Court strikes down Trump-era rule that allowed insurers to not count copay assistance

Patient advocacy groups are declaring victory after a federal judge struck down a Trump-era policy that allowed health insurers not to count drug manufacturer copay assistance toward a beneficiary’s out-of-pocket costs.

That policy allowed health plans to increase out-of-pocket prescription drug costs for consumers, advocacy groups claimed.

The case—brought forward by three patients, the HIV+Hepatitis Policy Institute, the Diabetes Leadership Council and the Diabetes Patient Advocacy Coalition against the Department of Health and Human Services—will now only permit insurers to use copay accumulators for branded drugs that have a generic equivalent, if allowed by state law. Copay accumulators are features within insurance plans where manufacturers' payments do not count toward a patient’s deductible or out-of-pocket maximum, according to the American Society of Clinical Oncology.

In 2021, the Notice of Benefit and Payment Parameters rule authorized these practices, which outline insurance regulations for Affordable Care Act exchange plans, but Judge John D. Bates in the U.S. District Court for the District of Columbia struck down that ruling on Friday.

“We are thrilled that the Court has taken the side of patients who have been struggling to afford their prescription drugs due to the greedy actions of insurers and their PBMs,” said Carl Schmid, executive director of the HIV+Hepatitis Policy Institute. “We call on the Biden administration and states to immediately enforce this decision and not take any further steps to undermine the copay assistance that allows patients to access their essential medications.”

“While this victory will certainly help millions of patients, it is a shame that so many have been forced to pay thousands of dollars in extra costs each year for their prescription drugs forcing us to take this legal action,” said George Huntley, CEO of the Diabetes Leadership Council and the Diabetes Patient Advocacy Coalition. “It is imperative that the Biden administration now support the American people by precluding big insurers and their PBMs from denying patients the benefit of all forms of support they receive in paying for their critical medicines.” 

Analysis from IQVIA found that the amount of copay assistance totaled nearly $19 billion last year, according to a news release. A survey of commercial plans also showed that 83% of beneficiaries are enrolled in plans that use copay accumulators, often increasing costs for patients who need critical prescription drugs.

The court dismissed insurers’ claims that copay assistance reduces how much enrollees pay for drugs. Instead, it sided with the plaintiffs who said insurers got to determine whether copay assistance is included in cost-sharing.

Plaintiffs brought forward the case in August 2022.