Medication Cost-Share Offset Programs
Legislative and Regulatory Position:
AMCP recognizes that many patients today depend on high‐cost specialty medications that often do not have therapeutic alternatives. Medication cost-share offset programs provide out-of-pocket discounts or free product at the point of sale.1 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
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 supports means-tested programs that provide patient access to the most appropriate medications that may be otherwise unaffordable.
Manufacturer coupon programs can reduce out-of-pocket costs and potentially increase medication adherence, but these programs raise some concerns. These coupons can work against the benefit design strategies set by payers. 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 is 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. 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. Once a manufacturer’s coupon expires, patients are left paying more out of pocket for the same drug.
Despite appearing to be charitable assistance, these programs are often used as a marketing tool for expensive medications.2 For example, health plans and pharmacy benefit managers (PBMs) 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. When manufacturer coupons reduce, or even eliminate, this cost differential, the patient may be incentivized to use a medication with a higher cost to the health plan or PBM. This raises the costs of administering the prescription drug benefit, which in turn leads to higher premiums for patients. Perhaps counterintuitively, while the patient has a lower cost‐sharing responsibility at the initial point of sale, they may see a higher overall cost of health care as a result of using manufacturer coupons.
Copay Accumulator Programs
Some health plans and PBMs use copay accumulator or copay maximizer programs to help contain costs. An accumulator program does not count manufacturer coupons toward the deductible or annual out-of-pocket maximum as the patient is not paying these amounts. A maximizer program sets a patient’s cost-sharing at the maximum value of the manufacturer’s coupon assistance. There are no standard requirements for manufacturer coupon transparency. Health plans and PBMs 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 PBMs 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 PBMs should have the flexibility to determine whether the manufacturer coupon values are accumulated to a patient’s annual out of pocket costs.
In September 2023, the U.S. District Court for the District of Columbia struck down a federal rule that allowed health insurers to not count drug manufacturer copay assistance towards a beneficiary’s out-of-pocket costs.3 The Court set aside this rule “based on both its contradictory reading of the same statutory and regulatory language and the fact that the agencies have yet to offer a definitive interpretation of this language that would support their authorization of copay accumulators.”4 The Court remanded the issue to HHS to determine how it defines cost sharing with regard to manufacturer assistance. AMCP supports an interpretation that would allow copay accumulators.
AMCP supports 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 PBMs 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, December 2023
Revised by the AMCP Board of Directors, March 2022
1 Sen AP, Kang S, Rashidi E, Ganguli D, Anderson G, Alexander GC. Characteristics of Copayment Offsets for Prescription Drugs in the United States. JAMA Intern Med. 2021;181(6):758–764. doi:10.1001/jamainternmed.2021.0733