Millions of Americans rely on prescription medications to manage their illnesses. According to polling conducted by the Kaiser Family Foundation, roughly sixty percent of adults say they currently take at least one prescription medication, with a quarter of those taking four or more prescription drugs. Meanwhile, pharmacy benefit managers (PBMs) are putting the health of Americans at risk with schemes to divert copay assistance funds from patients and a lack of transparency.
Spending on health care is soaring. The Hill reported on December 15, 2022, “U.S. spending on health care grew by 2.7 percent to reach a total of $4.3 trillion in 2021, or around $12,900 per person, according to new figures from the Centers for Medicare & Medicaid Services (CMS).” That follows a 2020 where those same costs spiked by 10.3 percent. Any activities that increase prices on health care hits the pocket hard, because the cost of health care is continually increasing every year at a rate much higher than inflation.
Pharmacy benefit managers are middlemen - unique to the United States - which negotiate the terms between insurance companies and drug manufacturers for prescription drug coverage. PBMs have been warping the market for life saving medications because they are compensated based on convoluted mechanisms such as manufacturer rebates. This means PBMs have an incentive to prioritize drugs with higher rebates on their coverage formularies rather than lowering list prices, which would be more transparent and beneficial to the patient. Three PBMs – CVS, Express Scripts, and OptumRx – control 80% of the market.
Patients rely on copay assistance, often provided by drug manufacturers, to afford their out-of-pocket costs. This assistance is typically provided for and used by people with chronic diseases, such as HIV, arthritis, and multiple sclerosis, to help them offset the high cost of expensive specialty medications and medications without generic equivalents. Copay assistance plays a key role in ensuring that patients adhere to their doctor prescribed medications. Patient adherence is important for maintaining a positive outcome.
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However, in recent years, PBMs and the insurers have been attacking copay assistance – but only when it does not benefit their bottom line. Complex schemes set in place by PBMs, called copay adjustment programs, prohibit copay assistance from counting towards a patient’s deductible or out-of-pocket maximum, even when the insurer or PBM keeps the money. These schemes threaten patients’ access and adherence to medications and place an unaffordable out-of-pocket financial burden on patients.
According to polling conducted by Kaiser Family Foundation, roughly 30% of people haven’t taken their medicine as prescribed due to costs. And it only gets worse as out-of-pocket costs increase. According to a study conducted by IQVIA, 61% of commercially insured patients did not fill their new prescription when their out-of-pocket costs exceeded $250.
The companies utilizing copay adjustment programs often operate under the radar of both patients and policymakers to avoid scrutiny of their business practices. And some take it a step even further. SaveOnSP, a partner of PBM Express Scripts, for example, uses high-pressure telemarketing to convince patients to enroll in specific copay assistance programs to receive their medications. Programs like this leave patients between a rock and a hard place: if they enroll, their prescriptions are covered, but the copays don’t count toward their annual deductible and out-of-pocket limit, leaving them exposed when they need other health care. If they choose not to enroll, then their specialty medication is not covered by the insurance plan at all.
Some state legislators have taken action to protect vulnerable patients and stand up to PBMs. In 15 states and Puerto Rico, copay adjustment programs have been outlawed. Using a recent Supreme Court decision, many states are exploring other ways to make prescription drugs more affordable and to reduce the overreach of the PBM industry.
Additionally, lawmakers on Capitol Hill also want to protect patients. The HELP Copays Act, H.R. 5801, bipartisan legislation that would outlaw copay accumulator and maximizer adjustment systems, is likely to be reintroduced in the new Congress.
In this instance, Republicans can seize the high ground on health care policy by taking a stand against PBMs and their policies. By standing up for vulnerable Americans and taking a stand against patient assistance diversion programs, Republicans have the opportunity to demonstrate their commitment to ensuring that all Americans have access to the care they need and make a positive impact on patients across the country.
Peter Mihalick is former legislative director and counsel to former Reps. Barbara Comstock, Virginia Republican, and Rodney Blum, Iowa Republican.
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