News & Publications

New State Copay Accumulator Laws Complicate the Coupon Compliance Landscape

Managed Healthcare Executive

John S. Linehan, Member of the Firm in the Health Care & Life Sciences practice, in the firm’s Baltimore and Washington, DC, offices, authored an article in Managed Healthcare Executive, titled “New State Copay Accumulator Laws Complicate the Coupon Compliance Landscape.”

Following is an excerpt:

In recent years, the federal and state legal requirements governing drug distribution and reimbursement have become increasingly discordant. This has stemmed in part from a politically divided Congress, which has made it difficult to pass comprehensive federal legislation, and the fact that many states have pioneered ahead with ambitious reforms. It also stems from the differing incentives and concerns facing federal and state lawmakers. While the federal government is the sole funder of Medicare and a large portion of Medicaid, and therefore acts primarily as a payer, state governments regulate insurance on the local level and are more susceptible to the influences of patients and prescribers.

This federal-state dynamic has become especially pronounced with regard to the copay coupons promoted by drug manufacturers and the copay accumulator and maximizer programs that health plans and pharmacy benefit managers (PBMs) have employed to mitigate the negative effects that coupons can have on their costs. On the one hand, coupons are prohibited under federal healthcare programs,[1] but the U.S. government has afforded plans significant leeway to implement accumulators and maximizers.

At the same time, coupons are generally permitted at the state level, but a growing number of states have quietly passed laws prohibiting fully insured plans from using accumulators and maximizers. As a result, the industry battle between drug manufacturers and payers continues to play out over an increasingly complicated and inconsistent compliance landscape.

Also see Mr. Linehan's two-part video interview in Managed Healthcare Executive, with Peter Wehrwein and Briana Contreras: “New Transparency Rules Mean Health Plans, PBMs Must Disclose Their Accumulators, Maximizer Programs,” and “Accumulator, Maximizer Regulation Picks Up at the State Level,”