The battle between PBMs and manufacturers over patient prescription drug affordability has experienced several shifts over the years. PBMs were holding the cards early, with formularies and copay tiers determining patient costs. Then, manufacturers provided copay cards to help patients overcome the financial burden for higher copay medications, and these cards reduced the impact of PBM formularies and tiers. Most recently, PBMs have been utilizing copay accumulators and copay maximizers to regain their influence on product selection and dispensing. We will review differences between copay maximizers and accumulators, in the context of a prescription deductible and copay card.
To manage product selection, insurance plans have a number of levers at their disposal, including premiums, deductibles, copays/coinsurance designs, and coverage rules. We will examine a case where a patient has a $7,000 annual deductible and is taking a drug that costs $1,000 per month. For many patients, paying medication costs may be difficult to do on their own. Prior to copay cards, the patient would likely have talked about alternative options with their pharmacist and doctor. Today, the patient, caregiver, or provider could identify the option to utilize a copay card to help cover the medication costs and reduce patient out-of-pocket costs.
When patients use a copay card to help cover the cost, that amount has historically still counted towards the patient’s deductible. Assuming the patient is not taking any other medications, the $1,000 monthly cost would take 7 months for the patient to satisfy the deductible without any assistance. If a patient uses a copay card with a maximum of $4,000 annual benefit, that $7,000 patient out-of-pocket expense can be greatly reduced to $0 a month for 4 months, and the patient would still reach their deductible total after 7 months, but only paying out of pocket for 3 of those months. With the use of a copay card, the daunting $7,000 deductible can be easier to reach, and the financial burden is reduced for the patient.
This is where the accumulator and maximizer programs come into play. With an accumulator program, savings gained from copay cards do not apply towards a patient’s deductible. That means once the patient reaches the maximum usage of a copay card, the patient is still expected to cover the full $7,000 out-of-pocket deductible, with the $4,000 paid by the copay card not counting towards the deductible amount. The copay card or manufacturer’s coupon in this program would not contribute to the deductible, typically extending the time and increasing the money needed to reach the patient’s annual deductible before insurance contributes to the cost. The graph below from the Crohn’s and Colitis Foundation helps articulate the difference.
Maximizer programs work to “maximize” the cost savings from copay cards or coupons and shift costs from the payers to the manufacturers. Under a copay maximizer program, the patient’s out-of-pocket obligation is adjusted (typically by the PBM) to equal the maximum benefit available under the copay card. Maximizer programs differ slightly in that the total amount on a copay card is typically evenly distributed throughout the year. So, if a patient’s copay card offers a $4,000 annual benefit and the drug costs $1,000 per month, the $4,000 would be evenly distributed across 12 months. The following table illustrates a copay maximizer program where the full amount of the copay card is spread evenly across 12 months for the same prescription benefit as above.
Accumulators and maximizers are typically utilized by PBMs/health plans to maximize savings from manufacturers but may place additional cost burdens on patients. As of mid-2024, twenty-two states in the US have banned copay accumulator programs. As of 2024, the United Stated District Court in D.C ruled that, if brand named medications do not have a generic alternative available, a private health plan cannot use copay accumulators. The longevity of this practice remains uncertain, as many state and national organizations have successfully advocated for legislation banning this practice and continue to do so in states where laws have not been enacted. Additionally, in 2023, a lawsuit brought against HHS and CMS ended a CMS rule allowing for broad use of accumulators. The appeal by HHS and CMS was dropped after the court clarified that a previous rule limiting accumulator use to only products that have generic equivalents available was not challenged or reviewed and therefore remains in effect. Even though the court ruled against the broader rule, HHS and CMS announced their non-enforcement policy, allowing accumulators to continue federally with potential risk of agency changes in the future.
How do accumulators and maximizers impact you? What will be the next action to change patient affordability of prescription medications?