Medication Cost-Share Offset Programs
Where We Stand:
AMCP believes that pharmaceutical manufacturers, charitable organizations (501(c3)), plan sponsors, health plans, pharmacy benefit managers, states and pharmacies should have the common goal of improving patient access by making medications affordable. AMCP also recognizes that many patients today depend on high‐cost specialty medications that often do not have therapeutic alternatives. AMCP is concerned that certain cost‐share offset programs may undermine formulary development and utilization management techniques and can also increase costs for health plans and, ultimately, patients themselves.
Several different patient assistance and direct to consumer coupon programs are available in the marketplace. These programs are discussed below.
- Patient assistance programs are generally offered through either pharmaceutical manufacturers or charitable organizations. Patients who are uninsured or cannot afford to purchase their medications are offered free drugs or financial assistance, usually based on economic need and/or the appropriateness of the treatment for a patient. Many programs benefit patients taking high‐cost specialty medications, that often do not have therapeutic alternatives, and frequently have a higher member cost share than traditional prescription drugs. AMCP is supportive of means-tested programs that provide patient access to the most appropriate medications that may be otherwise unaffordable.
- Manufacturer coupons are issued by pharmaceutical manufacturers and serve to promote the use of specific branded medications. They are used in conjunction with a patient’s health insurance coverage to supplement their out-of-pocket costs, such as deductibles or copayments. This requires pharmacies to coordinate insurance and coupons by first processing the prescription to the health insurance and subsequently the manufacturer to apply the coupon. This reduces the member cost share at the point of sale and through the manufacturer coupon; the pharmacy will be reimbursed the discount by the manufacturer.
Use of these manufacturer coupons are prohibited in Medicare and Medicaid because they are considered a direct inducement to buy a specific product, which is a violation of the federal anti-kickback statute. As well, states like Massachusetts and California prohibit the use of manufacturer coupons for brand-name medications that have a generic available to avoid promoting the use of higher cost brand-name medications over more cost-effective medications.
Manufacturer coupon programs may limit the number of prescriptions that qualify for the coupon (e.g., 12 refills over 12 months), the amount of time that the coupon is valid (e.g., end of the calendar year) or a total dollar value, so patients do not receive an unlimited indefinite benefit.
Manufacturer coupon programs can reduce the out-of-pocket costs to patients at the pharmacy, but there are some concerns that these programs raise. For example, health plans and pharmacy benefit managers typically encourage patients to use their preferred, cost effective therapeutically equivalent medications by placing the preferred medications on a lower cost‐sharing tier of the formulary. Unfortunately, some manufacturer coupons reduce, or even eliminate, the cost differential to the patient between preferred and non-preferred prescription medications, diminishing the incentive for a patient to choose the therapeutically equivalent formulary option that is most cost effective. In situations where a manufacturer coupon is used to encourage the use of a brand-name non-preferred formulary medication and the coupon value or time limit is eventually met, a patient may have to be transitioned to a preferred formulary product or seek a formulary exception for the non-preferred medication. This can place increased burdens on patients and their prescribing health care professional, while possibly increasing costs that may be associated with covering the non-preferred formulary medication.
By distorting economic incentives used by health plans and pharmacy benefit managers to encourage patients to use preferred medications with lower overall costs, manufacturer coupons can undermine the formulary development process and utilization management techniques. Perhaps counterintuitively, they also raise the risk of increased overall costs for patients. While the patient has a lower cost‐sharing responsibility at the initial point of sale, the health plans or pharmacy benefit managers are responsible for the reimbursement cost to the pharmacy. This raises the costs of administering the prescription drug benefit, which in turn leads to higher premiums for patients.
Another concern with manufacturer coupon programs is how they may influence a patient’s health plan selection since their coupon values may be applied to a patient’s annual limit on cost sharing. Given that some manufacturer coupons can cover thousands of dollars in member cost sharing, they can influence a member’s health plan selection towards a plan with higher deductibles and higher annual limits on cost sharing with expectations that a manufacturer coupon will accumulate to their deductible and annual limit on cost sharing. Unfortunately, in cases where this occurs and there is need for a mid-year change to a medication in which a coupon is not available, or coupon limitations are met during the plan year, it can result in patients having unexpected costs for not only their medications but other health care services.
There are no standard requirements for manufacturer coupon transparency. Health plans and pharmacy benefit managers may not be able to identify when a patient uses a manufacturer coupon at the pharmacy. This presents challenges for customer service efforts as patients may not be aware a pharmacy applied a coupon and can create confusion when the member costs do not align with their health plan benefits. AMCP believes that having plans and pharmacy benefit managers gain access to this coupon information could be valuable in helping to provide customer service and to understand the financial impact of coupons on the prescription drug benefits. As coupons can sometimes influence a health plan purchasing decision, circumvent formulary incentives, and encourage the use of higher cost medications, AMCP believes that health plans and pharmacy benefit managers should have the flexibility to determine whether the manufacturer coupon values are accumulated to a patient’s annual out of pocket costs.
AMCP is supportive of programs that help patients afford their prescription drugs. Because some cost-share assistance programs can needlessly encourage the use of more expensive medications over their more cost-effective counterparts, undermine the formulary development process, and create distortions in the marketplace, AMCP believes there should be more visibility into manufacturer coupons being used and that health plans and pharmacy benefit managers should have the flexibility to determine how coupon values are applied to patient benefits.
AMCP Where We Stand series: https://www.amcp.org/policy-advocacy/policy-advocacy-focus-areas/where-we-stand-position-statements
Revised by the AMCP Board of Directors, March 2022