• Kevin Cast

What Pharma Needs to Know about Copay Accumulators

Copay accumulator, coinsurance, pharma

At the close of 2017, Archbow anticipated that copay (coinsurance) accumulator programs would have noticeable “creep” for multiple pharmaceutical companies. It is now apparent that this is not only happening, but these programs may also have a greater than expected impact on both pharma and patients.

By now, we all have a general idea of how these programs work: copay accumulators, or as some call them, copay aggregators, are enacted by the PBM-owned specialty pharmacies on behalf of plan sponsors to take full advantage of the pharma-funded copay benefit, while not crediting any of these funds to a patient’s out-of-pocket expense or deductible.

Once a patient exhausts the annual allocated dollars for the copay program, brand managers face a tough decision: brands either continue to subsidize the patients out-of-pocket or risk the patient abandoning the prescription.

The net result is that pharma companies may be forced to shoulder increased spending to help patients stay on therapy.

During a recent interview with Ronny Gal at Bernstein Research, I advised that the copay accumulator programs are on the rise from 8-10% utilization at the end of 2017, to more like 15-18% at the close of Q1 2018. Today, these programs are primarily being adopted by self-insured entities that have selected an exclusive relationship with their preferred PBM’s specialty pharmacy.

While the programs have a negative impact on patients and pharma companies, they have an incremental benefit to both the plan sponsor and the PBM-owned specialty pharmacy. The plan sponsor, in effect, realizes an additional discount on the target product, and as a result of the mandate to exclusively utilize the PBM-owned specialty pharmacy, incremental prescriptions result.

Mr. Gal reports that other industry experts he spoke with agree that unless something is done to proactively address these programs, they are likely to spill over to commercially-covered lives and impact many more patients.

While these programs will continue to evolve, I am confident that today we know the following:

  • How the accumulators work today is not how they will work tomorrow.

  • The targeted products will continue to be actively selected based on overall value to the plan sponsor and the PBM.

  • Products to treat multiple sclerosis, autoimmune diseases, hepatitis, and cancer (oral oncology products) appear to be the biggest targets right now. These targets will evolve with the marketplace.

  • Plan sponsors are expecting this trend in cost management to continue and even increase.

  • Copay vendor solutions designed to address this issue are not a sure fix. The net incremental cost is still shouldered by pharma.

  • Pharma needs to understand the nuances of these programs, and what can be done proactively to soften their impact.

We’ll stay engaged as this trend evolves. For more information on how Archbow can help your team prepare for copay accumulator impact to your product, contact us today.