Trump-era drug rule ends; prices may rise

Millions of Americans with robust health insurance rely on drug company coupons or discount cards to fill expensive prescriptions for chronic health conditions.

But those offerings may soon be limited because of legal challenges and upcoming changes to federal regulations.

Insurance plans typically require copayments, deductibles or other out-of-pocket costs that result in patients paying thousands of dollars before their full coverage kicks in.

These coupons and discount cards have effectively made prescription meds affordable for consumers with chronic medical conditions, according to patient advocacy groups. But the health insurance industry says these discounts steer patients toward expensive brand-name drugs, even when less-expensive generics are available.

This struggle between drug companies and insurance companies over who should shoulder big-ticket pharmaceutical costs is a high-stakes matter for at least one group of people: chronic disease sufferers.

The federal government in recent years has stepped in to mediate this conflict. A rule drafted during the Trump administration and implemented during the Biden administration allows insurers to use a tool known as a copayment accumulator to disregard payments by drug companies when calculating an individual's cost-sharing requirement.

Drug companies can still provide coupons or discount cards to patients at the pharmacy, but the accumulator no longer counts these payments toward the consumer's out-of-pocket cost requirements before significant insurance coverage kicks in.

The rule has triggered outrage from some patients' rights groups.

"These are drugs patients need just to stay alive in many cases," said George Huntley, CEO of the Diabetes Leadership Council. "These are not inexpensive drugs."

Court strikes down copayment accumulator rule

Three groups that support the coupon and card discounts – the HIV + Hepatitis Policy Institute, the Diabetes Leadership Council and the Diabetes Patient Advocacy Coalition – challenged the "copayment accumulator" regulation in court.

Along with three patients who use copay assistance, the groups sued the U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services in 2022, with funding from the pharmaceutical industry.

On Sept.29, a federal judge ruled in their favor, striking down the copayment accumulator rule as "arbitrary" and "capricious," and ordering the agencies to follow an older federal rule applying copay assistance to an insurance plan's cost-sharing requirement.

Under the old rule, insurers can only use copayment accumulators for branded drugs that have a generic equivalent, if allowed by state law. In such cases, consumers need to pay for the pricier brand drugs or switch to less-expensive generics.

Patient advocacy groups now fear the Biden administration will appeal the ruling or rewrite the federal rule to allow insurance companies to continue to use copay accumulators.

Justice Department attorneys have indicated they plan to appeal the judge's ruling. They've also asked the judge to clarify the terms of the standing rule. A CMS spokesperson told USA TODAY that the agency has not decided whether to appeal.

In the interim, officials at HHS plan to rewrite the rule to spell out the parameters for copay assistance, a process that could take several months.

Until then, the agency doesn't "intend to take any enforcement action against issuers or plans based on their treatment of such manufacturer assistance," HHS lawyers stated in court documents.

Insurers: Drug companies could choose to lower prices

Drug manufacturer coupons have long drawn the ire of pharmaceutical industry watchdogs, who see them as a vehicle to sell more expensive drugs. America's Health Insurance Plans, a trade group representing health insurers, filed a brief describing drug manufacturer coupons as "strategic marketing tools" to "induce spending on higher-priced drugs."

David Allen, a spokesman for AHIP, noted that government insurance programs Medicare and Medicaid have banned manufacturer coupons.

The Biden administration has sought to slow the federal health program's drug spending through price negotiations as part of the Inflation Reduction Act, the sweeping climate and health legislation Congress passed last year.

In August, the administration announced the first 10 medications subject to price negotiations, including some of the most widely prescribed or expensive drugs for conditions like heart disease, diabetes and autoimmune conditions.

"Drug manufacturers could choose to lower their prices for everyone. But they don't," Allen said.

Drug companies can "pick and choose" which consumers get drug coupons, which might be used a few times until the consumer's copay or deductible is met, and then drug companies shift the "vast majority" of drug costs to health insurers, Allen said.

Without the use of copayment accumulators and other tools, health insurance plans would have to "raise premiums or reduce coverage to pay for these high-priced drugs," Allen said.

Patient advocates emphasize that people rely on drug coupons and discount cards to secure their drugs.

"It is the way people afford their medications, especially brand name medications that are more expensive," said Carl Schmid, executive director of the HIV + Hepatitis Policy Institute.

Schmid cited data from the prescription drug research firm IQVIA Holdings that showed patients received nearly $19billion last year in copay assistance from drug manufacturers.

"That's a lot of money," Schmid said.

"If the drug manufacturers didn't give that, the American people would have to come up with that amount of money."