John S. Linehan, Member of the Firm in the Health Care & Life Sciences practice, in the firm’s Baltimore and Washington, DC, offices, was interviewed by Managed Care editor Peter Wehrwein on the topic of copay accumulators, copay coupons, and copay maximizers.
Following is an excerpt:
Hello, we are on the phone with Jack Linehan at Epstein Becker and Green. Jack has written several pieces for Managed Care about copay accumulators. He’s generously agreed to join us on the phone this afternoon to talk about them a little bit. First off Jack, how is it that you have developed this expertise in copay accumulators?
Thank you Peter. Thank you for having me. My practice really focuses on drug distribution and reimbursement issues. Drug copay coupons have been a very big issue, a very controversial issue for many years now. I’ve been advising clients with respect to coupons but more recently in the past few years these accumulators have really started to develop. This is a very quickly evolving issue; the laws are still in flux and so we have several clients who seek our advice on the landscape and where the law may be going in this area.
From coupons to accumulators, that makes sense. For those of us who are just beginning to understand copay accumulators, could you maybe give us a one on one on how they work?
Sure, again, it’s important to step back and first look at coupons themselves. Drug manufacturers have long used copay coupons as a means to facilitate access to branded drugs that are reimbursed under commercial plans, not under the federal healthcare programs where they’re actually prohibited. Beneficiaries have used these coupons to pay down their cost sharing obligations and reduce their out-of-pocket cost at the pharmacy point of sale when they pick up their drugs. However, insurers, PBMs, and employer sponsors have really opposed coupons because they undercut their formulary tools which they use to try to promote cost-effective prescribing from doctors and often utilization by beneficiaries. There’s a lot of money at stake here, by some estimates manufacturers provide over 10 billion dollars annually in coupon payments to patients and beneficiaries.
In recent years, I’m talking about the last two or three years, due to technological advances, plans and PBMs have been better able to identify coupons from being applied at the pharmacy point of sale. They’ve used this information to develop accumulators, which are mechanisms that prevent coupons from counting against the beneficiary’s deductible and/or maximum out of pocket cost. Once the coupon is exhausted, the beneficiary must then cover the entire amount of his or her deductible before plan benefits kick in. While these are of recent origin, accumulators are very much in widespread use today. A recent report found that more than 90 million commercial lives are covered by payers with accumulator programs.