Prescription discount card marketing rules

Prescription discount cards turn up at pharmacy counters, in practice waiting rooms, on clinic websites and in patient emails. A patient without drug coverage, or with a high deductible, may pay less for a prescription with one. That makes a card look like an easy thing to hand out or link to. It also raises questions a practice or pharmacy should answer before its name goes next to a card offer. Is the card insurance? Can the sign say “save up to” a number? Is a “free card” free? What should Medicare patients be told? And what if the card company offers to pay the practice or pharmacy for handing cards out?

Two related topics have their own guides and are not repeated here. Rewards, copay waivers, refill reminders and ad platform rules for pharmacies are covered in our independent pharmacy marketing guide. Advertising a practice’s own cash prices, including the FTC guides on bait advertising and on the word “free”, is covered in our guide to advertising cash prices. This guide covers what is specific to promoting a discount card or a discount plan that someone else runs.

This is general information, not legal or pharmacy advice. Sources cited were checked on October 30, 2026: Section 5 of the FTC Act (15 U.S.C. 45), the FTC consumer page on spotting health insurance scams and medical discount plans, FTC press releases of August 11, 2010, June 29, 2012 and November 6, 2023, the Medicare.gov page on weight loss drugs, the federal anti-kickback statute (42 U.S.C. 1320a-7b) and the HIPAA Privacy Rule definitions and authorization rules (45 CFR 164.501 and 164.508). Discount plan licensing, fee splitting and pharmacy practice rules are set state by state. Ask your counsel and your state boards before you sign a card agreement or publish card copy.

What a discount card is, and what it is not

The FTC describes medical discount plans, also called discount health care programs, as plans where a person pays for discounts on specific services or products from a list of participating providers, and it says these plans are not insurance and are not a substitute for health insurance. The FTC page adds that a person interested in a plan should check whether their own providers participate, should get the details in writing before signing up, and should know that states can require medical discount programs to be licensed or registered, with the state insurance commissioner’s office as the place to ask.

A prescription discount card is a narrower product: it gives a price at participating pharmacies for prescriptions bought outside insurance. Some cards charge nothing to the patient and some are part of a paid membership. Either way, the FTC point holds. The card is not coverage, and copy that blurs that line is where the trouble starts.

For a practice or pharmacy that puts a card on its counter, its website or its emails, that leads to a short set of facts every piece of card copy should make clear:

The card is a discount, not insurance, and not a substitute for insurance.
The price depends on the drug, the dose, the quantity and the pharmacy, and it can change.
The patient can compare the card price with their insurance price and use whichever is lower, where the plan and the pharmacy allow it.
Whether there is any fee, membership or sign-up step, and what personal information the card company collects.
Who runs the card. The practice or pharmacy is not the card company, unless it is.

Enforcement history: discount plans sold as insurance

The FTC and the states have acted against discount plans marketed as insurance. In an August 11, 2010 press release, the FTC announced three federal cases against companies it charged with deceptively marketing medical discount plans, and said attorneys general and insurance commissioners in 24 states had filed 54 enforcement actions. In one of those cases, the FTC alleged that telemarketers claimed the plan worked closely with major insurers, was widely accepted by doctors and pharmacies, and would save consumers up to a stated percentage on medical expenses. The release also describes a consumer who allegedly found the discounted prescription price was higher than the price paid without the plan.

In a November 6, 2023 release, the FTC announced refunds to consumers in that case and repeated the allegation that the plans were pitched as being as widely accepted, and as saving as much, as legitimate health insurance. These are allegations and settlements described by the FTC, not findings about any card on the market today. They show what regulators look at: an insurance impression, acceptance claims and savings numbers.

A practice or pharmacy is not a telemarketer. But a sign, page or email under a practice’s name that repeats a card company’s claims is the practice’s claim too, so the same questions apply.

“Save up to” claims

Section 5 of the FTC Act, 15 U.S.C. 45, makes unfair or deceptive acts or practices in commerce unlawful, and a savings figure is a claim like any other. On June 29, 2012, the FTC released a study of how consumers read “up to” claims in ads. The FTC said the study indicated that consumers are likely to believe they will get the maximum “up to” result, and that it reinforced the FTC’s view that advertisers using these claims should be able to substantiate that consumers are likely to achieve the maximum results promised under normal circumstances. The FTC consumer page on medical discount plans tells consumers to avoid “up to” discounts and warns that the savings can be less than promised once fees are added.

For a card sign or web page, that points to a few rules of thumb:

Do not repeat a card company’s “save up to” figure unless the practice has seen the substantiation and it fits the patients who will read the sign. In practice, it is simpler to leave the number out.
Do not say the card beats insurance, or that it is the lowest price in town.
Do not show a single example drug price as if it applies to every prescription.
Do not say a card is accepted everywhere. Acceptance depends on the pharmacy, and the FTC page tells consumers to check.

Phrases that need rewriting:

“Save up to [percentage] on every prescription.” Rewrite as “Ask us to compare the card price with your insurance price.”
“Works like insurance.” Rewrite as “This is a discount card, not insurance.”
“Accepted at all pharmacies.” Rewrite as “Check the card’s pharmacy list or ask the pharmacy.”
“The lowest price, promised.” Remove it.

“Free card” and sign-up copy

A card that costs nothing to pick up can still come with conditions: a sign-up form, an app download, a text message list, or a paid tier offered later. If the copy says “free”, the conditions should sit next to the word, not on a separate page. Our cash prices guide covers the FTC guide on the word “free” in more detail.

Sign-up copy is also where the patient’s data goes to someone else. If the card requires a form, the patient is giving their details to the card company, not to the practice. Say so, and link to the card company’s own privacy notice rather than describing it in your words.

Medicare patients: the discount does not count toward their plan

Medicare.gov says, on its page about weight loss drugs, that discount cards are not considered creditable coverage, and that when someone uses one instead of their Medicare plan to buy drugs, the purchase does not count toward their Medicare deductible or out-of-pocket maximum. The same page tells people to compare a discount price with what they pay under their plan. Manufacturer copay coupons are a different product with their own federal program limits; see our guide to specialty pharmacy and patient support program marketing.

That is a fact Medicare patients should hear before they pick up a card. A short line on the sign or page does it: “If you have Medicare drug coverage, a purchase made with a discount card instead of your plan does not count toward your plan’s deductible or out-of-pocket limit. Compare both prices first.” Link to the Medicare.gov page rather than paraphrasing plan rules in your own words.

Gifts and rewards offered to patients covered by Medicare or Medicaid raise a separate question under the beneficiary inducement law. That topic is covered in our independent pharmacy marketing guide and not repeated here.

When the card company offers to pay the practice or pharmacy

Card programs are paid for somehow. Some offer practices, pharmacies or their staff a fee for distributing cards, a share of what the card company earns when a card is used, or marketing support. Before accepting any of that, three sets of rules come into view.

The federal anti-kickback statute, 42 U.S.C. 1320a-7b(b), makes it a crime to knowingly and willfully offer, pay, solicit or receive remuneration to induce or reward referrals of items or services paid for in whole or in part under a federal health care program, or to induce or reward arranging for or recommending them. Whether a given card arrangement touches federal program business depends on the facts, including which patients are steered and how the money flows. That is a question for health care counsel before signing, not after.

State law adds its own layer. Fee splitting, pharmacy practice and discount plan rules are set state by state, and some pharmacy and medical boards address payments tied to patient referrals. Check with your state boards.

HIPAA adds a third. Under 45 CFR 164.501, marketing means a communication about a product or service that encourages recipients to purchase or use it. Under 45 CFR 164.508(a)(3), a covered entity needs a patient’s authorization to use or disclose protected health information for marketing, with narrow exceptions, and if the marketing involves financial remuneration to the covered entity from a third party, the authorization must say so. A practice or pharmacy that is paid by a card company to send card offers to its own patients using their records is in that territory. Our HIPAA marketing rules guide covers the definitions and exceptions in more detail.

A safe default: a practice or pharmacy that wants to tell patients about discount cards can do it without taking money from any card company, and can describe more than one option without favoring a sponsor. Our guide to referral rules covers referral payments in general.

Illustration: two counter signs for the same card

Illustration only, with no real company or price. Sign A says: “No insurance? Save up to [percentage] on every prescription with this FREE card. Accepted everywhere. Better than insurance.” Every line on it is a claim the practice would have to support, and two of them describe the card as something like coverage.

Sign B says: “Paying out of pocket for a prescription? A discount card may lower the price at participating pharmacies. It is not insurance. Prices vary by drug, dose and pharmacy, so ask us to compare the card price with your insurance price. If you have Medicare drug coverage, a card purchase does not count toward your plan’s deductible or out-of-pocket limit. The card is run by [card company], which collects the details you give it; see its privacy notice. [Practice name] does not receive payment for this card.” The last sentence is only true if it is true, which is the point of writing it down.

Checklist before a card goes on the counter or the website

The copy says the card is not insurance and not a substitute for insurance.
No “save up to” figure, unless the practice has seen and kept the substantiation.
No “accepted everywhere”, “lowest price” or “better than insurance” wording.
Any fee, membership or sign-up step sits next to the word “free”.
The card company is named as the operator and its privacy notice is linked.
A Medicare line links to the Medicare.gov page.
Any payment from a card company has been reviewed by health care counsel under 42 U.S.C. 1320a-7b(b) and state law before it is accepted.
No card offers sent to patients from their records in exchange for payment without a HIPAA authorization that discloses the payment.
Staff have a one-line answer when a patient asks whether the card is insurance.

How we help

We build websites, local search, Google Ads and AI front desk tools for independent practices and health businesses, including pharmacies and dental practices. For a practice or pharmacy that mentions discount cards, that means pages that say plainly what a card is and is not, link to the Medicare.gov page, and keep savings claims out unless they are supported, and patient request forms that keep prescription details away from tracking tools. We do not decide which programs you join or what you accept from a card company; your pharmacists, your clinicians, your counsel and your state boards do. Our tools are built with HIPAA in mind. We confirm in writing what a BAA covers before any patient information flows through a tool, and if it is not covered, we do not route patient information through it. We are not a healthcare provider and we do not give legal or pharmacy advice. We do not sell lead lists and we do not pay for referrals. For the wider rules, see our healthcare marketing rules hub.

Is a prescription discount card insurance?

No. The FTC says medical discount plans are not insurance and not a substitute for health insurance. Card copy in a practice or pharmacy should say that plainly.

Can our sign say patients save up to a percentage?

Only with substantiation. The FTC has said advertisers using up to claims should be able to show that consumers are likely to get the maximum result under normal circumstances. Leaving the number out is simpler.

Does a discount card purchase count toward a Medicare drug plan?

Medicare.gov says that when someone uses a discount card instead of their Medicare plan, the purchase does not count toward the plan’s deductible or out-of-pocket maximum, and that discount cards are not creditable coverage.

Can a card company pay us for handing out cards?

Have health care counsel review it first. The federal anti-kickback statute can apply when payments are tied to referrals of federal health care program business, and state fee splitting and pharmacy rules vary.

Can we email patients about a card?

If a card company pays you to send it, the communication is marketing under the HIPAA Privacy Rule and needs a patient authorization that discloses the payment. Without payment, whether one of the exceptions in 164.501 applies depends on the message, so check with counsel.

Can we call the card free?

Only if it is, and any sign-up step, fee or paid tier sits next to the word. The FTC guide on the word free is covered in our cash prices guide.

Sources

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