Exception to the law allows certain discounts or
rebates on prescription drugs.
On July 8, Massachusetts Governor Deval Patrick signed into law
the state's FY 2013 budget, which included a change to the
Massachusetts anti-kickback law, Mass. Gen. Laws ch. 175H, §
3.1 The state's anti-kickback law, first passed in
1988, is one of the strictest in the nation, prohibiting any
remuneration to induce individuals to purchase or lease any good or
service for which payment may be made by a healthcare insurer. As
of the new law's July 1, 2012, effective date, an exception to
the anti-kickback law will be granted for certain discounts or
rebates on prescription drugs. Pharmaceutical manufacturers may
only use this exception to offer discounts or rebates on drugs that
do not have an AB-rated generic equivalent. Furthermore, the
discounts or rebates offered cannot favor any particular pharmacy.
The legislature included a sunset date of July 1, 2015, for the
kickback law change; after this date, barring a law to extend it,
the new exception will expire.
Doctors, pharmacists, and patients support the new law, which
will result in savings for patients who purchase certain brand-name
drugs. Critics, including health insurers and the Massachusetts
Public Interest Research Group, argue that the change will raise
healthcare costs. Notably, Massachusetts took this course of action
just as the use of patient assistance and coinsurance support
programs and discount cards have become more controversial. There
has been a spate of private lawsuits challenging whether these
programs interfere with the relationships between pharmacy benefit
managers and their customers. Manufacturers giving their patient
assistance and coinsurance support programs a fresh look in light
of the change in law may wish to consider whether other aspects of
their policies also merit further consideration due to the current
1 For other changes to the budget affecting the
healthcare industry, see our July 11, 2012, LawFlash,
"Massachusetts Adopts Revisions to Health Care Practitioner
'Gift Ban' Law," available online
Copyright 2012. Morgan, Lewis & Bockius LLP. All Rights
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