More than 90 million people are covered by payers with a copay accumulator program—but patient advocates are fighting back. Jeremey Shafer, Senior VP, Access Experience Team, Precision for Value, believes the advocates will be successful. Discover why in Radar on Specialty Pharmacy.

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Payers are continuing to implement copay accumulators and copay maximizers in an effort to counter copay assistance from pharmaceutical manufacturers, according to a recent survey. Research shows these programs target specialty drugs almost exclusively, so while they may provide short-term benefits to payers, in the long run they may result in higher downstream costs. As accumulators and maximizers come under fire from patient-advocacy groups and other stakeholders for their potential impact on patient outcomes, a new state law essentially banning these programs, as well as potential legal challenges, may pose difficulties for payers implementing them.

A Zitter Insights report shows that more than 90 million commercial lives are covered by payers that have a copay accumulator program — and it doesn’t look like these arrangements are going away any time soon. The data are based on July 2018 payer feedback from 50 commercial payers. A new survey currently is in the field, and results are expected soon. Zitter and AIS Health are owned by MMIT.

Among other survey findings on accumulators are the following:

  • More than 75% of these payers do not exclude preventive agents in these programs.
  • Half of respondents do not have a maximum out-of-pocket amount, but 46% do. Five percent say they plan to have one in the future.
  • 75% of payers with these programs have not differentiated them by therapeutic classes or drugs.
  • 77% of 52 physician respondents are not at all or only slightly familiar with these programs, with 47% of 66 surveyed practice managers falling within the same category.
  • 64% of providers say accumulators will have some, high or very high influence on their prescribing behavior.

The Zitter report also explores the use of a similar kind of program: copay maximizers, which also may be known as variable copay or copay optimization programs. Rather than using the accumulator approach of applying the maximum manufacturer copay assistance up front and depleting that contribution before the end of the year, maximizer programs will maximize and distribute 100% of available manufacturer copay offset funds over 12 months. This approach allows patients to pay less than they would in an accumulator program if they participate in a manufacturer’s copay offset program, never hitting their annual deductible and out-of-pocket max.

According to Zitter research, among 51 payer respondents covering 177.9 million lives, payers covering more than 50 million commercial lives have implemented a copay maximizer program. But payers representing 58% of covered lives say they do not have plans to incorporate maximizers within their benefits offerings. Among payers with these programs, 52% differentiate by therapeutic class, excluding certain conditions.

Melinda Haren, a senior consultant at Zitter Insights, notes that accumulators and maximizers are focused on specialty drugs, particularly those products that are adjudicated through the pharmacy benefit. When payers apply these arrangements to drugs under the medical benefit, they are mandating the use of a specialty pharmacy as opposed to allowing providers to buy and bill, she says. “Most of the time they apply to all specialty drugs, including drugs for rare diseases and oncology drugs.”

The savings for payers — and the additional burden on manufacturers — are not insignificant. “If you look at some of the data,…you’ll see that in a copay accumulator scenario, the change in the percent of drug that a manufacturer pays for moves from 16% of the drug to a full 41%, with the patient picking up 16%. So a staggering 58% gets moved from what was traditionally paid by the payer to the patient and the manufacturer,” points out Lisa Kennedy, Ph.D., chief economist at Epiphany, a company that performs health economics, reimbursement and market access studies. “Also there is a knock-on reduction in payer costs if a patient decides to switch or abandon a particular medication.”

Drugmakers Have Little Recourse

But drugmakers can do little to limit the use of these programs, at least in the short term, says Haren. That said, some are looking into initiatives that could do that, “but they take time,” she tells AIS Health. “In general, we’re telling our manufacturer clients” that they “need to have an awareness” of how their brand drugs are affected by these programs, she says. “So little is understood” about these arrangements, and that information is critical for budget planning.

However, one recent effort may prove to be effective against accumulators: On March 21, Virginia Gov. Ralph Northam (D) signed S.B. 1596/H.B. 2515, which states, in part, “When calculating an enrollee’s overall contribution to any out-of-pocket maximum, deductible, copayment, coinsurance, or other cost-sharing requirement under a health plan, a carrier shall include any amounts paid by the enrollee or paid on behalf of the enrollee by another person.”

The law will go into effect Jan. 1, 2020, and will impact individual and group health care plans.

“People with serious and chronic health conditions, such as HIV and hepatitis, who take costly prescription medications rely on financial assistance to afford their high copays and meet their deductible,” said Carl Schmid, deputy executive director of The AIDS Institute, in a statement. “We are thankful to the leadership demonstrated in the Commonwealth for standing up for patients and against the insurance companies and the pharmacy benefit managers (PBMs). We hope other states follow Virginia’s lead and protect patients from high out-of-pocket drug costs.”

This approach to counter accumulators “will likely be effective, at least in the near term,” maintains Jeremy Schafer, Pharm.D., senior vice president of payer access solutions at Precision for Value. “If more states end up passing the same legislation, it will become difficult, particularly for national or large regional payers working in many states, to use accumulator programs. However, like all legislation, the devil is in the details. The laws may only apply to specific insurance offerings or groups and may not be as broad as assumed. Even if the legislation spreads to other states, or is acted on by Congress, chances are that PBMs and payers may find loopholes.”

Schafer tells AIS Health that at least 10 other states are considering similar legislation, including West Virginia, where a bill passed last month and is awaiting the governor’s signature.

“The accumulator tactic is getting blowback,” notes Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates, “and I expect more of the same from other states, because (1) the PBM and health insurance sectors are not understood or respected, much less loved, by the public; (2) people are personally sensitive to high and increasing out-of-pocket costs due to deductibles, cost sharing and out-of-pocket maximums — that is, that person with the catastrophic disease and unpayable cost share could have been me — and (3) supporting legislation to protect people with catastrophic disease increases politicians’ popularity with their constituents.” 

As far as payers’ response to the bill, “It depends on how much business these payers have in state exchanges and how competitive the market is,” for example, says Schafer. “Payers could simply increase premiums in state exchanges and then inform members that the increase is due to state legislation. In addition, payers could opt to limit or refuse copay cards and assistance altogether, particularly for specialty drugs that would be required to be dispensed from the specialty pharmacy aligned to the PBM.”

With accumulator programs tending to target specialty drugs, people on those therapies “have complex conditions that must be carefully managed,” Ami Gopalan, Pharm.D., vice president of clinical and strategic services at Precision for Value, points out. “Nonadherence may result in the underlying condition not being controlled, which could lead to more expensive health care resource utilization, such as emergency room or hospital visits. This creates additional costs for payers and perhaps for patients in the form of medical bills. Employees with poorly controlled conditions can experience additional work absenteeism and presenteeism, which can be an additional cost for employers.”

Multiple Complications for Patients Exist

Kennedy says that “when you are looking at some patients, it isn’t just about one medication — take a patient with cardiovascular disease and diabetes — they might have five medications or more. When a copay accumulator is implemented by their payer — it could theoretically affect all of their medications. Do you really want a patient on medications for diabetes and heart disease/heart failure to stop taking a given medication? These conversations happen all the time where a patient will ask their doctor which medication they could go without or how they could ration a medication.”

Gopalan tells AIS Health that “educating payers on the impact these programs have on patient adherence as well as how the programs create uneven benefit design based on condition…may be influential,” as may considering how accumulators factor into contract negotiations with payers.

However, the only issue with this is that while these outcomes may occur over a two-to-three-year horizon, employers generally are focused on costs for the current year only, says Haren. By the time those impacts are felt, “the odds are pretty good” that affected employees will have changed jobs and have different employers by then. “There is a disconnect in the way benefits are bought,” she maintains.

“These copay accumulator programs may well be of interest to employers because they have the potential to dramatically reduce pharmacy costs, but they should also look at knock-on effects on increased use of other health care services should patients decide to forgo a prescription, such as poorer outcomes; they should also consider possible legal challenges,” Kennedy tells AIS Health.

Legal Challenges May Arise

For example, a recent report from Aimed Alliance, a nonprofit supporting health care consumers and providers, highlights some risks with accumulators. Such programs, it says, “potentially violate federal laws,” including the Affordable Care Act, the Federal Trade Commission Act and the Employee Retirement Income Security Act, and their implementing regulations. In addition, says the report, “health insurers may face investigations from state insurance commissioners and lawsuits if they implement copay accumulator programs that violate certain states’ unfair and deceptive trade practice acts. These insurer investigations and lawsuits may impact employer-sponsored health plans.”

For these reasons, the report recommends that employers do not implement copay accumulator policies. If, however, they do adopt them, it recommends offering at least one plan option that does not include accumulators, as well as not offering them in high-deductible health plans. If an employer disregards this advice, the report details “certain guardrails” that the company should implement.

Asked about the impact that payer programs are having on negotiations between them and manufacturers, Rubinstein replies, “Pricing negotiations between manufacturers and payers, copay accumulator programs, government pushback against brand products’ high prices and the CMS proposed rule regarding rebate safe harbors may all come together to cause manufacturers to rethink the dynamic between a brand product’s list price, rebate, copay coupon program value and patient-assistance program value. In my view, that is the dynamic to watch closely towards the end of 2019 and into 2020.”

Kennedy agrees: “We are likely to see a ‘reset’ over the next 24 months around drug pricing, rebates and copays. There is a lot that is under discussion, but what I think is most important is how this benefits consumers and patients. The average consumer appreciates and benefits from copay assistance — in contrast, vast consolidation amongst providers is leading to overall higher prices for health care provision — and even where payers also exhibit strong consolidation allowing better negotiation with providers, this doesn’t lead to lower prices for consumers.”

‘Everything Is in the Spotlight Right Now’

“I think the important thing for payers and self-insured employers to understand is that everything is in the spotlight right now — from greater understanding of rebates, who they are passed on to and the overall costs that patients incur,” says Kennedy. “Do payers and employers really want to be seen as the one stepping in and taking a patient’s copay assistance for themselves? It doesn’t look good and, moreover, names such as the ‘Benefit Plan Protection Program’ and ‘Out of Pocket Protection Program’ are misleading to patients who can only interpret these as something that is protecting them and their OOP versus something that is, in fact, designed to do the opposite.”

Read the Aimed Alliance report at Contact Gopalan and Schafer via Tess Rollano at, Haren at, Kennedy at and Rubinstein at

by Angela Maas