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Copay Accumulator and Maximizers: Evolving Policy Landscape

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Implementation of copay accumulator and maximizer programs continues to increase; recent policy provisions finalized through federal rulemaking and state-level legislation have created new uncertainty for the future of these programs and the stakeholders they affect.

In recent years, payers and pharmacy benefit managers (PBMs) have increasingly used copay adjustment programs (i.e., copay accumulator and maximizer programs) to limit plan sponsor exposure to specialty drug costs. Though these programs employ different approaches, both forms of copay adjustment programs seek to exhaust manufacturer copay assistance while preventing these dollars from counting toward a commercially insured patient’s deductible and maximum out-of-pocket limit as they otherwise would have.

The increased use of these programs is a byproduct of a continued tension between plan benefit design, the expansion of manufacturer copay program support, and the growth of spending. One recent analysis of commercial insurers cited that 83% of enrollees are in plans that have implemented copay accumulator programs and 73% are in plans that have implemented copay maximizer programs. The analysis also noted that, of the copay adjustment programs implemented, 77% were for pharmacy benefit products and 26% were for medical benefit products. Accumulators and maximizers present new challenges and considerations for payers, manufacturers, and patients. Recent regulatory and legislative activity at both the federal and state levels raises additional questions as these programs are expected to grow in coming years.

Federal Rulemaking Back-and-Forth on Copay Adjustment Programs

The Notice of Benefit and Payment Parameters (NBPP) rulemaking cycle typically provides federal guidance on how plans in the exchange (as well as large-group, small-group, and individual) markets are designed and implemented. The NBPP directly addressed the topic of copay adjustment programs in 2020 and 2021 rulemaking. In the 2020 final rule, the US Department of Health & Human Services (HHS) allowed commercial payers to implement copay adjustment programs for brand drugs with a generic equivalent and later walked back these limitations in response to stakeholder requests for clarification. In the 2021 rulemaking cycle, the HHS modified the earlier language to allow commercial payers to implement copay adjustment programs for all drugs, without specifying that the drug must be a brand drug with a generic equivalent.

Before the updates in the 2021 NBPP allowing accumulators were finalized, the Departments of Labor, HHS, and Treasury issued a tri-agency Frequently Asked Questions (FAQ) specifically addressing drug manufacturer assistance for people enrolled in high deductible health plans (HDHPs). In that FAQ the agencies acknowledge stakeholder questions about a 2004 Internal Revenue Service FAQ indicating that plans administering HDHPs should disregard drug discounts and other manufacturers’ and providers’ discounts in determining if the minimum deductible for an HDHP has been satisfied. The agencies signaled they plan to address this issue in future rulemaking.

While the use of copay accumulators and maximizers has typically occurred in the self-insured markets, the most recent NBPP changes may lead to a broader adoption of these copay adjustment programs in other markets and introduce risks to manufacturer assistance program spend and patient out-of-pocket liability. As agencies consider addressing the future of copay adjustment programs, stakeholders should understand the potential downstream effects of these programs, including patient out-of-pocket burden and adherence, plan liability, and manufacturer program implementation.

Recent Medicaid Rule Incorporates Copay Adjustment Program Concerns

In December 2020, the Centers for Medicare & Medicaid Services (CMS) revised the calculation methodology for average manufacturer price (AMP) and best price (BP) as part of a Medicaid value-based purchasing rule. This rule has created new risks for manufacturers when copay accumulator or maximizers are applied to their products. Beginning in 2023, manufacturers must “ensure” the full value of copay assistance is passed on to the patient or else these dollars will count toward (i.e., lower) the AMP and BP calculation of the drug. While little guidance was provided regarding how manufacturers will, in fact, ensure patients receive the full value of provided copay assistance, the CMS stated that “there may be multiple ways that manufacturers will be able to meet these new regulatory requirements.”

With new leadership within the CMS, significant uncertainty remains regarding whether these requirements will be delayed or modified. Manufacturers must assess the potential risks these modifications to AMP and BP calculations could create for specific brands, while also taking inventory of potential solutions to meet these new requirements. New entrants and third-party vendors in this space may also play a role to ensure continued patient support while limiting potential manufacturer financial exposure.

States Continue to Take Differing Approaches on Manufacturer Copay Assistance

In recent years, some states have regulated the use of manufacturer copay assistance. Legislators have introduced policies to limit the use of manufacturer assistance or, conversely, to create safeguards for manufacturer assistance by limiting the use of copay adjustment programs. Massachusetts and California have created specific limitations on the use of copay assistance (e.g., when an “AB rated” generic is available). Other states have sought to ensure patient access to these programs by limiting implementation of copay adjustment programs. While implemented in varying manners, 5 states (Virginia, West Virginia, Arizona, Illinois, and Georgia) have passed laws that mandate that any third-party payment or other discounts made by or on behalf of a patient be counted toward patients’ cost-sharing liability.

States will likely continue to consider legislative paths to either limit or protect manufacturer copay assistance in the coming years. Given this fragmented landscape, stakeholders will need to monitor and prioritize engagement at the state level based on financial exposure, patient population prevalence, and the prevailing political landscape to drive change.

Avalere Outlook

As market dynamics and the policy outlook for copay accumulator and maximizers evolve, stakeholders on all sides will need to remain vigilant in terms of assessing risk while ensuring patients can appropriately and adequately access their therapies. Any future revisions or clarifications to these recent policy changes will inform how payers, PBMs, and manufacturers engage with each other and operate their respective programs.

Avalere is helping clients understand these emerging issues in patient support, model the impacts of these policy changes, and identify solutions accounting for financial exposure while maximizing appropriate patient access. With hands-on experience in policy and from the payer, manufacturer, and third-party vendor perspective, Avalere is well positioned to support your organization respond to or shape the evolving copay adjustment program landscape.

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