Our latest update finds that for 2022, about 40% of commercial lives have adopted these benefit designs. Accumulator adoption has plateaued, while maximizer use has overtaken accumulators. Patients who take a single-source, brand-name specialty drug for autoimmune conditions, multiple sclerosis, and oncology increasingly face these benefit designs. Check out the plan and patient data below.
Patients are caught in the middle of a complex battle among insurers, PBMs, and drugmakers. They are rightfully unhappy that their plans are grabbing the copay support funds. That’s why legislation, lawsuits, and patient advocacy are growing. Manufacturers are also pushing back on plans’ copay games.
These reactions will slow the financial windfall for plans and PBMs—and raise the risk that plans will push the ethical boundaries even farther.
This article is adapted from Chapter 6 of our forthcoming 2023 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. Additional details are in the full report.
FUNDS FOR ME, NOT FOR THEE
A manufacturer’s payments from a copay program typically count toward a patient’s deductible and annual out-of-pocket maximum. Once these annual limits are reached, the plan pays for all subsequent prescriptions with no further out-of-pocket costs for the patient.
About five years ago, plan sponsors and PBMs began adopting benefit designs that redirect the value of a manufacturer’s payments away from the patient and toward plans. These approaches have altered plans’ traditional approach to—and views of—copay offset programs.
As a reminder, there are two general approaches:
- Copay accumulator adjustment. The value of a manufacturer’s copayment support payments is excluded from the patient’s annual deductible and out-of-pocket maximum obligations. Accumulators reduce the plan’s cost by shifting more of a prescription’s expenses to patients and manufacturers, because the plan effectively captures the value of two deductibles. PBMs typically offer accumulator solutions directly to their plan sponsor clients.
- Copay maximizer. The patient’s out-of-pocket obligations are set to equal the maximum value of a manufacturer’s copayment program. To avoid these extraordinary costs, the patient must enroll in a separate copay maximizer program. Maximizers reduce the plan’s cost by shifting drug costs to manufacturers. However, these programs typically shield patients from significant (or any) out-of-pocket exposure.
To implement a maximizer, plans will deem certain specialty drugs to be “non-essential health benefits.” Non-essential drugs are still covered by the plan, but they are not subject to the Affordable Care Act (ACA) Essential Health Benefit requirements and can be removed from the out-of-pocket maximums required by the ACA. For 2022, the ACA limited maximum out-of-pocket spending to $8,700 for an individual plan and $17,400 for a family plan. For example, a maximizer could set the patient’s total out-of-pocket obligation to $24,000, or $2,000 per month.
The chart below updates our analysis of the rapid growth and adoption of accumulators and maximizers. MMIT has again graciously provided us with data from its copay accumulator and maximizer research. The 2022 data include 35 PBMs and payers representing 121.5 million commercially insured covered lives. For more information about this valuable resource, please contact Jill Brown Kettler (jkettler@mmitnetwork.com).
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These data highlight the prevalence of these programs:
- For 2022, 89% of commercially insured beneficiaries are enrolled in plans with copay accumulators available in the plan design, while 76% are enrolled in plans with maximizers in the plan design. That is a significant increase from the 2018 figures.
- Not all plan sponsors have fully implemented these programs. For 2022, we estimate that only 39% of covered lives are in plans that have implemented accumulators, while 41% are in plans that have implemented maximizers.
- Over the past four years, the adoption of maximizers has outstripped accumulators. Maximizers often impose minimal out-of-pocket costs on beneficiaries, while allowing plan sponsors to extract the full funded value of a manufacturer’s copay support program. With maximizers, patients therefore avoid some of the adherence and affordability problems of accumulators.
Copay accumulators and maximizers have the greatest impact on patients taking specialty drugs. These products have the highest out-of-pocket costs and most well-funded copay offset programs. For a patient perspective, I highly recommend IQVIA’s recent report: Five Years and Counting: Deductible Accumulators and Copay Maximizers in 2022. (free download)
The chart below uses data from the IQVIA report to show the share of commercially insured patients who were taking brand-name drugs in three specialty therapeutic areas and had a copay accumulator or maximizer applied to their benefit. One in five patients with multiple sclerosis and oncology faced an accumulator, compared with one in seven patients with an autoimmune disease. Maximizer prevalence grew quickly, from 4% to 5% of patients in 2019 to 13% to 15% of patients in 2022.
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In recent years, copay maximizer programs are extracting a greater value of copay support early in the benefit year to avoid detection by the manufacturer. Consider oncology products. Per page 9 of the IQVIA report, the share of patients having the maximum copay funds extracted in fewer than six prescriptions has grown, from 6% of patients in 2019 to 38% of patients in 2022. Meanwhile, the share of patients having the maximum extracted after 12 or more prescriptions has dropped, from 81% in 2019 to 35% in 2022.
Patients also face troubling health equity issues. A separate study found that benefit plans with copay accumulators and maximizers pose a disproportionate burden on historically marginalized populations and people of color. In other words, non-White patients appear to be disproportionately impacted by the loss of copay assistance.
BATTLE ROYALE
Use of maximizer programs has exploded due to the potent combination of payer savings and PBMs’ profits:
- Most payers now view copay programs as a piggybank, consistent with the survey data that I reviewed in How Copay Accumulators and Maximizers Have Changed Payers’ View of Copay Support. For example, CVS Health reported that specialty trend was −12.5% for plans that used its PrudentRx maximizer partner, compared with a +7.4% trend for nonparticipating plans.
- As I explained last year, PBMs have powerful incentives to prefer maximizer programs over other plan alternatives for managing specialty costs. Maximizer programs also generate vendor fees that can be 25% or more of the value of a manufacturer’s copay support program. I suspect PBMs can capture a majority of these fees from their external vendors. Consequently, copay maximizer programs have become an element of PBMs’ specialty pharmacy profits. See Section 11.2.3. of our forthcoming pharmacy/PBM report for our deconstruction of the major sources of PBM profits in 2022.
During the Drug Channels Outlook 2023 video webinar, I outlined the factors that will slow down the gravy train in 2023:
- Patients are rising up against these benefit designs. Three patient advocacy organizations—the HIV and Hepatitis Policy Institute, the Diabetes Patient Advocacy Coalition, and the Diabetes Leadership Council—have sued the U.S. Department of Health and Human Services over its rule regarding accumulators in marketplace exchange plans. More than 60 patient and provider groups have formed the All Copays Count Coalition. Ed Silverman at STAT recently highlighted the challenges facing cystic fibrosis patients in ‘Caught in the middle’: A battle between Vertex and insurers is leaving cystic fibrosis patients with crushing drug costs.
- Politicians are responding to their constituents. As of January 2023, 15 states have passed laws that ban or restrict the use of accumulators in individual and small group healthcare plans. (These state laws apply only to fully insured plans and those purchased through a health insurance marketplace.) By January 1, 2024, at least 13% of the total U.S. commercial market—18.8 million individuals—will be enrolled in plans that must count any form of copay assistance toward patient cost sharing limits.
- Manufacturers are pushing back on programs that divert funds from their copayment support programs. Manufacturers’ tactics include offering direct-to-patient rebates for out-of-pocket spending, using debit cards instead of copay programs, implementing per-claim caps, lowering copay support benefit amounts, and limiting copay support access when plans use accumulators and maximizers. They are also choosing to not disclose copay program limits, to make it harder for PBMs to implement accumulator and maximizer programs. Some manufacturers have changed their programs’ Terms and Conditions to exclude members with a copay maximizer from their copay programs.
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