Manufacturer Drug Coupons and Copay Accumulator Adjustments

A controversial new health insurance plan benefit design option has recently been introduced by insurers, which will further shift specialty drug costs away from payers and onto drug manufacturers and consumers. Known as copay accumulator adjustments, the true price of this new approach to copay assistance programs may reveal as reduced prescription volumes, and therefore, revenue, for specialty drug manufacturers.

Although specialty prescription drugs are used by less than one percent of privately-insured patients in the United States, they account for more than 25 percent of all drug expenditures. Compared to other prescription drugs, specialty drugs tend to have a much higher price, at an average of $3,500 per month.

The high price of specialty drugs is seen by patients in their out-of-pocket drug copays. To reduce these out-of-pocket costs, drug manufacturers have provided patients with drug coupons to cover copays up to a set maximum dollar amount. Through these copayment assistance programs, payers have traditionally applied drug coupons as contributions towards the patient’s plan deductible and out-of-pocket maximum. This process has been seen to improve treatment adherence and to greatly minimize out-of-pocket spending for patients, while also ensuring stable prescription volumes and revenue for the manufacturer.

Despite these benefits, traditional copay assistance programs face government and payer opposition. Though copay assistance programs can effectively mask high drug costs from negatively impacting patients, excessive prices place burden on payers, government, and employers, with these cost burdens eventually seen in the form of high premiums.

Negative impacts on both manufacturers and patients

In fact, payers have begun implementing two new approaches to copayment assistance programs, known as copay accumulator adjustment and copay maximizers, across health insurance plans with a major change in tow:

  • Drug coupons are no longer applicable toward the deductible amount or out-of-pocket maximum amount patients are obligated to pay.
  • Once a set maximum value for the manufacturer copay program is met, patients are responsible for out-of-pocket copayments on specialty drugs until their plan deductible or out-of-pocket maximum is met.
  • Because this is directly tied to specialty drugs and their higher cost, patients may suddenly be unable to pay drug costs previously covered in full by drug coupons.
  • Certainly, a negative impact to patient health and safety, declining drug adherence will also negatively impact manufacturers when patients are faced with the choice of finding an alternative, lower cost drug or stopping the medication altogether.
  • Declining specialty drug adherence is seen by manufacturers as declining prescription volumes and sales, and, ultimately, lower revenue.

Differences between the two new approaches to copay adjustment

The two new approaches – copay accumulator adjustment approach and copay maximizer approach – vary in the distribution of the program’s maximum value.

Copay accumulator adjustments

These apply drug coupons toward copayments as needed until the maximum value is met. Once met, the patient begins out-of-pocket payments toward the deductible and out-of-pocket maximum.

Copay maximizers

These equally spread the maximum value in monthly installments throughout the benefit year. For example, a program with maximum of $15,000 will contribute $1,250 per month in a 12-month benefit year. When the maximum value is met within each plan period (i.e., each month), the patient begins out-of-pocket payments, counting toward the deductible and out-of-pocket maximum, to cover the balance.

Both approaches provide a larger profit to the payers, who are now collecting copay coupons in addition to deductible amounts.

Below is a hypothetical example to illustrate the impact of copay accumulator adjustments compared to traditional copay programs.


RX Cost $4,000
Deductible (paid only once per benefit period) $2,000
Out-of-Pocket Maximum $4,000
Patient Coinsurance after Deductible is met 25%
Copay Assistance Program Covers 100% up to Maximum $10,000

Traditional Copay Assistance Program

With contributions counting toward the One-Time Deductible and Out-of-Pocket Maximum, the traditional approach to Copay Assistance pays 100% of prescription costs up to $10K. In January, the traditional Copay Assistance Program contributes $2.5K to cover the $2K deductible plus the $500 coinsurance due (i.e., 25% of the remaining $2K balance for the prescription). In February, the traditional Program contributes $1K to cover the coinsurance that is due for the prescription (i.e., 25% of the $4K prescription cost). The traditional Program then contributes $500 in March and has reached the patient Out-of-Pocket Maximum for the benefit year. The Plan is then responsible for all remaining costs through the benefit year, contributing a total of $44K. In this scenario, the Manufacturer spends $4K and allows a patient complete drug coverage for an entire benefit year without any out-of-pocket contributions by the patient.

Month RX Cost Plan Contribution Copay Assistance Patient
January $4,000 $1,500 $2,500 $0
February $4,000 $3,000 $1,000 $0
March $4,000 $3,500 $500 $0
April $4,000 $4,000 $0 $0
May $4,000 $4,000 $0 $0
June $4,000 $4,000 $0 $0
July $4,000 $4,000 $0 $0
August $4,000 $4,000 $0 $0
September $4,000 $4,000 $0 $0
October $4,000 $4,000 $0 $0
November $4,000 $4,000 $0 $0
December $4,000 $4,000 $0 $0
Total $48,000 $44,000 $4,000 $0


Copay Accumulator Adjustment

With zero contributions counting toward the One-Time Deductible and Out-of-Pocket Maximum, the Copay Accumulator Adjustment approach to Copay Assistance pays 100% of Coinsurance costs up to $10K. In January and February, the Copay Assistance Program covers the full $4K prescription cost. In March, the Program pays an additional $2K and has reached the $10K plan maximum. The patient contributes $2K to cover the balance of the prescription cost in March and has met the deductible. In April and May, a $1K coinsurance is due for the prescription and the Out-of-Pocket Maximum is met in May. For the remainder of the benefit year, the Plan is responsible for all costs. In this scenario, the manufacturer spends $10K, which is $6K more than the traditional program, and covers the full drug cost for only 2 months. The patient out-of-pocket cost has also increased, jumping from $0 to $4K, while the plan cost has decreased from $44K to $32K.

Month RX Cost Plan Contribution Copay Assistance Patient
January $4,000 $0 $4,000 $0
February $4,000 $0 $4,000 $0
March $4,000 $0 $2,000 $2,000
April $4,000 $3,000 $0 $1,000
May $4,000 $3,000 $0 $1,000
June $4,000 $4,000 $0 $0
July $4,000 $4,000 $0 $0
August $4,000 $4,000 $0 $0
September $4,000 $4,000 $0 $0
October $4,000 $4,000 $0 $0
November $4,000 $4,000 $0 $0
December $4,000 $4,000 $0 $0
Total $48,000 $32,000 $10,000 $4,000


Industry impacts from copay assistance changes

Specialty drug patients rely on manufacturer drug coupons to meet deductible and out-of-pocket obligations and adhere to their prescriptions. As plans begin to adjust for the use of drug coupons as separate from required patient out-of-pocket contributions, patients will quickly see large increases in out-of-pocket copayments. This will result in unaffordable treatment for specialty drug patients. Copay accumulator adjustments and copay maximizer programs introduce a new risk to industry revenue, while payers begin to see larger profits in these scenarios. It remains to be seen if or how the industry will push back against payers, perhaps through a new copay assistance program approach, to avoid decreases to prescription volumes and sales.

For more insight into these controversial health benefit plan changes and manufacturer impact, please contact Emily Turturici.