Consumers Would Benefit from State Bans on Copay Adjustment Programs

Last month, the Ohio House Legislature voted unanimously 89-0 to end a controversial practice known as accumulator adjustment, or copay adjustment, that Pharmacy Benefit Managers (PBMs) and insurance companies use to restrict patient access to drug manufacturers provided copay coupons used to help meet their deductibles. Should the bill be approved by the Ohio Senate, and signed into law, Ohio would become the 15th state in the nation to ban the practice. This would be a significant victory for consumers and patients who already face high drug prices and the challenge of obtaining high quality prescription medications. In addition, patients who suffer from chronic conditions like cancer, diabetes, and arthritis, would be able to receive the care they need through access to biologics or specialty and brand-named drugs.

Some 15other states are currently considering similar legislation to Ohio’s, some of which were carried over from the 2021 legislative sessions. This is a big momentum shift from just a few years ago when in 2019 Virginia and West Virginia became the first states in the nation to ban copay accumulators. Prior to then, PBMs like Express Scrips and CVS Caremark pushed copay adjustment programs largely uninhibited. In fact, in Ohio, some 9 out of 10 insurers on the Affordable Care Act exchange currently utilize some form of accumulator program that prevents co-pay assistance from going towards deductibles and out-of-pocket expenses. Only now are states waking up to the negative impacts of these manipulative tactics.

PBMs argue that their opposition to manufacturer copay assistance coupons stems from their belief that these coupons incentivize the patient’s use of brand name drugs over generic products, which tend to cost more and contribute to higher premiums. They further argue that when a patient uses the coupon, the coupon does not actually reduce the price of the drug but rather shifts the cost onto health plans covered by insurance companies. Therefore, copay adjustment programs are necessary to incentivize patients to find cheaper alternatives.

The problem with this line of reasoning is that most patients are already inclined to choose generics over brand named drugs simply because they are so much more affordable. For instance, according to the Office of Generic Drugs 2021 Annual Report for the Federal Drug Administration’s (FDA), 90 percent of all prescription drugs dispensed in the United States are generic drugs. In fact, this percentage would likely be even higher if it were not for a lack of transparency from PBMs, which have been found to intentionally withhold important information from consumers and industry stakeholders. This lack of transparency by PBMs contributes to the high price of prescription drugs.

However, even for those few patients who do choose more expensive brand-named products, they usually do so only because of the unique, and often severe, nature of their condition. For instance, it could be that the patient in question has a condition so rare, or highly specific, that there are few alternative products or treatments available to them, or that the less expensive options have failed. Other times, the patient may have a condition that is more common, but they still require a new or experimental drug that does not yet have a generic equivalent. In such cases, it would be unfair to deprive these patients of the financial assistance they need to help pay for these products.

Yet, rather than address the root cause of the problem, which is the high cost of prescription drugs, PBMs and insurance companies continue to lobby for the preservation of these accumulator adjustment programs.

There is plenty that can done to both lower prescription drug costs and promote policies that alleviate the financial burden of high copays and deductibles on patients. States like Ohio should move forward with plans to ban copay accumulator programs and put control back into the hands of consumers. In addition, federal legislators should examine how PBMs affect prescription drug affordability and access, specifically as they relate to Medicare Part D prescription plans. They can do this by acting on the recommendations of the Office of Inspector General (OIG) detailed in a new report on biosimilars. These are just a few easy steps that legislators can take to help bring needed relief to millions of Americans.

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