The number of drugs with copay cards has soared in the past 10 years, from 75 drugs in 2009 to 700 drugs in 2015. These direct-to-consumer funding programs include manufacturer-provided patient assistance programs (PAPs) and charitable PAPs.
During a presentation at the AMCP Annual Meeting, Josh Golden, area senior vice president of Solid Benefit Guidance in Atlanta, Georgia, and Manual Jayabalan, PharmD, MBA, clinical pharmacist account manager of Magellan Rx Management in Canton, Michigan, discussed different direct-to-consumer payment and management options for payers.
Copay cards typically reduce copayment to a specified dollar amount that have monthly or annual caps. These can be distributed in various ways (print, electronic, debit card, and electronic systems for prescribing physicians); however, coupons are prohibited for federal-funded plans, such as Medicare and Medicaid.
The speakers discussed different stakeholder perspectives on these copay cards. For patients, coupons and cards can lower out-of-pocket costs, particularly at a time when cost-sharing is shifting more of the financial responsibility to patients. Patients often learn about coupons from the prescriber or dispensing pharmacy, or directly from the manufacturer.
For manufacturers, multiple studies have shown that coupons increase treatment adherence. In addition, coupons can protect drug market share from competitors. There are also tax advantages for manufacturers, particularly for programs that are managed by charitable foundations.
For plan sponsors, reactions to coupons vary based on the drug and class. Coupons can encourage the use of more expensive brand name products, thus increasing overall costs, as coupons can increase brand drug sales by 60%. These coupons eliminate the financial barriers to off-label or inappropriate use of a product, but they can subvert plan design strategy and undermine formulary tier decisions. Coupons can also contribute to drug cost inflation, as pharmaceutical companies must recover the costs of these cards through wholesale price. Brand drugs with coupons have been shown to have 12% to 13% annual price growth, while drugs without coupons had 7% to 8% annual price growth, according to a report from CNN.
The speakers then laid out the “copay conundrum:” Specialty drugs drive up benefit costs, leading plan sponsors to increase deductibles and coinsurance. Manufacturers then offer coupons to insured patients, and plan sponsors adopt management programs, so manufacturers offer debit cards. For plan sponsors, formulary exclusions, benefit design, and utilization management may need to be employed to manage this situation.
The speakers then discussed accumulator adjustment programs, which “back-out” the value of indirect funding for specialty drugs. Most solutions are automated within the adjudication platform, and these programs are frequently offered at no charge to plan sponsors. Uptake of this solution is increasing, as many pharmacy benefit managers saw a significant increase in program participation in 2018 and 2019. There are challenges to these programs, however, including that they are not feasible in the retail setting and self-filing is difficult. In addition, industry-sponsored debit cards may sidestep these programs. Patients may also be exposed to a midyear cost spike if the coupon value is exhausted (called the “coupon cliff”).
Variable copay programs can also be implemented to maximize the use of available direct-to-consumer funding. Thus, copays may be scaled by product or “tiered” for groups of products. However, uptake of this solution is slow.
Presentation B4: The Copay Card Conundrum: Examining the Usage, Regulation, and Management of Direct-to-Consumer Funding Programs. AMCP Annual Meeting 2019.