry.
Drug copay coupons are pharmaceutical manufacturer programs that allow pharmacies to bill all or part of the drug consumer’s portion of the cost to the drug manufacturer instead of the patient. Studies have shown that reducing patients out of pocket expenses – as copay coupons do – makes patients more likely to adhere to their treatment programs, improving outcomes and reducing total healthcare costs overall.
While copay coupons provide benefits to patients, insurers assert that the prices they pay to cover brand name drugs forces them to raise premiums to pass that expense to the consumer. However, this is far from an inevitability; insurance payers are making a decision to protect their profits – which often range in the billions – rather than absorb the cost.
Assembly Member Wood’s bill targets pharmaceutical manufacturers as easy scapegoats, but it is important that legislators address the issue of healthcare affordability by seeking to thoughtfully partner with, not punish, healthcare providers and medical innovators to improve outcomes for patients.
CMTA opposes AB 265 and is working to make the case for pharmaceutical manufacturers in California. For more information, please contact Jarrell Cook, Associate Policy Director for Governmental Affairs at firstname.lastname@example.org or by phone 916-498-3356.
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