Though patients get a big discount when paying for drugs, copay accumulators prohibit discounts from applying to plan deductibles, extending time it takes for enrollees to reach full plan coverage
There’s a new insurance/payer industry tactic in town and Dark Daily thinks clinical laboratories and anatomic pathology groups should know about it. It’s called a “copay accumulator” and it was designed by payers in response to pharmaceutical company copay assistance cards and discount coupons.
How do Copay Accumulators Work?
Many consumers use manufacturer copay assistance programs, copay cards, and coupons to afford expensive brand-name medications. As payers attempt to make consumers pay a higher portion of drug costs, pharmaceutical companies have responded by offering financial aid to patients in the form of copay assistance cards and coupons. These discounts insulate patients from having to pay the full deductible required by their health insurance plans for medicines prescribed by their doctors.
However, payers say these deductibles were designed to motivate patients to monitor the price of prescribed drugs and discourage the overutilization of costly medicines. A primary goal of price transparency and precision medicine.
The upside to payers is, with a copay accumulator in place, the amount of those manufacturer discounts does not count toward the patient’s insurance deductible. And the longer it takes for patients to reach their deductibles, the longer the insurer gets to collect copays, which adds to the controversy of copay accumulators.
Also, prohibiting drug manufacturer discounts from counting toward a patient’s insurance deductible prolongs the time patients have to wait before full coverage begins. Thus, more upfront costs are shifted to consumers.
“Copay accumulator programs are nothing more than insurance scheme[s] that leave patients financially exposed while benefiting payers’ bottom lines,” Stephen J. Ubl, President and Chief Executive Officer, Pharmaceutical Research and Manufacturers of America (PhRMA), told the LA Times.
Others, however, claim manufacturer discounts are simply marketing schemes used by pharmaceutical companies to keep drug costs high.
Patients Stuck in the Middle
Physicians and patient advisory groups worry that shifting more drug costs to patients may affect therapy adherence and cause confusion for consumers.
“But the Achilles heel for the pharmacy benefits manager is that you’re hurting the patient, who is stuck in the middle,” continued Vogenberg. “Patients may end up not taking or getting a drug, which is not good for anyone. And it’s not really affecting pricing because patients are still hurting. Unfortunately, it makes the third-party payer look like a crook.”
Managed Care notes that, according to a recent survey of 170 employers conducted by the National Business Group on Health (NBGH), 29% of employers plan on using copay accumulators in 2019. That’s up from the 17% of employers who are currently using them.
“They are not universal yet,” Steve Wojcik, Vice President of Public Policy at the NBGH, told Managed Care. “But they will probably continue to be one tool that employers use to keep costs down.”
Drug Costs Down, Cost to Patients Up
The struggles between payers and big pharma could be heating up. Studies show utilization of copay accumulators may be negatively impacting drug company revenue. Research conducted by Sector and Sovereign (SSR) found that retail drug prices in the United States fell 5.6% during the first quarter of this year. During the same period last year, prices fell just 1.7%. SSR’s report states that most of the decline in prices is due to copay accumulators.
Clinical laboratories might not directly feel the effects of copay accumulators. Nevertheless, anything that impacts patients’ ability to pay, especially those on high-deductible health plans, should be on the radar of smart lab managers and stakeholders.