Battle Between Pharma Companies and Benefit Managers

January 2018 – Pharmacy Benefit Managers (PBMs) are feeling the pinch as pharmaceutical companies offer subsidies in prescription co-pays. For a number of years pharmaceutical companies have expanded access for branded medications through co-pay programs directed at commercially insured patients.

PBMs have consistently opposed these co-pay programs for interfering with their benefit plan design, reducing generic substitution, and raising costs for plan sponsors. As enrollment in co-pay programs could be poised to increase, PBMs are getting even more aggressive in combatting these subsidies.

In an effort to secure greater control, PBMs developed copay accumulator programs—in which the co-pay assistance provided by the manufacturer is applied not to the member’s deductible but rather to the employer’s share of the cost. This practice requires

the member to be responsible for paying for 100% of his or her health care before meeting the deductible. Ultimately, this approach may not significantly affect the patient’s out of pocket, the manufacturer will see a dramatic increase in their total copay budget.

The application of copay accumulators is just getting started.  This year will see a widespread creep, with more and more drugs being targeted by payers. Manufacturers are coming to understand how to work effectively within this new dynamic, PBMs likely hope they will need to curtail copay programs or eliminate them altogether.  Unfortunately, the net result may be less access to expensive medications for the patient.