PBMs, drugmakers face off over copay accumulators

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“Why are middlemen trying to keep you from reaching your deductible?” asks one slogan. “You shouldn't have to fight for your medicine,” reads another.


Commissioned by Pharmaceutical Research and Manufacturers of America (PhRMA), the campaign is part of the latest round of finger pointing between drug manufacturers and insurers over who is to blame for rising drug costs. The series of ads paints PBMs and payers as villains in the brewing battle over coupons and co-pay accumulators.


“We believe all patients should have access to affordable prescriptions and care, not just those using a medication with drug maker copay assistance,” Steve Miller, chief medical officer of Express Scripts, shot back in a recent post entitled, “Why Drug Makers Dislike Copay Accumulator Programs. “To that end, lowering the cost of drugs to increase access is the best thing pharmaceutical manufacturers can do.”


Some quick background: PBMs and insurers set formularies, which dictate prescription drug coverage. In a bid to get high-tier drugs to patients who couldn't otherwise afford the copay, manufacturers offer coupons with dramatic cost savings. Humira, AbbVie's RA drug, can cost thousands a month. With coupons and co-pay assistance, copays are a tiny fraction of that amount.


Coupons began popping up roughly 10 years ago, and have proliferated since then, said Geoffrey Joyce, director of health policy at the Schaeffer Center at the University of Southern California. Between 2013 and 2016, prescriptions filled using a coupon increased from 13% to 19%, according to a QuintilesIMS report. Industry spent $7 billion on the programs in 2015.


The practice is loathed by PBMs and payers, who view it as surreptitious move by drug companies to side step formularies and public outrage while continuing to raise drug prices.


Enter co-pay accumulators. Essentially, these plans stipulate that when patients use coupons at purchase, the discounts do not apply to their deductibles or out-of-pocket maximums. When the card is exhausted, patients may be told they have to pay for the drug in full.


Reports of co-pay accumulators emerged in 2016 and 2017, but on a small scale. “[This past] January, they started to roll out on a much larger basis,” said Adam Fein, president of the research firm Pembroke Consulting. Both UnitedHealthcare and Express Scripts offer beneficiary plans with accumulator programs. It's hard to get an exact count of the number of commercially insured beneficiaries that include them as part of their benefit plan design, but Fein believes it's anywhere from 5% to 15%. Drug companies, including Amgen, Pfizer, and Sanofi, are taking notice. As are analysts:


“We agree this has the potential to significantly decrease patient usage of specialty drugs in the commercial space and believe investors are underappreciating this risk,” analysts from Credit-Suisse wrote in an investor note on AbbVie from January. “Given ABBV's reliance on Humira, it is not surprising to see that they are the large cap global biopharma company most exposed to this risk.”


As the issue comes to a boil, both sides are ramping up their efforts to pin the blame for the looming mess on the other. We've reached a tipping point, said Joyce.


PBMs and insurers argue that coupons drive up drug costs by pushing patients away from generics towards brand drugs: when Lipitor lost exclusivity, Pfizer issued coupons so patients would continue to fill the prescription over generics. Overall, coupons have played a role in driving up premiums. (Medicare bans their use, basically labeling them kickbacks.) "In the short term, consumers are going to be potentially devastated by the sudden change in out-of-pocket spending,” Harvard health economist Leemore Dafny told Axios. “In the long term, it's a cost-control measure that is long overdue."


But coupons aren't just being used for branded drugs with generic equivalents, Fein said. They're increasingly being used to cover the costs of speciality drugs, including treatments for HIV, rheumatoid arthritis, Crohn's disease, and cystic fibrosis. As a result, co-pay accumulators inordinately impact patients with chronic or rare conditions, a population that has been pushed into plans with high deductibles that can cross the $10,000 threshold.

In response to the threat of co-pay accumulators, Big Pharma is “freaking out,” said Madelaine Feldman, a practicing rheumatologist in New Orleans and vice president of the Coalition of State Rheumatology Organizations. “People are going to stop taking these drugs. They aren't going to be able to afford it.”


And so the weighing of responses has begun. “A patient of mine said they're talking about reimbursing her after she pays the copay,” Feldman said, although this workaround would exclude patients who can't access the hundreds, sometimes thousands of dollars required to make the copay in the first place. Other, imperfect, options include: stipulating that copay cards can only be used if they count towards patients' deductibles or out-of-pocket maximums, which exposes hidden co-pay accumulator programs earlier, and raising the value of copay cards so they cover a year's worth of treatment.


There's also some chatter that co-pay accumulators could be challenged on legal grounds. Patient advocates are “looking for some type of discriminatory basis for a lawsuit,” said Feldman, as the patients “hit the hardest are the ones with long-term chronic diseases and rare diseases. You're putting in place a program that specifically harms this group of patients.”


It's unclear how the situation plays out from here. “I think it's a little bit of an experiment on people to see how badly this affects people,” Fein said. If the pushback isn't widespread or if PBMs and insurers manage to shift the blame to manufacturers' sky-high drug prices, the plans will likely get a wider roll out. But if the outcry is loud enough, PBMs could dial back the offering or employers could be pressured into not selecting the plans.


What is clear: this issue is about to come to a head as more patients realize they haven't been contributing to their deductibles.


As with most drug pricing battles, it's individual patients who will suffer the most. Already, there are accounts of people who, after exhausting the coupon value provided by the manufacturer, try and fill a prescription only to be told they haven't been working towards their deductible and must pay it in full to access the medication. Others are heading towards this same reckoning, they just don't know it yet. “This is subtle language that could be buried in your explanations of benefit book somewhere,” Fein said.


Whether the fault lies with PBMs and insurers for attacking coupons or manufacturers for raising the price of speciality drugs is up for debate -- and kind of besides the point. “I'm not shifting the blame,” Feldman said. “I'm sharing the blame.”


As the two sides face off yet again, it looks as though patients are — yet again — caught in the balance.


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