CMS’s stance has long been that manufacturer-provided assistance given to patients is excluded from best price and average manufacturer price calculation for prescription drugs. However, the rise of copayment accumulators and maximizers and health insurers’ subsequent taking of this assistance rather than allowing it to count toward patients’ deductibles and out-of-pocket maximums have caused the agency to rethink its position. Precision’s Ryan Cox and Reta Mourad break down the implications of the proposed rule change, including the potential for increased patient out-of-pocket drug costs, pharma companies being on the hook for ensuring they know exactly where their assistance is going, and possible unintended consequences.

CMS Targets Patient-Assistance Programs; Rule Could Curtail Aid

CMS’s stance has long been that manufacturer-provided assistance given to patients is excluded from Best Price and average manufacturer price (AMP) calculation for prescription drugs. However, the rise of copayment accumulators and maximizers and health insurers’ subsequent taking of this assistance rather than allowing it to count toward patients’ deductibles and out-of-pocket maximums have caused the agency to rethink its position. A rule slated to take effect at the beginning of 2023 would reverse that longtime approach, potentially resulting in increased patient out-of-pocket costs for drugs and pharma companies being on the hook for ensuring they know exactly where their assistance is going, industry experts tell AIS Health, a division of MMIT. The Medicaid rebate rule allows state Medicaid programs to get the same discounts on drug prices that manufacturers offer commercial plans purchasing prescription drugs. Manufacturers pay rebates to Medicaid programs that are calculated based on drugmakers’ Best Price, which is the lowest price the manufacturer gives to most providers of health care services or items, including hospitals, HMOs and MCOs — but not patients. It includes any price adjustments, such as discounts and rebates, but not manufacturer-provided assistance to patients.

Traditionally, when a manufacturer provides copay assistance for one of its drugs, that dollar amount would count toward the patient’s deductible and out-of pocket maximum. But copay accumulator programs — also known as accumulator adjustment or variable copay programs — prevent those funds from applying to the deductible and out-of-pocket limit. Instead, when members have used all of the copay assistance available to them, their payments then start counting toward their deductible and out-of-pocket costs.

A similar type of approach is a copay maximizer program, also known as variable copay or copay optimization programs. Rather than using the accumulator approach of applying the maximum manufacturer assistance up front and depleting that contribution before the end of the year, maximizer programs will 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.

Copay accumulator and maximizer programs have proliferated in recent years. For the Managed Care Oncology Index: Q3 2021, between Aug. 24, 2021, and Oct. 11, 2021, Zitter Insights surveyed 40 commercial payers covering 114.1 million lives. Plans representing 38% of lives had implemented an accumulator program prior to 2021, while those covering 21% of lives had a copay maximizer program in place during that same time frame. In 2021, plans with 26% of lives implemented an accumulator program, and those with 28% of lives implemented a maximizer program. Plans with about three-fourths of covered lives did not differentiate the programs by therapeutic area and applied them to both retail and specialty products.

Zitter Insights and AIS Health are both divisions of MMIT.

A CMS final rule (CMS-2482-F) — referred to as the Accumulator Rule — published Dec. 31, 2020, would require that:

(1) Manufacturers must ensure that their assistance programs’ benefits “are provided entirely to the consumer.…If any of the manufacturer-sponsored assistance is diverted to the plan, those amounts should be included when a manufacturer calculates its best price,” and

(2) When manufacturer assistance is not applied to a patient’s deductible or other cost-sharing obligations, “the assistance becomes a price concession to the health plan by delaying the point at which the health plan’s contribution toward the patient’s cost sharing begins, or reducing the value of the assistance to the patient, and thus should be counted in best price and, in certain cases, the calculation of the AMP.” The rule is set to take effect on Jan. 1, 2023.

PhRMA Lawsuit Says Rule Is ‘Invalid’

On May 21, 2021, the Pharmaceutical Research and Manufacturers of America (PhRMA) filed a lawsuit (Case 1:21-cv-01395) seeking “a declaration that the Accumulator Rule is invalid, an injunction preventing the Defendants from implementing or enforcing the Accumulator Rule, and other relief as the Court deems appropriate.”

In its lawsuit, PhRMA notes that patients are not included among the providers eligible for Best Price, “presumably because Congress did not want to discourage manufacturers from offering discounts or other assistance to patients.” In 2007 regulations, CMS declared that “manufacturer-sponsored drug discount card programs, coupons and co-pay assistance” were excluded from Best Price calculation when those benefits go to patients. “Sales to patients are best price exempt,” declares PhRMA in a summary of the lawsuit. “By statute, assistance provided to patients must not affect best price for purposes of a manufacturer’s Medicaid rebates.”

According to the lawsuit, “CMS’s final rule contradicts the plain text of the Medicaid rebate statute by improperly requiring manufacturers to treat financial assistance that they provide to patients to help defray their co-pays and other out-of-pocket costs as part of the ‘price’ a manufacturer offers to commercial health insurers. Because this portion of the rule is inconsistent with the statute’s plain text and would be harmful to patient health, it is unlawful and invalid under the Administrative Procedure Act.”

Per PhRMA, “In the Accumulator Rule, CMS treats assistance offered by manufacturers to patients as if it were a price discount to health insurers, just because the insurers have figured out a way to take that assistance away from the patients for whom it was intended. That is simply not what the word ‘price’ means. A ‘price’ is the amount that a seller intentionally offers and voluntarily agrees to accept from a buyer. But here, the manufacturer does not intend to offer the financial assistance at issue to the health insurers, but rather wants it to fully benefit patients. The health insurers are acting against the manufacturers’ will. That is not what the law means when it says ‘lowest price available.’”

A source familiar with the lawsuit tells AIS Health that “as of March 28th, the parties completed briefing on their cross motions for summary judgment, and the matter is now ready for a decision by the court. Next is for the judge to decide whether he would like to hear oral arguments or if he’ll rule on the papers submitted and issue a decision. In terms of timing, it is difficult to speculate on when the judge will take the next step.”

What Stakeholders Are Most Impacted? 

Multiple stakeholders stand to be impacted by the new rule, experts tell AIS Health.

According to Rick Ford, chief product officer at InfinityRx, “stakeholders that need to prepare include pharma, administrators of patient affordability programs, patients, providers with services funded by affordability programs, foundations that will likely experience an increased need for funding and more. These are all stakeholders that will be affected if pharma limits its offering of programs that assist cost-sharing expense. ‘How’ to prepare is an exceptionally large matter that cannot be addressed within the context of this response, except to say that pharma should be investing in the review of Best Price mitigation strategies. There are viable options being developed to minimize (not eliminate) Best Price exposure.”

“Manufacturers are the obvious stakeholders directly impacted by this rule,” says Reta Mourad, Pharm.D., vice president of the access experience team at PRECISIONvalue. “However, payers may also be impacted since manufacturers have no direct insight into whether a patient receives the full benefit of a copay-assistance benefit. In instances where there is no contractual arrangement between a manufacturer and a payer, there may arise a need for manufacturers to work directly with payers to obtain this data. This would likely lead to additional complexities and may require data-sharing agreements.

‘Unintended Consequences’ May Occur 

In addition, Mourad tells AIS Health, “there may also be some unintended consequences: Smaller biotechs may discontinue using these programs because they don’t have the administrative capacity to gather the data and report accurately, which, in turn, will impact patients and caregivers who have to pay high deductibles. Providers could also be indirectly impacted, as they may need to look for alternatives for patient support through foundations or other means.”

In the final rule, however, CMS disagrees that the policy will result in manufacturers cutting back on their patient-assistance offerings.

Still, says Mourad, “While payers are solely responsible for administering these accumulator programs, manufacturers are going to bear the brunt of the negative impact in terms of determining how to identify and gather this information. Patients and providers could potentially be negatively impacted if manufacturers ultimately discontinue these assistance programs as a result of this rule, thereby increasing inequities by limiting some patients’ ability to access the medications they need.”

“For specialty drugs with government pricing that is affected by Best Price reporting, patients may be required to fund more of the cost-sharing expense that is assigned by their health plan to specialty drug services,” states Ford.

CMS Disputes Patient Impact Comments 

In response to several comments about the rule’s potential negative impact on adherence and outcomes for people with life-threatening or complex conditions who depend on financial assistance to be able to access specialty drugs, CMS replied, “We do not believe that the final policies we are adopting in this final rule will negatively impact patients with rare, life-threatening illnesses who rely on manufacturer assistance programs. Rather, we do believe that there is a corollary benefit to this proposed policy, as it might lead to reforms in manufacturer assistance programs. We understand from many manufacturers and patient groups that PBM accumulator programs are increasing in number, and that the value of these programs to the patient is diminishing. It is not clear how these programs can continue to benefit patients without some modifications and reforms.

“We believe manufacturers can implement a system to ensure the full benefit of its manufacturer-sponsored assistance passes on to the patient,” continues the rule. “By doing so, patients will continue to have access to much needed medication which will in turn increase positive outcomes and also improve adherence.”

Larry Kocot, principal and national leader for the Center for Healthcare Regulatory Insight at KPMG, points out that per CMS, “there may be multiple ways that manufacturers will be able to meet these new regulatory requirements to ensure that manufacturer patient assistance is passed through fully to the patient or consumer, such as being able to electronically capture information regarding the value of manufacturer-sponsored assistance that is being passed through in PBM accumulator programs through some type of feedback mechanism at the point of sale or by creating coverage criteria for the use of their patient-assistance programs.”

Does Pharma Know When Programs Used? 

However, contends Mourad, manufacturers establishing coverage criteria around assistance programs “would be virtually impossible in the current environment, as manufacturers and consumers do not have insights into when or how the accumulator is even applied to a medication claim; they would have to obtain this data from the insurer. Significant industry changes would also have to take place for manufacturers to be able to comply with this rule.”

Still, says Kocot, “CMS is clear that the onus is on manufacturers and the patient-assistance program (PAP) intermediaries they contract with (i.e., contracted patient-assistance brokers, prescription claims processing switches, health plans and their contracted PBMs) to implement either (1) feedback loops on transactions to collect data on whether the patient’s coverage does or does not pass through the value to the patient, or (2) redesign of their programs to have the patient pay full costs upfront at point of sale and seek reimbursement from the PAP afterwards.” Without programs ascertaining 100% pass through to patients, pharma firms must include those concessions in their Best Price and AMP calculations.

CMS maintains that “the policies we are adopting in this final rule could help avoid these concerns [around patient adherence and high out-of-pocket costs] because it will improve transparency in drug pricing and will ensure that the full value of the manufacturers-sponsored assistance programs is passed on to the patient. We believe this will also help assure patient compliance and adherence with medications.”

In response, Ford asserts that “if the final rule prompts pharma to aggressively implement rules that protect the integrity of the patient affordability programs that they sponsor, the circumstances outlined by CMS are a very possible outcome. Pharma has a range of options they can implement to protect the integrity of their affordability programs; however, pharma has largely deferred for a number of reasons, many of which are tied to concerns that competing drugs will not follow suit and health plans will favor coverage of drugs that allow program proceeds to be diverted for the benefit of health plans’ interests.”

In addition, says Ryan Cox, R.Ph., vice president and director of the access experience team at PRECISIONvalue, CMS “seems to imply that the pharmaceutical manufacturers, rather than the payer, are responsible for the impact of accumulator programs. The CMS comment further appears to imply that manufacturers are using their assistance program to provide additional discounts to the payer, rather than to the patient. In my opinion, it appears that CMS does not understand how the accumulator programs work or who is responsible for administering them. If the intent of CMS is to improve transparency and help assure patient compliance and adherence with medications, they should include language that puts the requirement to ensure the full value of the manufacturer-sponsored assistance program is passed on to the patient on the payer, rather than the manufacturer. By putting a generalized, new data reporting requirement of manufacturers, CMS may be inadvertently altering or ending the programs for patients who most need them.”

“High-cost specialty drugs, particularly for rare and orphan diseases with no or limited treatment alternatives, typically offer patient assistance. Even within therapeutic areas with multiple alternatives, it’s unlikely that those brand alternatives do not also offer similar patient-assistance programs,” points out Mourad. “The implications are similar: Patient access and specialty drug uptake could be impacted across the board, since the patient copay-assistance programs are available for nearly all specialty medications.”

For more information on the Zitter Insights data, contact Jill Brown Kettler at Contact Cox and Mourad via Tianna Bradford at, Ford at and Kocot through Matt Weiss at mweiss@kpmg. com.

by Angela Maas

AIS Health