Despite our booming economy, consumers continue to lose out on potential prescription drug cost savings, driven by a system of perverse incentives that allow middlemen like pharmacy benefit managers (PBMs) to reap more profits and raise costs for consumers without adding value.
Similarly, health insurers continue to saddle patients by making them responsible for increasingly higher proportions of the cost of their care. In all of this, middlemen and health insurers win, while everyday Americans are left to foot the bill, paying more for less.
Many insurers and PBMs are implementing “copay accumulator adjustment programs,” changing how plans process copay assistance and prescription drug coupons so that these forms of support no longer count toward a patient’s deductible or maximum out-of-pocket limit (i.e., the most a patient is required to pay over the course of the year).
These copay accumulator programs, often implemented without a patient’s knowledge or full understanding, force patients to pay more out-of-pocket costs in the long run, potentially endangering the most vulnerable patients who need their prescriptions the most.
Vulnerable patients, with limited income, use coupons or copay assistance to afford the cost of their medications. This is particularly true for patients who take preventative medications, such as PrEP to prevent HIV, or patients treating long-term chronic diseases, like heart disease and diabetes.
These specialty medications are typically expensive, but their manufacturers have created programs that offset the cost to the consumer, allowing patients to afford and access the medicine they need.
That’s the way the free market is supposed to work: When producers identify a need and a vulnerable population, they provide assistance so people can afford those products.
Previously, this manufacturer-provided assistance counted toward a patient’s annual deductible and maximum out-of-pocket limit, meaning that many patients had to pay only their copay for their medication. For some individuals and families, this copay can still be a burden, but it typically does not approach the full cost of a specialty drug.
But the health insurers and PBM middlemen did not let the free market work. They created so-called “copay accumulator adjustment programs.” Any time you hear of a program with an overly complex name, you know mischief is afoot.
Under copay accumulator adjustment programs, the assistance no longer counts toward the patient’s annual deductible or maximum out-of-pocket limit; in other words, only when the cost-sharing assistance is exhausted do patient payments count toward the deductible and maximum out-of-pocket limit.
This forces the patient to potentially pay thousands more in out-of-pocket costs over the course of the year for their health care. These programs are no more than a direct transfer of obligation from insurance companies and PBMs to consumers.
Worse still, consumers are paying for benefits and costs savings that PBMs and insurers have already utilized. This double payment does nothing to reduce the price of prescription drugs; instead, it only increases the burden that patients face at the pharmacy counter.
Copay accumulator adjustment programs further distort the already complex and opaque drug-pipeline, creating another instance of PBMs taking advantage of cost-saving mechanisms intended for consumers, all while adding little value to the system and costing patients more out-of-pocket over the course of the year.
The side effects of these programs are even more problematic. Because patients will now have to pay more out-of-pocket over the course of the year, it will be harder for them to afford the care they need and less likely to adhere to their treatment program.
This not only hurts patients directly, but it also raises the cost of health care across the entire system. Failure to adhere to treatment programs leads to sicker patients who often require care that in the long run is dramatically more expensive than preventative therapies.
We need tangible action to avert this mischief by health insurers and PBMs to defend American patients. Insurers and PBMs must be held accountable for their actions that provide no benefit to patients but rather profit off their medical needs and coupons that were intended to help them save on the cost of care, not pay more.
Doing so will require state insurance commissioners to investigate, demand answers and push for change to protect the health and wellbeing of patients. Patients need real action to stop copay accumulator adjustment programs and the PBMs and insurers that continue to increase their cost of care.
David Balto is a former policy director of the Federal Trade Commission’s Bureau of Competition and a former antitrust lawyer at the U.S. Department of Justice.