The district court judge in the copay accumulator case has cleared the air.
Judge John D. Bates, of the U.S. District Court for the District of Columbia, not only reiterated that he agrees with the three patient groups who were plaintiffs in the case. The groups brought suit to dissolve the government’s 2021 accumulator rule, which had allowed insurers to not count prescription drug co-pay assistance toward a beneficiary’s out-of-pocket costs for branded drugs that don’t have a generic equivalent.
He also specified that a 2020 rule now goes into effect, removing any ambiguity around his intent, which was to limit application of the practice to branded prescription drugs where there is a generic. Judge Bates’ opinion dealt a blow to the Biden administration, which had sought to allow plans a freer hand in applying the tactic.
“The government cannot simply ignore the fact that the rule allowing insurers to implement copay accumulators has fallen. It has been vacated,” stated George Huntley, CEO of the Diabetes Leadership Council and the Diabetes Patient Advocacy Coalition, two of the plaintiffs. (HIV+Hepatitis Policy Institute was the third.)
“We, again, call on the federal government to issue guidance that copay assistance, in most instances, must count,” added Huntley. “Insurers must follow the law, and state and all other regulators must ensure that insurers do not implement copay accumulators.”
Judge Bates’ opinion marks the latest wrinkle in the case. In September the court set aside the 2021 federal rule – the Notice of Benefit and Payment Parameters – that had allowed insurers to apply copay accumulators on newer brands.
The decision left health plans to fall back on the rule’s 2020 version, permitting use of accumulators primarily where there is a branded drug with a generic. However, the judge didn’t specify as such, leaving doubt as to whether the agencies were compelled to enforce the older rule or not.
HHS, along with sister agency the Centers for Medicare & Medicaid Services (CMS), proceeded to file a motion for an appeal and took the unusual step of seeking clarification from the court regarding what rule is in effect. That prompted plaintiffs to file their own notice of appeal and also to oppose the agencies’ request for clarity, implicit in which was a “nonenforcement policy.”
Indeed, in legal filings the agencies described that their intent was “to address, through rulemaking, the issues left open by the court’s opinion” and to refrain from “tak[ing] any enforcement action against issuers or plans based on their treatment of such manufacturer assistance” pending the issuance of a new final rule.
The opinion, however, states in no uncertain terms, “The prior (and thus reinstated) rule is the ‘2020 NBPP’.”
Where there is no generic or medically appropriate equivalent available, “amounts paid toward cost sharing using any form of direct support offered by drug manufacturers must be counted toward the annual limitation on cost sharing,” the rule’s preamble states.
As to HHS’s nonenforcement policy, the court declined the defendants’ request to validate it. That said, it stopped short of opining on whether HHS can maintain a blanket non-enforcement position, since this wasn’t an issue raised in the case.
Based on Judge Bates’ opinion, “copay accumulators are now broadly unlawful, a legal restriction which is generally enforceable by state insurance commissioners and plan holders themselves, via ERISA and other actions,” plaintiffs asserted in the statement.
Also late last month, a letter sent by a bipartisan group of senators to HHS voiced support for removing copay accumulators. Led by Sens. Tim Kaine (D-VA) and Roger Marshall (R-KS), the letter also contained a push for a bipartisan bill that would permanently prohibit their use, called the Help Ensure Lower Patient (HELP) Copays Act.