Massachusetts Health Policy Commission Supports Extending State’s Co-pay Assistance Programs
A Massachusetts law that allows patients to seek assistance from manufacturer co-pay assistance programs (coupons and discounts) is set to expire in January 2021. Patients Rising Now co-signed a letter submitted to the Massachusetts Health Policy Commission (HPC) on how prescription drug coupons help patients and caregivers afford costly essential medications. HPC subsequently released a report that lends policy recommendations for drug manufacturers, payers, and employers, with recommendations that will allow co-pay assistance programs to continue while addressing the state’s health care cost control efforts.
Typically, drug coupons that help patients with cost sharing are offered for brand name prescription drugs, which make up 10% of all prescriptions in the U.S. and account for a whopping 79% of the total drug spend. Coupons can provide significant financial relief for patients by reducing their out-of-pocket (OOP) spend, but health insurance companies and pharmacy benefit managers (PBMs) argue that they drive utilization of high-cost branded drugs even if lower cost generic alternatives may be available for substitution. This in turn can increase health plan premiums for all enrollees.
It is important to note that coupons are a cost-sharing option for individuals enrolled in commercial plans. Regulations prevent enrollees in federal health insurance programs such as Medicare, Medicaid, Tricare, and Veteran’s Administration from using manufacturer coupons.
HPC’s report highlights the following facts about the impact of the drug coupon program in MA:
- MA has seen a nearly three-fold increase in the number of branded drugs that offer coupons between 2012 (when commercial coupon use was first authorized in the state) and 2018. However, only 3% of drug claims used a coupon in 2018, because generic drugs make up a majority of prescription fills.
- Coupons are most beneficial for patients who have high OOP responsibility, especially as rising drug prices and high deductible health plans add to financial stress. In 2018, 11.4% of private sector employees in MA had a separate prescription drug deductible that averaged $734—more than double the national average of $384.
- Drug coupons can improve medication adherence and subsequently, clinical outcomes. Studies have shown that higher OOP costs increase the rate of medication abandonment, particularly when the patient cost burden is higher.
- From the health care spending perspective, coupons may disproportionately increase the demand and utilization of higher cost drugs despite the availability of low-cost alternatives. The report provides a detailed estimation of how coupons influenced premiums and utilization of generic close therapeutic substitutes in MA.
Policy Issues With Coupons
Copay accumulator programs, also known as accumulator adjustment programs, introduced by health insurance plans and PBMs create a barrier for coupons to count toward a patient’s deductible, which shifts the cost of prescription drugs from the payer to the patient. They may prevent an increase in premiums, but patient OOP cost-sharing may increase. The report also points to high-cost generic equivalents that do not have coupons and may be a cost burden for patients.
HPC’s report provides a few policy suggestions that that will let patients continue to use coupons while balancing the cost for the state as a whole. These recommendations can be applied to the U.S. health care system as well:
- Drug manufacturer transparency: Policies could be developed to force drug manufacturers to share data on coupon value, use, and other information to increase accountability and transparency.
- Payer transparency: Physicians and patients should be kept in the loop on drug prices and available substitutions so they can make informed decisions when a drug is prescribed. This can be achieved via alerts integrated in the clinic’s health information technology system. Health plan designs should build in steps that reduce financial barriers for patient access to care.
- Reining-in drug prices: Strategies can be developed to tackle both high drug launch prices and drug price increases.
Arizona, Illinois, Virginia, and West Virginia have banned co-pay accumulator programs—drug coupons used in these four states count toward a plan’s deductible or OOP limit.
Patients Rising Now acknowledges the important contributions of Surabhi Dangi-Garimella, Ph.D. in this article. Improving patient access is our mission and we are happy to utilize a variety of experts to carry that out.