Patient as pawn

By Ruth Carol, contributing writer

Copay accumulators debuted last year going largely unnoticed by physicians and patients, but all that could change this year as more insurers adopt them.

Under insurance plans with this policy, copay coupons given to patients by branded drug manufacturers will no longer count toward patients’ deductibles and out-of-pocket maximums. As a result, patients will pay more money for their medications, and those who are prescribed biologics and have high-deductible plans will likely be the hardest hit.

Copay accumulators

Insurance companies have adopted copay accumulators to direct patients to less expensive medications, according to Joerg Albrecht, MD, chair of the Academy’s Drug Pricing and Transparency Task Force. The pharmacy benefit managers (PBMs) and large insurers that have implemented this policy are CVS Caremark, Express Scripts, and OptumRx, as well as several Blue Cross Blue Shield plans, Molina Healthcare, and UnitedHealthcare.

“It’s just an escalation of the war between insurers and the pharmaceutical industry,” said Daniel D. Bennett, MD, a member of the Academy’s Drug Pricing and Transparency Task Force. Historically, pharmaceutical companies have made their drugs available to patients at little cost through copay assistance programs, which typically lasted long enough for the patients to pay for their deductibles. In many cases, these programs made very expensive drugs affordable for patients. While the patients saw little cost, the insurers and employers have seen their costs for these drugs escalate, he explained.

Copay coupons have been blamed for contributing to rising health care costs by encouraging patients to buy specialty drugs even when cheaper brand-name or generic drugs are available. A 2016 American Economic Journal: Economic Policy study found that coupons increased branded sales by more than 60%, entirely by reducing the sales of generics. The introduction of a copay coupon is estimated to increase total spending by an additional $700 million to $2.7 billion over a five-year period following generic entry for the 23 drugs identified in the study. That breaks down to $30 million to $120 million per drug (2016; 9(2): 91-123).

In response to copay coupons, which have grown steadily since they were introduced in the mid-2000s, insurers and/or PBMs have recently implemented copay accumulator policies that shift much more of the cost to patients who now must fulfill their deductibles when the copay assistance programs run out. Essentially, the copay coupon can no longer be used by the patient to pay for deductibles. The health plan/PBM may receive the full value of the manufacturer copay card plus the deductible paid by the patient, thus significantly increasing the money they receive. It should be noted that Medicare bans the use of coupons as the Centers for Medicare and Medicaid Services considers them kickbacks. Additionally, CMS has proposed banning the use of copay coupons in qualified health plans in the health insurance exchanges.

Growing trend

According to research conducted by Zitter Health Insights — which looked at 49 health plans and PBMs with 147 million covered lives — 44% of commercial lives are covered by payers that implemented a copay accumulator program in 2018. Another 27% of plans expect to adopt this policy by or after 2019.

Employers are getting on board as well. Only 17% of employers used copay accumulators in 2018, reported the National Business Group on Health based on its survey of 170 employers. In 2019, 29% of employers will use them. Among the large employers implementing copay accumulators are Walmart, Home Depot, Allstate, and PepsiCo. Some of these programs target therapies for psoriasis, among other medications sold through a specialty pharmacy, according to Reuters. As more employers adopt this policy in 2019 and beyond, more patients will face higher out-of-pocket costs for medications, noted Ashley John, a manager in Advocacy and Policy at the AADA.

Educating patients about copay accumulators

Physicians may want to prepare their patients for higher out-of-pocket costs this year in case their insurer has implemented a copay accumulator program.

“It is very difficult for patients to know if their insurance product includes a copay accumulator program, and there is no way that we, as physicians, can know,” Dr. Bennett said. He recommends that patients scrutinize their insurance plan contracts to find out if it has a copay accumulator. Explain that they go by different names. For example, it is called a Coupon Adjustment: Benefit Plan Protection Program at UnitedHealthcare, an Out of Pocket Protection Program at Express Scripts, and a Specialty Copay Card Program at CVS Caremark.

To that point, a coalition of nearly 60 patient advocacy organizations called on all 50 state insurance commissioners and attorneys general last May to investigate copay accumulator programs as a possible violation of consumer protection laws. The coalition members maintain that insurers are not being transparent about adding this policy to their plans, but rather burying it in hard-to-understand language for consumers.

If patients can no longer afford their medications because of the policy, Dr. Bennett will refer them to his institution’s social services program to help find assistance for necessary medications. “For better or for worse, I also make sure patients understand that we as voting citizens are ultimately responsible for the American health care system,” he said, “so if they want a better system, they must pay attention, be engaged with their elected officials, and vote.”

The Academy has developed patient resources about copay accumulator policies that can be downloaded from its website. These documents explain what they are, how they will impact patients, why the policy is being implemented, and what to do if patients are impacted by it. The Academy also offers tips for reducing drug prices for patients that can be downloaded from its website. Access these resources.

POTENTIAL IMPACT ON PATIENTS

Copay accumulators will impact patients who require expensive specialty medications the most, Dr. Bennett noted. Psoriasis patients will likely be impacted most frequently. Atopic dermatitis patients will likely be affected as well, as new treatment options enter the marketplace. Similarly, as more patients with advanced melanoma stand to benefit from newer targeted therapies, they can expect to face higher costs as well.

“Patients who have a high-deductible insurance product with a copay accumulator program can expect to face very high costs when the drug company’s copay assistance program ends,” Dr. Bennett said. In the case of a patient who is taking a medication that costs $2,000/month, the patient uses a copay coupon valued at $8,000, which will run out in four months. The patient has to pay $2,000 for the next three months to pay for the medication until the patient meets their $6,000 deductible. After that, the patient is required to pay co-insurance, which is usually 25% of the manufacturer’s cost. That translates to $500/month for the rest of the year for a total patient out-of-pocket cost of $8,500.

Before the copay accumulator policy, the deductible would have been met by using $6,000 of the $8,000 coupon. Once the coupon is used up after four months, the patient would only be responsible for the 25% coinsurance ($500/month) for the remaining eight months, for a total patient out-of-pocket cost of $4,000 (see sidebar for a full breakdown).

“I predict that some fraction of these patients will simply choose not to purchase their medications, leading to poorer outcomes,” he said. More patients, who otherwise may have been treated effectively as outpatients, may be hospitalized for severe psoriasis or atopic dermatitis. In addition, more patients may choose less effective, or more dangerous, older medications, Dr. Bennett added.

Many patients, especially those taking biologics, can’t afford these drugs without any assistance, Dr. Albrecht said. Consequently, this policy could have devastating consequences for these patients.

“The Academy’s concern is what happens to patients when the coupons run out,” John said. For some of these medications, there are no lower-price therapeutic alternatives, so this policy will decrease medication access for patients who cannot afford the full cost of their deductible. There is concern about adherence issues particularly for patients with psoriasis who are stable on a therapy and due to financial burden can no longer afford it. Finally, these types of policies could spill over into other health services costs, as patients who can’t afford their medications may utilize higher-cost options such as hospitalization, she said. “We need to control health care costs, but not by leaving the patient with the bill,” John added.

CURBING COSTS…FOR NOW

Some data suggest that these policies are controlling costs, just not for patients. Reuters reports that drug manufacturers are monitoring the effects of copay accumulators and considering implementing measures to counter the policies. Among them could be new payment options that would go undetected by PBMs, enabling patients to continue benefitting from the copay coupons, or new discounts for payers. Just as insurers found a way to work around the copay coupons, Dr. Albrecht expects drug manufacturers to come up with a work around, perhaps in the form of a rebate, for the copay accumulators.

“While the insurers and manufacturers fight their war, patients are caught in the middle,” Dr. Bennett concluded. "I don't see any evidence that either party really has patients' needs in mind."

With the introduction of the 'copay accumulator,' the battle between insurers and drug makers has escalated. Meanwhile, patients pay the price