Will Medicare Include Copay Programs?

Commercial health plans have recently started limiting the use of manufacturer copay cards to encourage formulary compliance. The question remains—how will Medicare handle these coupons?

There has been much debate on the usefulness of copay cards—payers and PBMs claim they encourage consumers to use more expensive therapies over low-cost alternatives, whereas others counter they promote adherence to certain therapies that would otherwise be cost prohibitive.

Currently, Medicare does not allow use of these coupons, but based on the findings of a new brief by the Congressional Budget Office (CBO) entitled “Offsetting Effects of Prescription Drug use on Medicare’s Spending for Medical Services,” it seems as if Medicare’s attitude towards copay cards may be softening a bit, as pointed out by a post on Drug Channels. The CBO report found that improving drug adherence increases overall cost-savings in other areas of medical care. In addition, the authors of the brief noted that people respond favorably to increased cost-sharing, and “Numerous studies have demonstrated the effect of price changes on the use of prescription drugs overall, and several others have found that lower prices for drugs used to treat chronic conditions improve the likelihood that patients take their medication as prescribed.”

Although it remains to be seen, this recent news may have the potential to trigger a shift in attitude about patient cost-sharing through the use of copay offset programs. Chris Wheeler, director of Copay Strategies at The Zitter Group, noted that the financial burden of a medication plays a role in patient adherence. These programs would be especially important for patients using specialty drugs, and 78% of biologics already incorporate such offset programs. “Many co-pay programs are geared toward increasing patient access and adherence particularly in specialty categories where high copays put many therapies out of patient reach,” Wheeler noted.

Copay programs are especially crucial in the case of orphan diseases. Wheeler pointed out that even though Xiaflex is the only drug indicated for Dupuytren’s contracture, the copay assistance program still offers patients savings of up to $1000 per injection. Lupus and the 3 major players in Gaucher’s disease all have copay programs as well. The average maximum benefit per prescription for copay programs is $444.82 for specialty drugs, but because Medicare Part D does not accept these cards, Medicare cannot benefit from these savings.

Most recently, payers have even gone as far as banning the use of offset coupons entirely in an effort to control costs. Wheeler says that Pharma’s benefit design strategy is continuing to evolve. UnitedHealthcare’s ban on copay programs, he pointed out, will go into effect on 1/1/13. “CVS continues to get tough on formulary recommendations to its clients, removing 17 more drugs in 2013 in addition to the 34 removed in 2012,” he said.

Wheeler suspects there will be 2 diverging trends in the policy world moving forward. "Massachusetts and Blue Cross Blue Shield Rhode Island initiated what I would call favorable copay program actions, whereas UnitedHealthcare and CVS initiated more restrictive or less favorable copay program actions," he explained. “It remains to be seen what Blue Cross Blue Shield Rhode Island does in 2013, but it seems something is on the horizon.”

"I think the least likely scenario is that copay programs will just somehow go away or fall off the national agenda anytime soon," Wheeler added. "Indeed, any further political action, particularly at the federal level, would seemingly only increase the attention to the matter and the complexities involved in formulating strategies for all stakeholders." Wheeler believes that Medicare will not begin allowing the use of copay cards in the future. "I don’t see anything in the Affordable Care Act (ACA) that would provide an impetus for Medicare allowing copay programs. The ban is rooted in the federal anti-kickback statute, which the ACA did nothing to reign in."