On June 17, 2020, the Centers for Medicare and Medicaid Services issued a proposed rule that, if finalized, would revise how manufacturer coupons are accounted for in best price calculations. “Best price” is a legislated policy solution that requires drug manufacturers to offer state Medicaid programs the best price given to any other purchaser. Pharmacy benefit managers (PBMs) and health plan sponsors will be able to take advantage of these funds to reduce their cost burden for specialty drugs, contending that manufacturer-sponsored assistance programs steer patients toward more expensive specialty medications when cheaper alternatives are available. In situations where this occurs, biopharmaceutical manufacturers would be required to include the full value of the copay offer when reporting best price under the proposed rule, because the manufacturer assistance funds are not used entirely to benefit the patient.”
The public was given the opportunity to formally comment on the proposed rule for 30 days, and multiple stakeholders (pharmaceutical manufacturers, patient advocacy groups and service providers) provided feedback. In all, more than 30,000 comments were collected.
Waiting but fighting
On October 13, 2020, Rick Fry, SVP, commercial solutions, TrialCard, led a discussion regarding the impact of copay accumulator and maximizer scenarios when subject to best price calculation. He was joined by panelists Peter Pitts, president and cofounder, Center for Medicine in the Public Interest; Bill Sarraille, partner, Sidley Austin; Carl Schmid, executive director, HIV + Hepatitis Policy Institute; Stacey Worthy, partner, DBCA Law and executive director, Aimed Alliance; and Jason Zemcik, senior director, product management, TrialCard.
“CMS is in the process of reviewing comments on the proposed rule and determining what action to take,” explained Sarraille, anchoring the conversation. “Given the number of comments, complexity of the issue and upcoming presidential election, it’s probably going to take some time before the agency can complete the approval process which involves not only receiving input and direction from within CMS, but from U.S. Department of Health and Human Services as well.”
For Pitts, there is no question of whether the rule should be withdrawn.
“This is an argument — plain and simple — about money over positive patient outcomes,” he opined. “The higher the copay, the less compliant patients are. When people say, ‘My drugs are too expensive,’ what they generally mean is, ‘My copay is too expensive.’ This rule will do nothing if not increase the cost of the copay.”
Sarraille pointed out that the rule seems to leave open the right price reporting analysis. That if, in fact, the benefit is not seen exclusively by the patient, it is understood as benefiting the payer.
“The upside is that when you look at best price from a payer perspective, it’s a reflection of a whole lot of utilization,” said Sarraille. “Manufacturers are probably more concerned about whether there’s a more systematic risk that a very large number of coupon transactions would not be captured and dealt with appropriately, at least as CMS views the standard to be applied.”
“We wouldn’t have this issue of copay accumulators and high cost sharing if we had better insurance benefit design and reasonable copays like we used to,” Schmid suggested. “We can work at the state level to combat it, we have already seen some successful actions there, but unfortunately that does not impact the ERISA (Employment Retirement Income Security Act) market, which means we need federal legislation as well (state laws prohibiting copay accumulators do not apply to self-funded plans due to ERISA). We’re going to continue to fight because we need access, and we need to afford our medications.”
As a copay program provider, TrialCard believes accumulators have a negative effect on a pharmaceutical manufacturer’s ability to deliver patient assistance for high-cost specialty medications, many of which do not have generic alternatives.
“We’ve been educating employer groups on the impact of copay accumulators beyond just financial savings tools and have analyzed their effects on employee productivity and long-term healthcare costs,” Zemcik explained. “Our role as a copay program provider working on behalf of our manufacturer clients is to help design their programs in a way that’s going to best address all of the complex issues.”
All panelists agreed these issues include a patient’s inability to afford medication, which retroactively makes them unable to focus on work. Imagine if an employee needed a therapy but couldn’t afford it. What would happen? They’re going to get sick, which in the end will wind up costing health plans more when their illness grows untenable and they wind up in the hospital.
“We’ve been educating employers directly because a lot of what they hear is from insurance brokers is that these cost- saving measures are going to impact their bottom line,” said Worthy. “They don’t explain how copay accumulators actually impact their employees’ ability to come to work and be productive or not need their short- or long-term disability plans because they’re having flare ups when they can’t afford their medication.”
To Sarraille, there is “an underlying dynamic of skepticism of manufacturers and their assistance programs.”
“In a lot of ways the proposed rule is a reflection of a False Claims Act litigation theory that’s been advanced by the U.S. Attorney’s Office in Boston,” he said. “This is really the regulatory revisioning of that litigation theory. It’s a very sad thing to see a policy driven by a set of law enforcement perspectives that don’t reflect the impact that those views are going to have on patients.”
Pitts jumped in and added, “Unless everybody, both CMS and individual payers, recognizes the impact on patient outcomes — that this rule will increase healthcare costs beyond the price of the medicine to the overall cost of the system of any given patient — we’re just going to be stuck talking in circles.”
At this time, contingency planning is difficult since nobody knows when this rule may go into effect and whether it will pass in its current form. However, there are still proactive steps that can be taken to mitigate potential effects.
“One thing we advise all of our clients to do, based on the financial dynamics of their brand and copay offer, is to initially try to solve this with minimally invasive methods,” said Zemcik. “Take a look at where your brand is from a price and price reporting standpoint, what payer contracting looks like and what you’re already paying. See if you can slightly reduce the benefit amount of your copay offer so that it’s not going to negatively expose you to best price reporting before redesigning how the program operates.”
At the close of the discussion, the group’s consensus was that the rule was subject to challenge under the Administrative Procedures Act. Given this, the issue of copay accumulators and their impact on patient assistance programs is unlikely to go away any time soon. Pharmaceutical manufacturers must plan for multiple scenarios with this ever-changing topic when designing their programs.