The Role of Accumulator Co-pay Programs in Specialty Pharmacy Benefits

Specialty Pharmacy TimesSeptember/October
Volume 9
Issue 6

As specialty spending continues to creep up to 50% of total drug spend, payers have an option to directly reduce their costs while impacting a relatively small volume of prescriptions.

According to a recent report from the US Government Accountability Office, more than two-thirds of pharmaceutical companies experienced an average profit margin increase of 17.1% from 2006 to 2015. This trend coincided with an increase in sales revenue from $534 billion to $775 billion in the same period.1 There are certainly many factors to consider with rising drug prices.

Although a majority of the increases were for branded products, some generics have seen their prices increase as well. Mergers and acquisitions have consolidated drug portfolios and provided drug companies with more leverage to negotiate pricing, discounts, and rebates with pharmacy benefit managers (PBMs).

With an increase in mergers and acquisitions, there has been a decrease in research and development, with more money being spent on product development and marketing. There has also been an increase in exclusivity. The orphan drugs that are often approved for rare disease states in small patient populations come with patient extensions, government funding, and premium price tags.2

Insurers and health plans typically include drug formularies in their benefit design. Whether managed internally or by a PBM, these formularies are designed to guide providers and members in prescribing decisions. Many drug companies have created drug coupons to offset member costs for branded medications. It is possible that, in some cases, these coupons incentivize patients to use brand name drugs when their generic alternatives or less expensive options may be available.

Payers have historically had few options when combating rises in drug prices and utilization. Recently, however, PBMs and other players in the pharmacy benefit space have rolled out accumulator or variable co-pay programs. These assistance programs reduce the plan cost for branded drugs, using monthly or annual limits set forth by manufacturers. A quick Google search for a particular drug and assistance will show these limits. A majority of manufacturer programs apply only to those with commercial or private insurance. Patients with Medicare, Medicaid coverage, or TriCare benefits are not eligible.

Upon review of these assistance programs for commercial or private insurance, 2 challenges come to light. Each health plan has an accumulator for individuals and families that tracks how much members must spend to either meet a deductible or a maximum out-of-pocket (OOP) limit. Historically, a plan member’s co-pay, whether as part of a high-deductible plan, a percentage, or flat amount, has counted toward the accumulator.

For example, if a member has a co-pay of $200 for a biologic rheumatoid arthritis (RA) drug, then $200 would count for each fill along with any other medications the member may be taking. As part of an accumulator program, only a member’s OOP cost after a coupon (eg, $5) would count toward these limits. For members in a high-deductible plan, this cost could be detrimental. If a plan member has a $5000 deductible, they may meet that amount after the very first fill of a biologic followed by standard co-pays without the accumulator program. In the previous example, only the member’s $5 OOP spend would apply and they would run out of co-pay assistance before reaching their deductible.

The member would face a huge bill several months into their therapy. Is this detrimental to this patient? Yes. They are going to get sticker shock and likely not be in a position to afford their medications. Was the health plan transparent about the program? No one can know for sure.

Often, these programs are run through the PBM, with a small amount of input from the health plan. PBMs only see the primary claim being submitted by the pharmacy. The coupon is submitted as a secondary claim to which the PBM is blinded. The PBM has to rely on a pharmacy to provide that information in a separate report. This is an opportunity for the PBM to leverage its own specialty pharmacy in order to track the coupons appropriately and adjust the accumulators to match the coupon amounts.

The second scenario is the variable co-pay. For example, if a health plan has a co-pay of $200 for a biologic RA drug and the manufacturer offers $1000 per month in co-pay assistance, then the health plan can vary its co-pay to $1000. The member would still only pay $5 while the health plan shifts $800 back to the manufacturer.

The health plan would save money, the member would be financially neutral, and the drug company would pick up a greater portion of the tab. The worst-case scenario for the patient is they don’t meet or there is a delay in meeting their maximum OOP costs for the year. As specialty spending continues to creep up to 50% of total drug spend, payers have an option to directly reduce their costs while impacting a relatively small volume of prescriptions.

According to a recent report from Reuters, approximately 17% of employers with 5000 or more employees are currently using some form of this program.3 Within the same report, US drug prices, inclusive of discounts and rebates, fell by 5.6% in the first quarter of 2018 compared with a 1.7% drop in the same period a year ago. Manufacturers that are talking about these programs don’t seem to think they are having any significant impact on their revenues. AbbVie stated that only approximately 4% of patients using their drug, Humira (adalimumab), were part of these accumulator programs.

Biogen indicated these programs had zero impact on their bottom line for the first quarter of 2018. Regardless of these statements, some manufacturers have started giving patients prepaid debit cards in order to meet their new OOP costs.3 Many manufacturer programs also offer a coupon card that pharmacies use to process the co-pay.

PBMs have traditionally not been able to see these secondary claims and rely on the pharmacy to provide the true OOP amount. Debit cards may make this process more complicated without knowing whether the manufacturer is paying the bill. Whether this tactic will deter health plans and PBMs from these programs remains to be seen.

The future of these programs remains unclear. Payers and patients have become more responsible for the burden of rising drug costs. There is no doubt that many of these drugs require significant research and development, as well as production costs, but double-digit annual inflation rates can paint the drug companies in a negative light. Many health plans are considering drug co-pay programs in order to subsidize drug costs for their members, in the face of inflation, constant formulary changes, and rebate pressures.

It is important for health plans to con- sider both the financial and clinical impacts these programs can have on their members. High-deductible health plans may put their members in a precarious financial position. For health plans with more traditional benefit designs, these programs may reduce plan costs while being financially neutral to the members. Regardless of the future, health plans and PBMs should carefully consider the impact of accumulator programs on their members and have appropriate safeguards in place to reduce the risk of patients not receiving their drug therapy.


1. United States Government Accountability Office. Report to Congressional requestors: drug industry: profits, research and development spending, and merger and acquisition deals. GAO website. Published November 2017. Accessed June 26, 2018.

2. Kacik A. Drug prices rise as pharma profit soars. Modern Healthcare. December 28, 2017. Accessed June 26, 2018.

3. Erman M, Humer C. U.S. drug prices hit by insurer tactic against copay assistance: analysis. Reuters. June 5,2018. Accessed June 26, 2018.

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