A California law that banned coupons for brand-name prescription drugs failed to significantly boost greater use of cheaper generics during its first year, according to a new analysis.
The law, which went into effect in January 2018, was one of many gambits by state officials to control the rising cost of prescription drugs. Coupons made an attractive target. Drug makers argue that they lower out-of-pocket expenses for consumers, but critics say coupons are slick marketing tools used to promote higher-cost medicines and eventually, cost the overall health system more money.
In fact, experts say coupons are designed to contravene cost-saving measures imposed by health insurers. For instance, health plans impose higher cost-sharing mechanisms — in the form of higher co-pays — for pricier brand-name drugs than lower-cost generic alternatives. So California lawmakers eliminated coupon use for expensive brand-name drugs, but only when generic drugs are available.
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