Breaking Down Co-Pay Accumulators, Maximizers and the Impact on Patients

Under co-pay accumulator and maximizer programs, financial assistance that is in place to help patients is redirected to benefit insurers more, with the potential to cause significant harm to patients, said Kimberly Westrich, MA, chief strategy officer, National Pharmaceutical Council.

This transcript has been lightly edited for clarity.

Transcript

How do co-pay accumulators and maximizers differ from one another and why did insurers start implementing them?

I'm going to answer that in 3 parts. First, what are they? Second, why did insurers start implementing them? And third, how are they different?

First, what are they? Co-pay accumulators and maximizers and alternative funding plans, which we're not talking about yet, are cost-shifting programs that redirect financial assistance that's intended for patients to insurers. So that's point 1.

Point 2, why did insurers start implementing them? The simple reason for that is financial gain. If we take a step back and think about where did they come from, employers are increasingly adopting benefit designs like high-deductible health plans that are passing on a greater share of out-of-pocket costs to patients than ever before. This out-of-pocket burden can actually hurt patients. Studies have found that higher co-pays and out-of-pocket cost can lead to reduced medication adherence, worsening disease control, and increased hospitalizations. Some manufacturers have started implementing co-pay assistance programs, which are sometimes called patient assistance programs, or PAPs, and these are designed to help patient access and to mitigate against some of these adverse events that come about from the worsening financial out-of-pocket burden.

This brings us back to insurers misappropriating co-pay assistance with co-pay accumulators and maximizers. Co-pay accumulators and maximizers are part of a troubling trend that we're seeing in the health care ecosystem where intermediaries and third parties are extracting value from pharmaceuticals and they're interfering with patients receiving that value. So that's part 2: Why did insurers start implementing these programs?

Part 3 of the question, what are the differences between accumulators and maximizers? Quite simply, co-pay accumulators redirect, and co-pay maximizers maximize. Co-pay accumulators redirect copay assistance funds from the patient to the insurance plan. The way this works in practice is that an insured patient can use a co-pay assistance fund to help pay for their medication at the pharmacy, but—and this is the key part—that co-pay assistance does not count towards their deductible or out-of-pocket maximum. What happens is when the co-pay assistance is exhausted, then the patient is surprised to find out that they owe money towards their deductible, towards their out-of-pocket maximum. In the absence of the co-pay accumulator program, again that co-pay assistance they were getting from the manufacturer helped directly meet those financial obligations.

A way to think about this is double dipping. Basically, with a co-pay accumulator program, an insurer is double dipping. First, they're collecting the value of the deductible from the co-pay assistance program, and then they're collecting it again from the patient. That's a co-pay accumulator.

Co-pay maximizers layer onto that to maximize the available funds from the co-pay assistance program. What happens in a co-pay maximizer is the patient is required to register with a third party for a specific medication before they can access it at the pharmacy. That third party looks at the co-pay maximizer or the co-pay assistance program that's available and tries to figure out what is the maximum amount of assistance that could be obtained from this co-pay assistance program, and then advises the health insurance plan to set the patient’s co-pay at a level that will maximize that amount of benefit from the plan. So, they're collecting a much larger amount.

Now, the financial good news for the patient is for this particular product, they generally owe very little. The co-pay assistance fund has taken care of it. But again, and this is the part that is often overlooked, that money that's coming in from the maximizer or from the co-pay assistance program under the maximizer does not count towards the patient’s cost sharing.

In summary, manufacturer co-pay assistance programs are designed to help patients access and receive the value of their medication. The cost-shifting programs, like accumulators and maximizers, are designed to help insurers extract the value of that co-pay assistance for themselves, which can in turn significantly harm patients.