As prescription drug prices continue to soar, the pharmacy benefit managers that health insurers employ to negotiate prices and process medications are instead pushing costs onto patients who can ill afford to bear them.
One recent cost-shifting strategy that’s quickly become pervasive is especially painful for the millions of patients with expensive-to-treat rheumatic diseases: PBMs are limiting what costs are counted toward patients’ annual insurance deductibles and out-of-pocket maximums.
That means patients, already struggling with the staggering financial and physical toll of their disease, may never reach the point where insurance covers all of their care for the rest of the year. Instead, they must keep making copayments of hundreds or up to thousands of dollars to receive their medication. As a result, many patients delay care or stop taking their medication altogether, leading to disease flareups, worsening health, disability and even premature death.
As a rheumatologist, I’ve witnessed how the disproportionately high burden of drug costs on patients with rheumatoid arthritis, lupus and other complex, chronic rheumatic diseases leaves many unable to afford the huge copays for specialty medicines they desperately need. This often hastens their decline as the disease causes irreversible joint and tissue damage.
How did we get to this point?
Originally, copayments and other out-of-pocket expenses were intended to nudge patients to make wiser choices in their health care spending. But that’s rarely possible for patients needing expensive specialty medicines, about 95% of which have no generic or other cheaper alternative.
Meanwhile, over the last couple of decades pharmaceutical companies increasingly have offered copay coupons and other financial assistance to help cover part of patients’ copayments. Starting in 2018, PBMs began pushing back by refusing to count financial aid from drugmakers as part of the patient’s share of the medicine bill. The insurers still accept drugmaker financial aid as part of the patient’s copayment, but pocket that money instead of counting it toward the patient’s annual deductible and cost-sharing limit. Eventually, the drugmaker’s financial aid ends, but many patients still haven’t met their spending limits and must shell out even more for copayments.
More than 83% of Americans covered by U.S. commercial insurers are now in plans using this strategy, known as copay adjustment or copay accumulator programs, according to a May 2022 report by healthcare consultant Avalere Health.
This situation disproportionally hurts the most vulnerable patients, with one recent survey finding that 69% of those relying on copay assistance programs have incomes below $40,000 per year. Meanwhile, research shows even relatively small increases in patients’ out-of-pocket expenses cause many to not refill prescriptions, risking their already precarious health.
In addition, due to an Affordable Care Act loophole affecting employer-sponsored health plans, PBMs can unilaterally declare some categories of drugs—usually expensive specialty medicines—as nonessential even if they are life-saving, so patient copayments don’t count toward annual deductibles and out-of-pocket spending limits.
There’s a good solution to both problems: a bipartisan bill called the Help Ensure Patient (HELP) Copays Act. Introduced in 2021, the legislation would lower patients’ out-of-pocket drug costs and ensure they can afford the necessary, often life-saving medications their doctors prescribe.
Specifically, the bill would require insurers and PBMs to count all third-party financial assistance, no matter the source, toward meeting patients’ deductibles and annual spending limits. Currently, only 11% of people with commercial insurance have that protection.
The HELP Copays Act also would remove the loophole allowing PBMs to deem some drug categories as nonessential health benefits. Currently, PBMs needn’t count any copayments for those drugs toward spending limits and could even refuse to cover those drugs at all.
As of May, at least 14 states have banned insurers and PBMs from using copay accumulator programs in state-regulated health plans. Now congressional leaders must act to help patients nationwide with rheumatic diseases and other expensive conditions better afford their medicines.
Rebecca Shepherd, M.D., is a practicing rheumatologist at Lancaster General Health in Lancaster, Pennsylvania. She is the Chair of the American College of Rheumatology’s Insurance Subcommittee.