State Legislatures Spring Ahead with Restrictions on Drug Copay Accumulators

Managed Care

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 Care, titled “State Legislatures Spring Ahead with Restrictions on Drug Copay Accumulators.”

Following is an excerpt:

Pharmaceutical industry observers have been riveted by recent reform proposals introduced by the Trump administration to regulate drug rebates—the backend price concessions that drug manufacturers pay to plan sponsors and PBMs to influence formulary position and market share. In the meantime, important and yet less noticed reforms are advancing at the state level that relate to copay coupons—the front-end price concessions that manufacturers furnish to patients to reduce out-of-pocket costs on drug purchases.

For several years, states have carefully deliberated over whether to regulate manufacturer copay coupons, which may facilitate patient access to branded drugs by reducing out-of-pocket expenses but raise costs for commercial insurers since they promote more expensive utilization.

But as drug pricing issues have come to a boil, lawmakers in certain states are now taking a bolder approach. Since the start of the year, several states have been considering bills that would broadly prohibit the copay accumulator programs that health plans and PBMs have used to combat coupons and the negative effects that coupons have on their costs. These reform measures—which have so far enacted into law in Arizona, Virginia, and West Virginia—could substantially upend commercial drug benefits with effects, both good and bad, on a wide range of stakeholders.