New copay ruling could impact millions of prescription drug users. What to know
When Alyssa Dykstra was just 2-and-a-half years old, she was diagnosed with arthritis.
By the time she was in college, her doctor had prescribed her a biologic — a complex treatment derived from live cells, cultures or blood — to manage her symptoms.
Because biologics are considered a specialty medication without a generic alternative, they typically carry lofty out-of-pocket costs for patients. To combat these obstacles, manufacturers often offer patient support to help with these costs.
Dykstra paid for her medication with ease thanks to assistance from the manufacturer. She received a yearly card with an allotted amount of money to use toward her otherwise costly, but necessary, medication.
Millions of other patients in the U.S. rely on similar programs to afford their medications. But a federal rule enacted in 2021 has put constraints on these assistance programs.
For years, Dykstra used the card to pay for her medication, and by the time she had used the card’s funds, she had reached her deductible and could afford to pay for her medication and other healthcare expenses.
Then, she switched to her husband’s employer-provided coverage in 2022 — and got an $850 bill from her doctor.
“I did my usual routine,” Dykstra told McClatchy News. “It’s a whole strategy, right? So I’m like, ‘Alright, I gotta fill my medication first, use my copay assistance, knock out my deductible. Then, I can go to the doctor for these other doctor visits.’”
Dykstra went through the “whole procedure,” finalizing all the authorizations she needed for her medication and copay assistance. Everything looked right when she checked her online portal, so she scheduled a doctor’s appointment.
“Two weeks after that, maybe, I get a bill for almost $850, and I’m like, ‘That’s so strange,’” Dykstra said.
After weeks of back and forth with her insurance company, Dykstra realized what happened: Her plan had applied a copay accumulator adjustment, failing to count any of her medication payments toward her deductible. She was never notified of the change.
Now, a Sept. 29 ruling in the U.S. District Court for the District of Columbia. has struck down the Trump-era federal rule allowing insurance companies to exclude copay assistance card payments from beneficiaries’ deductibles.
Here’s what you need to know about the recent ruling.
What is copay assistance?
Manufacturers can offset medication prices by providing patients with copay assistance cards. These programs typically only cover expensive medications without a generic alternative.
Drug manufacturers can offer patients copay cards to cover some or all of the out-of-pocket costs associated with the prescription. These cards usually have a time and spending limit, offering patients support in tandem with their insurance coverage.
These payments are supposed to count toward a patient’s deductible, so by the time their allotted funding from their drug manufacturer runs out, their medication is covered by insurance and the cost is much more palatable and attainable.
In 2022, copay cards covered $19 billion worth of out-of-pocket costs for patients, according to Carl Schmid, executive director at the HIV + Hepatitis Policy Institute.
“Imagine if we didn’t have that? The American people would have to come up with 19 more billion dollars,” Schmid told McClatchy News.
What are copay accumulator adjustment programs?
Although copay cards help patients access necessary prescriptions, insurance companies argue that by offering assistance, manufacturers are encouraging patients to use brand-name medications as opposed to cheaper, generic versions while justifying sky-high drug costs.
Insurance providers argue that the assistance programs are “strategic marketing tools” used by drug manufacturers, according to a 2023 amicus brief filed by America’s Health Insurance Plans.
“No one should need a coupon to afford a life-saving drug,” AHIP said in a news release about the brief March 23. “Far from working to lower the price of drugs, co-pay coupons for brand-name drugs are profit maximizers for drug manufacturers that raise health care costs (and thus health coverage premiums) for everyone, including the patients who are ostensibly helped.”
To combat this, insurance plans began implementing “copay accumulator programs.” When implemented, these programs allow patients to continue using their copay cards, but payments made with the cards do not count toward a beneficiary’s deductible.
“Accumulators let patients benefit from the coupon discount, helping constrain, not inflate, prescription drug prices,” AHIP spokesperson David Allen said in an email to McClatchy News. “Coupon accumulators hold manufacturers responsible for the list price of their drugs without increasing patient cost-sharing.”
In 2021, the use of copay accumulators was authorized with a federal rule known as the Notice of Benefit and Payment Parameters.
Under the regulation, around 83% of all plans adopted copay accumulators, Schmid said.
“Not to say that … it’s been implemented, sometimes the plans have them and they don’t always implement them,” Schmid said. “But the insurers are collecting more and more money.”
No more copay accumulators
Now, after a months-long legal proceeding lead by the HIV + Hepatitis Policy Institute, the 2021 ruling was struck down.
The latest decision will help millions of patients who rely on specialty medications and manufacturer copay assistance, Schmid said.
“The ramifications of this case are huge,” he said.
Patients who use a copay card to pay for their specialty medication should check their accounts to ensure that any accumulator adjustments have been removed, according to Schmid.
“I wouldn’t count on them getting a notice or something automatic. I think that people who rely on copay assistance should make sure that it is being counted now,” he said.
Just as insurance plans did not notify customers when their copay assistance was no longer counted, Schmid said it’s likely there will be no notice of the latest change to the system, so patients should double-check and stay aware of plan changes going into 2024.
This story was originally published October 25, 2023 at 12:04 PM with the headline "New copay ruling could impact millions of prescription drug users. What to know."
