2021 insurance exchange final rule could put the brakes on copay coupons

Erin McCallister Senior Manager, Health Research Institute, PwC US May 07, 2020

Health plans could get some relief from the use of copay coupons with a final rule published last month that may reduce their use among individuals insured through Affordable Care Act (ACA) plans. On April 9, the final notice of benefit and payment parameters for 2021 for exchange plans made its way to the Office of Management and Budget for review.

The rule would allow plans and employers to limit out-of-pocket expenses on prescription drugs to those actually incurred by the patients and not consider any copay assistance the patient may receive from drug manufacturers.

“We believe that this proposal would impose minimal burden, as it reflects the longstanding practice of health insurance issuers and group health plans determining whether drug manufacturer direct support to enrollees for specific prescription drugs counts toward the annual limitation on cost sharing,” the rule states.

Such limits to the use of coupons and other payment assistance from drugmakers are typically referred to as copay accumulators and have been used by commercial health plans and pharmacy benefit managers (PBMs) over the past few years. Drug manufacturers use coupons to help patients offset the cost sharing associated with a brand drug that has been placed on a higher tier, requiring greater out-of-pocket expenses. In some cases, the coupons could encourage the patient to use a higher-cost brand drug over a generic version, thereby increasing costs for the insurer.

For plan year 2020, CMS had also included language that would not require plans to count toward total out-of-pocket expenses any form of direct support offered by drug manufacturers to reduce out-of-pocket costs for brand drugs. At the time, the rule limited the use of copay accumulators to brand drugs when a generic alternative was “available or medically appropriate.”

However, in August 2019, CMS said in an FAQ that it will not enforce that portion of the rule. Patient groups had criticized the move as untenable and shifting too much burden onto patients, stating that manufacturer copay assistance programs help people increase access “by reducing the cost burden” and “helping them to meet their deductible and maximum out-of-pocket spending limit.”

The 2021 proposed rule would not exempt drugs without generic alternatives.

HRI impact analysis

CMS’ final rule could address increased costs linked to copay coupons, but the practice of using copay accumulators has already been banned in some states, potentially muting some of CMS’ intended effects.

Copay coupons have been associated with increased spending, particularly when generic alternatives are available. An analysis published in 2017 found that for drugs that face generic competition, coupons increased sales by 60% and raised spending by $2.7 billion for 23 selected drugs over the five years studied.

Alternatively, a 2018 analysis predicted that copay accumulators could save payers and PBMs money but also create adherence problems, because patients would struggle to pay the maximum out-of-pocket expenses without some form of assistance, leading to a higher abandonment rate at the pharmacy counter.

It’s uncertain how big an effect the new change to plans could have on prescription drug costs in terms of getting more patients onto cheaper generics. HRI’s 2020 “Behind the Numbers” report found that most employers had already maximized the use of generics with about 85% utilization.

Additionally, at least four states have already banned the use of copay accumulators: Arizona, Illinois, Virginia and West Virginia. 

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Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Crystal Yednak

Senior Manager, Health Research Institute, PwC US

Erin McCallister

Senior Manager, Health Research Institute, PwC US

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