CMS’ final 2020 Payment Notice will allow insurers to stop counting the value of manufacturer drug coupons for branded drugs towards a beneficiary’s maximum out-of-pocket costs in order to promote the use of generic drugs.
CMS’ final 2020 Payment Notice will allow insurers to stop counting the value of manufacturer drug coupons for branded drugs towards a beneficiary’s maximum out-of-pocket (OOP) costs in order to promote the use of generic drugs.
CMS says the effort is aimed at encouraging the use of appropriate, less-expensive drugs when they are available.
“We expect this change to support issuers’ and plans’ ability to lower the cost of coverage and generate cost savings while also ensuring efficient use of federal funds and sufficient coverage for people with diverse health needs,” the rule reads.
The drug coupons are used to help patients who have high drug copays for rare or costly conditions; they are also offered to compete with another brand in the same class or when a generic is released.
It is that last category that CMS is trying to dissuade, although it said it realizes that the coupons may help promote adherence.
But from its point of view, CMS said the coupons shield patients and providers from the true cost of the drugs, and that the market is distorted when “manufacturers are relieved of a market constraint on drug prices.” As a result, healthcare costs wind up rising overall in the long term.
The policy is opposed by groups such as the American College of Rheumatology, who say the policy can lead to a patient stopping treatment, often in the middle of the year when the coupon runs out. The resulting full-price copays catch patients by surprise and are unaffordable for many.
Some specialty drugs are in a higher-priced tier, making the patients’ share of the drugs even more costly.
Not surprisingly, the lobbying groups for drug makers and insurers are on different sides of the drug coupon/copay accumulator issue.
Agreeing with CMS, America’s Health Insurance Plans (AHIP), the lobbying group for insurers, says it’s the high cost of drugs that is the real problem and that the coupons drive up costs for everyone.
The Pharmaceutical Research and Manufacturers of America (PhRMA), which advocates for drug companies, say the copay accumulator programs leave patients bearing the burden of ever-increasing OOP costs and that the coupons help with affordability.
But the situation with drug coupons is more nuanced, said a report last year from the Leonard D. Schaeffer Center for Health Policy Economics at the University of Southern California. After examining the availability of copay coupons and to what extent generics were available, the report said proposals to restrict coupons should ensure that patients who currently rely on them are not harmed.
Of the top 200 drugs by spending in 2014, 132 were brand drugs, and 90 of those had coupons available.
Of the 90, 49% had a generic equivalent or close generic substitute available at lower cost. But 51% were for drugs with no generic, including 12% for drugs with no close therapeutic substitute of any kind. The authors said the results suggest that most copay coupons are not affecting generic substitution and may help patients afford therapies that have no good alternatives.
Budget Impact Analysis of Biosimilar Natalizumab in the US
Projected savings from biosimilar natalizumab were $452,611 over 3 years, driven by decreased drug acquisition costs and a utilization shift from reference to biosimilar natalizumab.
Biosimilars in America: Overcoming Barriers and Maximizing Impact
July 21st 2024Join us as we explore the complexities of the US biosimilars market, discussing legislative influences, payer and provider adoption factors, and strategies to overcome industry challenges with expert insights from Kyle Noonan, PharmD, MS, value & access strategy manager at Cencora.
Biosimilars Policy Roundup for April 2024—Podcast Edition
May 5th 2024On this episode of Not So Different, The Center for Biosimilars® glances back at all the major biosimilar policy updates from April, including 2 FDA approvals, 1 European approval, and several insights into possible policy changes from the Festival of Biologics USA conference.
Hesitancy in MENA Nations to Adopt WHO Biosimilar Guidelines Hinders Market Development
July 17th 2024The World Health Organization’s (WHO) new guidelines for biosimilar approvals aim to save time and money for manufacturers in the Middle East and North Africa (MENA), but hesitancy among nations to adopt the guidelines is stifling market development of biosimilars.
BioRationality: Time to Get Rid of PBMs if Biosimilars Are to Succeed
July 15th 2024Sarfaraz K. Niazi, PhD, discusses the challenges with pharmacy benefit managers (PBMs) that plague the biosimilar industry and new legislation that attempts to reform their practices and encourage biosimilar adoption.