AHIP Argues In Favor of the Copay Coupon Accumulator Rule

AHIP submitted an amicus brief in favor of the HHS copay coupon accumulator rule, which would allow states to decide whether pharmaceutical manufacturers’ copay coupons should contribute to patient cost-sharing.

Copay coupons are intended to reduce members’ cost-sharing, a goal that payers share. AHIP emphasized that the industry group supports efforts to lower drug costs for members.

“Americans pay the highest prices in the world for medications, by a large margin, and the problem gets worse every year,” the amicus brief explained.

“Ever-higher drug prices, in turn, necessarily lead to higher insurance premiums and cost-sharing amounts that impact hardworking American families. And while health insurance providers are strictly regulated to both cover costs and pass on savings, prescription drug prices are left wholly unconstrained based on unilateral price setting by drug manufacturers.”

However, copay coupons only contribute to high prescription drug spending, the payer organization argued. They are viewed as marketing tools that boost sales. In particular, they draw consumers’ attention to drugs that have waning exclusivity. Instead of basing assistance on financial need, the coupons are attached to specific drugs.

AHIP argued that the coupons are most often applied to drugs that are gaining more competition from generics, therapeutic substitutes, and other branded drugs. The coupons dissuade consumers from seizing on the more price-conscious choice because they do not get an accurate portrayal of the drug’s cost. As a result, payers end up paying more.

For example, a brand-name drug might cost a health plan $400 and the member $100 for a total of $500, while its generic counterpart typically costs the health plan $95 and the member $5 for a total of $100. But with the coupon copay, the pharmaceutical manufacturer strikes out the patient’s $100 copay so that, for the patient, their choices are to pay $0 or pay $5 for the generic.

However, the price of the drugs has not changed. The brand-name drug still costs $400 for the health plan while the generic costs $95. When consumers pick the brand-name drug because of a coupon, payers have to compensate for that higher cost in the form of premium increases.

Ultimately, the payer organization argued that copay coupons increase the amount that health insurers have to pay which leads to higher health insurance premiums. Meanwhile, pharmaceutical manufacturers turn a profit from copay coupons, with one company attesting it saw a 451 percent return on investment on average.

AHIP is not the only entity to recognize this problem. The payer organization pointed out that the federal government views copay coupons as illegal kickbacks for its own public payer programs.

Copay accumulator programs were designed to combat this effect. Copay accumulators do not allow the coupon to count toward a member’s cost-sharing limit, since the manufacturer, not the member, is paying the cost of the coupon to the pharmacy.

“Accumulators operate on a simple premise: when a manufacturer discounts its price through a co-pay coupon, the discount does not require the patient to incur any cost, so it does not count toward a patient’s cost-sharing,” the amicus brief explained. “This preserves important cost-sharing incentives that help nudge patients toward lower cost, higher value choices.”

Specifically, the law in question allows states to determine if they want to permit the use of copay accumulators. AHIP pointed out that the law still permits pharmaceutical manufacturers to support members financially in a variety of ways.

Policymakers have been working toward a variety of solutions for high prescription drug spending. In February 2023, the Department of Health and Human Services (HHS) proposed three models that could lower consumer drug spending: the Medicare $2 Drug List, the Cell and Gene Therapy Access model or CGT Access model, and the Accelerating Clinical Evidence Model.

Meanwhile, individual payers have taken steps to lower consumers’ out-of-pocket healthcare spending on drugs. UnitedHealthcare eliminated out-of-pocket costs for certain emergency-use drugs and insulin in 2022.