The co-pay card debate simmers, as payers push back

Photo credit: Pictures of Money/Creative Commons

Any program that puts more greenbacks in patients' pockets in this post-recession economy has to be viewed as a good one, right? Alas, it depends on the person you ask.

Devised to shoulder some of the cost burden of prescription drugs, manufacturer co-pay card programs have been tied to improved adherence rates and reduced barriers to the discounted medications. At the same time, payers — insurers and PBMs alike — are crying foul.

While some industry veterans sing the praises of co-pay assistance programs, others are eager for a more evenhanded and efficient solution that will achieve the same degree of cost savings. In fact, the co-pay card appears to be stirring the controversy pot more than ever. Indeed, the question seems to have become: What will make it boil over?


As prescription drug prices skyrocket, most notably for specialty medications, some consumers have simply been priced out of certain treatments. In theory, the co-pay card seems the perfect fix, lowering out-of-pocket expenses for commercially insured or cash-paying patients and, in doing so, expanding their treatment options.

“Adherence to doctor's orders is one of the biggest challenges in the industry,” says Mike Boken, managing partner at BioCentric. And cost is arguably one of the biggest barriers to medication adherence. In fact, 27% of insured patients report a medication's cost as the main reason for not filling a prescription, according to a Kaiser Family Foundation tracking poll.

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It's difficult to measure just how much cost affects a patient's ability — or willingness — to follow through with a prescribed medication. According to Boken, cost may be a major influence, but it's not the only driver affecting adherence rates. “Sometimes adverse events can affect the numbers. Sometimes a patient simply doesn't like taking a medication,” he says.

Either way, medication cost is an issue for providers, too. Physicians often factor in the depth of a patient's pockets when prescribing a new medication — and therefore they have been among the biggest and most vocal supporters of co-pay coverage programs. In a CMI/Compas study of promotional preferences, physicians surveyed across nine specialties placed a higher value on patient assistance programs than sample and voucher programs.

Millennial physicians, in particular, are hardwired to think about pricing and often pepper sales reps with questions about coverage and patient costs. “Younger docs grew up with these programs,” Boken says. “They're still trained to use generics first, but they're open to co-pay programs.”

But Boken stresses that cost is neither a singular nor an isolated driver. “Newer products usually have some points of differentiation from the generic older products, but the clinical benefit has to be there,” he adds. “Sometimes when we talk about co-pays and payer issues, we lose sight of that.”

Bob Hastings, VP of marketing at co-pay program provider TrialCard, counters that co-pay cards give physicians more flexibility in treatment options. “Physicians are trained to be the experts. We prefer they make a therapeutic choice on behalf of a patient rather than on the formulary's wishes.”


But after more than a decade as an industry staple, the instant-rebate tactic has come under fire. Andrew Miller, VP of operations at pharmacy benefits manager MeridianRx, has grown increasingly concerned with the damaging effects of co-pay cards on payers. Consider insured patients who have been prescribed AbbVie's Humira for their rheumatoid arthritis at $4,000 per month. After insurance and co-insurance kick in, they're on the hook for $1,000 a month. But wait — the manufacturer just happens to have a co-pay coupon, which reduces the cost to zero.

What's the problem, you ask? The insurer and the PBM didn't get the memo. After six months of taking and paying for the medication, the PBM's records show the patient paying $6,000 and capping out his out-of-pocket maximum — when, in fact, the patient has paid nothing — the drug company picked up the tab. “There needs to be collaboration to flag that a co-pay coupon has been used,” Miller stresses.

See also: Price fixing: PBMs push for lower prices of PCSK9 inhibitors

As Keith Jacobs, president of benefits manager Luscinia Health, explains it, “Instead of reducing the actual price of the medicine, co-pay cards simply drop the cost of the consumer's portion, leaving the insurer to pay the same high price and pass on the effects to its future customers.” Business partners in the payer categories have relayed to Jacobs their frustrations in negotiating a pricing structure that creates an economic incentive for the patient only to have that patient's behavior modified by the manufacturer of the product being negotiated.

Surely there's a better way, according to Miller. The trouble is that most of the proposed solutions require manual data input or other inefficient approaches. “I know which drugs have high propensity for co-pays, so I can reach out to pharmacies,” he says. “But are they going to be honest?”


The recent uptick in the use of co-pay cards can be attributed to a variety of industry trends, among them tighter formulary controls, newer and more expensive products reaching the market, patient perception of the value of healthcare, and the Affordable Care Act prompting more people to seek insurance in the marketplace. In the ever-evolving U.S. healthcare ecosystem, today's patients feel the financial strain.

According to TrialCard VP of analytics Paul LeVine, more patients are being covered by high deductible insurance plans, confirming the need for programs that reduce out-of-pocket expenses. “We're facing the highest number of issues with insurance we've ever had on the patient side,” he says. “We're gaining momentum behind methods to make sure that patients get access to the drugs they need.”

See also: Pricing debate changes perception of patient assistance programs

But co-pay programs require patients and providers to do some legwork. Although Boken acknowledges the average consumer is savvier about healthcare than used to be the case, the quest for a co-pay discount often means trolling consumer websites for offers, having the offer in hand, and remembering to present it to the pharmacist at the point of purchase. Discounts may also be obtained through physicians, though that route is becoming less common these days.

Jacobs agrees that co-pay cards require a decent amount of effort to find, understand, and use. To a single working parent with three children, for example, so much effort might feel daunting, he suggests.

Some manufacturers have begun working with third-party vendors to sidestep these concerns by automatically applying discounts at the pharmacy, often without the consumer's knowledge. RelayHealth's eVoucherRX program, for example, automatically applies co-pay savings to qualifying claims.

Co-pay cards may not always be found neatly lined up alongside driver's licenses, credit cards, and retail reward cards in consumers' wallets, but they do factor into budgets. The most important benefit of automatic discounts is making medications more broadly available to patients, Boken notes.

“We all want things to cost less and be more convenient,” he says. “Beyond that, lower co-pays overall and broad uptake are better for business.”