White House decision not to appeal copay ruling a ‘huge win’ for rheumatology patients
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A recent legal battle over copay assistance programs for biologic medications, and whether they must count toward insurance deductibles, have resulted in a positive outcome for patients, according to the American College of Rheumatology.
In early 2023, the ACR raised concerns with CMS about its policy of allowing insurers to exclude copay assistance programs from counting toward a patient’s deductible. Advocates for the ACR argued that many rheumatology patients require copay assistance to maintain quality of life on treatments that are necessary to their physical and mental well-being.
Later that year, the HHS Notice of Benefit and Payment Parameters proposed a rule for 2024 that failed to revise the current policies allowing insurers to exclude copay assistance from counting toward a patient’s deductible.
However, in October, the U.S. District Court for the District of Columbia vacated the Notice of Benefits and Payment Parameters rule — initially issued in May 2020 — that allowed insurance carriers and pharmacy benefit managers (PBMs) to use copay accumulators to exclude manufacturers’ copay assistance when calculating out-of-pocket costs and cost-sharing ceilings for patients under the Affordable Care Act.
The Biden administration at first filed a notice of intent to appeal the ruling. However, following both criticism and a volley of lawsuits from patient advocacy groups, the White House ultimately chose not to appeal.
The result will, in effect, allow copay assistance to factor into deductible and out-of-pocket costs for patients enrolled in federally regulated insurance plans, such as plans governed under the Employee Retirement Income Security Act (ERISA).
Healio sat down with Chris Phillips, MD, chair of the ACR’s Committee on Rheumatologic Care, to discuss the need for copay assistance programs in rheumatology, what the recent legal battle means for providers and patients, and what could happen next.
Healio: Why are copay assistance programs so critical for rheumatology patients?
Phillips: A lot of our patients need to be treated with specialty medications such as biologic drugs. They are unfortunately very complex and expensive. In the absence of these copay assistance programs, those drug prices serve as a significant barrier to access effective treatment.
As these drugs have become more commonly used, health plans have shifted costs to patients. Some patients have plans that charge 50% co-insurance, which would render the medications cost prohibitive.
Healio: Why would CMS consider a policy to exclude patients from these programs in the first place?
Phillips: The most high-level overview answer is that we don’t know. That is where we start. There are critics of copay assistance programs, for several reasons that are not unjustified. One criticism is that when one uses a copay assistance program, one might be shielded from understanding the full cost of their treatment. It might remove incentive to use a cheaper treatment. That is one rationale for which CMS precludes copay assistance for patients on government insurance. If you are on Medicare, you cannot use these programs.
In the case of these drugs in our patients, that rationale does not really hold up because these are all single source drugs. They do not have a generic alternative. From the ACR’s perspective, we understand and agree with those concerns about copay assistance program. We would like to see the root issue of drug prices addressed. However, that has not been accomplished yet.
Healio: Any thoughts as to why the Biden administration reconsidered their appeal of the U.S. District Court ruling?
Phillips: It is not fully transparent why that happened. One thought is that the initial intent to appeal might have been a procedural motion, but once they thought it through, they realized it might be problematic. It is also possible that they heard enough outreach from advocacy groups. There has been a lot of grassroots advocacy from the ACR and other organizations. Regardless, we see their reversal of course as a huge victory for our patients.
Healio: Announcing a reversal is one thing, but how will the policy now be enforced?
Phillips: Since they dropped the appeal, I believe we are now waiting for a formal HHS guidance document for payers saying that copay assistance programs must be counted. Once they do that, the hope and expectation would be that copay accumulator plans would not be allowed to be employed by a lot of patients on ERISA plans.
Healio: Will there be a next step in this legal battle from either side? If so, what will that look like?
Phillips: There are several considerations. One is we continue to advocate for drug pricing reform. We also should advocate for the uptake of biosimilars. Unfortunately, the problem ultimately relates to payers not wanting to actually pay for these expensive treatments. They are trying to push those costs to other people.
Techniques have evolved to include things like copay maximizers, and now the newest method, which are called “alternative funding plans.” Essentially, payers and PBMs are trying to deem some of these treatments as non-essential health benefits and minimize what they have to pay by finding creative ways to either maximize utilization of copay assistance or push patients fully into pharma-funded patient assistance programs. So, there are still a lot of potential barriers to treatment access for our patients. This is one battle in a larger war.
References:
- D.C. court strikes down copay accumulator rule. https://www.thefdalawblog.com/2023/10/d-c-court-strikes-down-copay-accumulator-rule/. Published Oct. 10, 2023.
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Healio interview
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