Will prescription drug coupons go away? Here's who the feds' new plan would impact most.
Millions of Americans with robust health insurance rely on drug company coupons or discount cards to fill expensive prescriptions for chronic health conditions.
But those offerings may soon be limited in the wake of legal challenges and upcoming changes to federal regulations.
Insurance plans typically require copayments, deductibles, or other out-of-pocket costs that result in patients paying thousands of dollars before their full coverage kicks in.
These coupons and discount cards have effectively made prescription meds affordable for consumers with chronic medical conditions, according to patient advocacy groups. But the health insurance industry says these discounts steer patients toward expensive brand-name drugs, even when less-expensive generics are available.
In the face of what they see as unchecked drug spending by patients, insurers have a workaround of their own. They're increasingly turning to a tool known as a copayment accumulator to make consumers more cost-conscious. Drug companies can still provide coupons or discount cards to patients at the pharmacy, but insurers will no longer count these payments toward the consumer's cost-sharing requirement. The accumulator still requires consumers to meet their out-of-pocket costs before significant insurance coverage kicks in.
This struggle between drug companies and insurance companies over who should shoulder big-ticket pharmaceutical costs is a high-stakes matter for at least one group of people: chronic disease sufferers.
The federal government in recent years has stepped in to mediate this conflict, triggering outrage from some patients' rights groups. A rule drafted during the Trump administration and implemented during the Biden administration allows insurers to use these accumulators and disregard payments by drug companies when calculating an individual's cost-sharing requirement.
Three groups who support the coupon and card discounts challenged the regulation in court and a federal judge ruled in their favor.
Patient advocacy groups now fear the Biden administration will appeal the ruling or rewrite the federal rule to allow insurance companies to continue to use copay accumulators, which could have major reverberations for millions of people who rely on coupons and cards to cover expensive medications for arthritis, hepatitis, cancer, diabetes and multiple sclerosis and other chronic conditions.
"These are drugs patients need just to stay alive in many cases," said George Huntley, chief executive officer of the Diabetes Leadership Council. "These are not inexpensive drugs."
Court strikes down copayment accumulator rule
Three patients using copay assistance and three groups − the HIV + Hepatitis Policy Institute, the Diabetes Leadership Council and the Diabetes Patient Advocacy Coalition − sued the U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services in 2022 challenging the "copayment accumulator" rule that allowed insurers to disregard payments from drug companies. The three groups get funding from the pharmaceutical industry.
Drug companies could still provide coupons or discount cards to patients at the pharmacy, but insurers no longer needed to count them toward the consumer's cost-sharing requirement.
On Sept, 29, a U.S. District Court for the District of Columbia judge struck down the copayment accumulator rule, calling it "arbitrary" and "capricious" and ordered the agencies to follow an older federal rule applying copay assistance to insurance plan's cost-sharing requirement. Under the old rule, insurers can only use copayment accumulators for branded drugs that have a generic equivalent, if allowed by state law. In such cases, consumers need to pay for the pricier brand drugs or switch to less-expensive generics.
Biden administration mulls appeal of court's rejection of Trump-era rule
Justice Department attorneys have indicated they plan to appeal the judge's ruling. They've also asked the judge to clarify the terms of the standing rule. A Centers for Medicare & Medicaid Service spokesperson told USA TODAY the court filing is meant to preserve the right to appeal the ruling but emphasized the agency has not yet decided whether to appeal.
In the interim, officials at HHS plan to rewrite the rule to spell out the parameters for copay assistance, a process that could take several months. Until then, federal regulators have indicated they will take a hands-off approach. HHS lawyers said in court documents the agency doesn't "intend to take any enforcement action against issuers or plans based on their treatment of such manufacturer assistance."
HHS officials declined to say when the agency could draft a new rule or discuss other details about the new requirements due to the ongoing court case.
When HHS drafted the copayment accumulator rule during the Trump administration, the agency argued drug company coupons and discount cards can prompt doctors and consumers to choose expensive brand name drugs over cheaper generics and "add significant long-term costs to the health care system that may outweigh the short-term benefits of allowing the coupons."
Insurers: Drug companies could choose to lower prices
Drug manufacturer coupons have long drawn the ire of pharmaceutical industry watchdogs who see them as a vehicle to sell more expensive drugs. America's Health Insurance Plans, a trade group representing health insurers, filed a brief describing drug manufacturer coupons as "strategic marketing tools" to "induce spending on higher-priced drugs."
David Allen, a spokesman for America's Health Insurance Plans, noted that government insurance programs Medicare and Medicaid have banned manufacturer coupons.
“Drug manufacturers could choose to lower their prices for everyone. But they don’t," Allen said
Allen said drug companies can "pick and choose" which consumers get drug coupons, which might be used a few times until the consumer's copay or deductible is met. Then drug companies shift the "vast majority" of drug costs to health insurers, Allen said.
Without the use of copayment accumulators and other tools, health insurance plans would have to "raise premiums or reduce coverage to pay for these high-priced drugs," Allen said.
While Medicare does not allow manufacturer coupons, the Biden administration has sought to slow the federal health program's drug spending through price negotiations. The federal government's new Medicare drug negotiating power comes from the Inflation Reduction Act, the sweeping climate and health legislation Congress passed last year.
In August, the administration announced the first 10 medications subject to price negotiations, including some of the most widely prescribed or expensive drugs for conditions like heart disease, diabetes and autoimmune conditions.
Advocates: Drugs prevent 'devastating' hospitalizations
Patient advocates emphasize that people rely on these coupons and discount cards to secure their drugs.
"It is the way people afford their medications, especially brand name medications that are more expensive," said Carl Schmid, executive director of HIV + Hepatitis Policy Institute.
Schmid cited data from the prescription drug research firm IQVIA Holdings that showed patients received nearly $19 billion last year in copay assistance from drug manufacturers.
"That's a lot of money," Schmid said. "If the drug manufacturers didn't give that, the American people would have to come up with that amount of money."
With HHS appealing the court decision and rewriting the federal rule, Schmid said, more patients might likely struggle to access the drugs.
In a letter this week to HHS and Centers for Medicare & Medicaid Service administrators, U.S. Sen. Marsha Blackburn, R-Tenn., said that appealing the court ruling "risks rubber-stamping one of the most pernicious and pervasive tools" used by insurance companies and pharmacy benefit managers.
“Prioritizing the interests of large health plans over patients runs counter to the Biden administration’s expressed commitment to drive down prescription drug costs," Blackburn wrote.
There's an obvious cost-cutting matter that stakeholders should also consider, Huntley said. People who afford their medications can better control their diseases and are less likely to be hospitalized.
"Drugs prevent hospitalizations," Huntley said. "They prevent more costly and more devastating health outcomes."
Ken Alltucker is on X, formerly Twitter, at @kalltucker, or can be emailed at alltuck@usatoday.com.
This article originally appeared on USA TODAY: New prescription drug coupon plan could put chronic patients in danger
