Copay Accumulators: Shifting Costs of Oncology Drugs from Plans to Patients

The cost of oncology drugs in the United States has been rising over the last decade, with many patients facing copays that exceed their monthly incomes.¹ In response to these rising costs, pharmaceutical manufacturers developed patient assistance programs (PAPs) that supply patients who meet certain income eligibility criteria with coupons that cover the cost of a patient’s copay. Historically, the costs covered by the “copay cards” counted toward patients’ cost-sharing contributions until they reached their annual out-of-pocket (OOP) limits. This practice, however, leveraged some ambiguity within the law and, specifically the Affordable Care Act (ACA).

The ACA requires individual and small group markets to cover 10 essential health benefits (EHBs), one of which is prescription drug coverage, and further specifies that all contributions paid by consumers toward the cost of an EHB must count toward meeting their annual OOP limit.² These patient protections on cost-sharing were intended to provide patients and their families more predictability on expected maximum annual out-of-pocket costs. However, the ACA did not address whether cost-sharing by a third-party such as a PAP would be required to be counted toward that annual OOP.

In 2021, the US Department of Health and Human Services (HHS) issued guidance under the 2021 Notice of Benefit and Payment Parameters (NBPP) that allowed insurers wide discretion in whether to treat manufacturer PAPs as permitted within the definitions of cost sharing, regardless of whether a drug had a generic equivalent or not.³ This guidance was seemingly motivated by the market-distortive effect of PAPs, which effectively shield patients and providers from the moral hazard of using expensive therapies in the absence of any personal financial outlay. PAPs thus serve manufacturers’ interests by increasing the utilization of costly therapies overall, with follow-on ramifications on rising plan premiums and the overall cost of health care as a share of gross domestic product.^4, 5