As the January 1, 2023, effective date for the CMS Final Rule on manufacturer coupons and Best Price approaches, the pharmaceutical industry still remains largely unclear on how to solve the new challenges it creates. In a recent webinar, we unpacked the operational limitations, vague measurement, enforcement methods, and implications of the ongoing legal battle between PhRMA and CMS. From the questions we received during the webinar, it’s clear that many manufacturers are struggling to find ways to manage compliance while still maintaining cost-sharing support. 

We received so many great questions from attendees (enough to create an entirely separate webinar if we could!), so we’ve taken some of the questions that deserve a little extra time and attention to answer. If you’re a manufacturer that is also concerned about the potential impact of copay programs on Best Price, this information may be extremely helpful for you.


Q: What are some of the risks created by alternate program models compared to traditional pharmacy benefit copay programs?

Jason Zemcik: Alternate reimbursement models outside of the pharmacy claim afford the manufacturer significantly less control over the use of funds. Under NCPDP claim processing standards secondary claims are adjudicated in a consistent manner. When making direct payments to patients or funding post-transaction rebates, the manufacturer cannot fully control how the patient ultimately uses the funds. 

Another significant challenge in alternate program models is the ability to impose government exclusion and anti-kickback controls are significantly diminished when there is not a pharmacy claim involved. In most copay programs these controls are applied in real-time at the point of adjudication. If a manufacturer is forced to shift to a full rebate model without a pharmacy copay claim they lose that ability and must rely on patient attestation and visual inspection of patient insurance cards as part of claim processing, which creates a greater risk of error. 

There is also an increased risk of fraud when dealing with patient-submitted claims. Patients could falsify claim documents such as receipts to attempt to gain additional benefits beyond what is allowable under program business rules. 


Q: What do you anticipate being the ultimate outcome for this rule, the lawsuit, and the overall issue?

Jason Zemcik: This is a hard question to answer simply because there are no clear-cut indicators from either CMS or the court hearing that challenges the rule. Historically we have seen drug pricing rules get delayed close to their implementation date for a variety of factors including operational challenges in implementation.  These delays have been driven by a lack of synergies or data consistency among multiple stakeholders needing to collaborate to successfully implement the rule, which is an issue at play in this scenario. 

We have also recently seen courts grant temporary injunctions as the effective date of rules approach. That was the case at the end of 2020 with the Most Favored Nation rule. 

All of this is to say that the future of this issue remains very uncertain. One critical point for pharmaceutical manufacturers to remain aware of is that they should plan for the rule to go into effect on January 1, 2023 as currently scheduled. Delaying decisions around program modifications based on the ongoing legal challenge could place the manufacturer in a position where they are unprepared for the effective date should no changes or delays occur. 


Q: If a program converts to a full rebate model with no pharmacy copay component, how can patients be effectively screened for anti-kickback compliance?

Jason Zemcik: Anti-kickback controls become increasingly more challenging if a program converts to a full rebate model without a pharmacy copay claim. This is because the program loses the ability to incorporate data-driven claim edits in real time to screen for government-insured patients. In lieu of the electronic claim edits, programs could require patients to enter insurance information at enrollment and screen that input using either internal databases from their copay program provider and/or external third-party service providers that have plan information. It is important to note that many of these service providers will be able to provide names and additional information about the patient’s plan but not make a firm determination as to whether it is government-sponsored coverage. Manufacturers utilizing a full rebate model should also require patients to include a copy of their insurance card as part of their claim submission. This will allow for another layer of screening when the claim is reviewed before being approved for payment. 


Q: Do you see any change in how maximizers are designed and do you see them passing the costs onto patients?

Jeff Baab: While CMS addresses “accumulator” programs multiple times in the preamble to the Final Rule, it does not explicitly address “maximizer” programs. Each manufacturer may need to assess “maximizer” programs and determine whether some portion of the copay support is being realized in some way by the payer.


Q: Is this a concern primarily for specialty therapies (based on the prevalence of accumulators or maximizers), or a more broad challenge, regardless of the type of product? 

Jason Zemcik: From our experience, it’s a concern across the board. When we look at our program data, all therapeutic classes have been impacted. Obviously, this is primarily a specialty issue, just due to the nature of the cost. When you think about accumulators and maximizers, they are cost-saving and cost-shifting tools. So, the greatest opportunity exists there, but we haven’t seen it unique to any particular therapeutic class, or any excluded really. It impacts all to varying degrees, but there are none that are really immune from it.

Jeff Baab: To add on the GP side is the Best Price, we always need to remember that any one transaction can impact Best Price. It doesn’t need to be a prevalence of it, but if the accumulator program potentially is in place for any one plan that may affect a patient getting your product, this is a concern. 


Q: Is the data/portal fees asked by GPOs counted towards Best Price?

Jeff Baab:  I think there’s no “yes or no” answer to that one. That one tends to be more about an individual manufacturer and how they approach their bona fide service fee evaluation. We have seen some manufacturers go both ways with different sets of assumptions and reasonable assumptions. Unfortunately, that’s one that’s going to be taken on a case-by-case basis.


Q: Are the big 3 PBMs able to skirt the ASP rule if the copay assistance is flowing through a 3rd party (i.e. – SaveOn, Prudent, etc)

Jason Zemcik: We’ve seen different interpretations. There’s one school of thought that in those cases, obviously, the plan sponsor is realizing a savings and therefore, the value of the copay offer has to be counted toward best price. There are also other schools of thought that say because those programs operate outside of the plan’s traditional plan or benefit design that would be the patient’s obligation regardless of how it’s paid. Therefore, those would not be impacted by this rule. I will say the latter point of view, we’ve seen less of.

Most manufacturers we work with are taking the approach that you do have to account for maximizer programs as well. But it depends on how you view it. And I think ultimately too how you, your counsel and your outside counsel and everyone you get advice from substantiating your position on that.


Q: How ready and capable are retail pharmacies to handle these new types of affordability structures like debit cards, direct reimbursement, etc.?

Jason Zemcik: How this rule will affect retail products is another of the large unknowns around this topic. Historically retail products have not been considered prime accumulator targets due to their cost profile and not presenting an attractive savings opportunity for plan sponsors via imposing accumulator adjustments. However, with manufacturers having to meet the standard of “ensuring” program benefit goes entirely to the patient in all cases, some are interpreting this as having to assume worst-case scenario that all patients and products are impacted which opens the possibility that a patient filling a retail product could be affected by accumulators.

One disadvantage in a retail setting is that the patient must make payment in order to leave the store with the product. This contrasts with many specialty dispensing scenarios that occur over the phone and via mail order where there is at least some time between activities that would enable equipping patients with alternate payment methods or more easily facilitating a rebate. In short, a switch to any of these alternate models would absolutely be disruptive to the retail pharmacy environment and could very conceivably be seen as a negative by retail pharmacies that are already pressed for time without having to learn and adapt to a new copay assistance model.


Q: How are you thinking about the copay transaction Class of Trade in your Best Price calculation?

Jeff Baab: Being able to quantify and apply the impact of copay programs in Best Price in a systematic way will present some challenges, from simply identifying the relevant data to incorporating it into the filter-driven calculation methodologies. I tend to think of programs like copay as being different than a customer, to whom a Class of Trade is typically assigned. I think that the data associated with a copay program that needs to be incorporated into Best Price may be identified by something like a unique “transaction type” rather than a Class of Trade.


Q: What will be the impact of the removal of the Medicaid Rebate Cap in 2024 on 340B sales? Will there be negative 340B sales?

Jeff Baab: My perspective on that is that it’s probably still going to result in penny pricing absent any other regulatory or guidance change in the 340B arena. My expectation would be that we probably wouldn’t see negative pricing as much as we would probably still see the penny pricing within the 340B channel like we see today.


Q: Do you see manufacturers pivoting toward e-vouchers over traditional copay due to this?

Jason Zemcik: I think there may be some of that, but I think the one thing that will prevent that from just being a simple catch-all solution is the pack of pharmacy network alignments and which switches, which pharmacies are contracted with which switches, and ability to impact all patients because again, what you have to remember to address this particular rule change is the fact that you don’t have the ability to really allow one patient to slip through the cracks so to speak. It’s definitely something we hear in the marketplace, and I think there is a utility for those tools. And there will be a place, there will be some of that, but I don’t think from a patient access and affordability standpoint, I certainly don’t think that it’ll meet the entire need.


Q: Given the impact on Best Price do you see manufacturers potentially transitioning their investment in copay structures to foundations? Would this enable them to continue supporting patients without BP implications?

Jeff Baab: The CMS Final Rule did modify the exemption criteria for free goods and patient assistance programs to read that they are excluded from Best Price but only to the “extent that the manufacturer ensures… the full value of the voucher or benefit of such a program is passed on to the consumer.” Manufacturers may find that while foundations/patient assistance programs do help patients afford therapies, these programs may not serve a manufacturer’s commercial strategies effectively since manufacturers are not able to influence how the value of the foundations/patient assistance program is used.


Q: Do you anticipate a trickle effect on the commercial market and payers, or is this limited to government programs? 

Jeff Baab: This issue directly affects the commercial markets. Copay programs are generally only applicable to patients with commercial insurance so this issue will directly impact the commercial markets because it may impact how manufacturers structure their copay support. Indirectly, this issue impacts Medicaid URAs, 340B prices, and ASPs (which may influence reimbursement rates in both government and commercial markets) so this issue may affect both the government and commercial markets.


Q: Do you expect Pharma to eventually get rid of the copay assistance programs?

Jason Zemcik: Given the reality of benefit designs with the increased prevalence of high deductible health plans it seems unlikely that pharma would abandon copay assistance entirely as it is a necessity for many patients to access specialty therapies. I base this on the 2020 Massachusetts Health Policy Commission study on manufacturer coupons, which offered some good information to support this.


Q: On accumulators: Is there a way for a pharmacy to know for sure if a patient has an accumulator when they run a test claim?  What about on the medical benefit side?

How will CMS actually know an accumulator/high copay transaction actually occurred? 

Jason Zemcik: This brings to light one of the core operational challenges in complying with this rule. There is not a single-source database of accumulator plan information. Therefore, at the time of program enrollment or claim adjudication, the pharmaceutical manufacturer is not able to know with complete certainty whether a patient is accumulator impacted. Because the adjustment occurs after the claim has been adjudicated, often when a period of time has elapsed, this puts the manufacturer in a position of not being able to control if funding from their program is diverted by an accumulator benefit design. 

This is similar on the medical benefit side. While accumulator adjustments have not made their way prevalently to provider-administered therapies covered under the medical benefit, there have certainly been attempts by insurers to do so and many have a belief that at some point insurers will seek additional ways to impose accumulators on medical benefit products as well. At the end of 2020, UnitedHealthcare introduced a proposed policy that would have required providers to report patients’ use of copay assistance. This policy was ultimately rolled back, however, if an insurer does place these reporting requirements on network providers the outcome would be the same as with pharmacy benefit products.  Insurers would have the necessary data to perform accumulator adjustments when patients use copay assistance. In lieu of physician reporting requirements, many insurers have imposed stricter specialty product sourcing requirements such as mandatory white bagging – requiring specialty products to be sourced through the insurer’s preferred specialty pharmacy as opposed to the traditional buy and bill model for provider administered therapies. This allows the insurer to maintain control of the claim and have the data necessary to achieve the same outcome. 

How CMS will know if patients are accumulator impacted or ultimately if manufacturers have reported pricing information compliant with the rule is also unknown. The final rule does not offer specific guidance or instructions on this and in our conversations with several pharma finance and price reporting teams, there is not a single methodology that is generally understood as the correct way. This highlights another issue with this rule in that it simply creates confusion around what is and is not a compliant methodology for reporting. 


Q: Is Medical benefit pricing calculated into pharmacy benefit Best Pricing?

Jeff Baab: I think this question is getting into the differences in drugs that face coverage under medical vs. pharmacy benefits. Medicaid rebates and 340B pricing can both be relevant for drugs that are covered by Medicaid benefits when they are administered in an outpatient setting. In this way, Best Price can definitely be applicable for branded drugs covered by medical benefits and this copay/Best Price issue may also be relevant.


Q: Are maximizers a focus of the Best Price rule or just accumulators? Are pharma manufacturers responsible for when maximizers are in place?

Jason Zemcik: Opinions on this vary, though in our experience talking with multiple pharma clients we have seen many more take the position that maximizers are impacted by this rule. The belief is that they are rooted in the fact that under a maximizer program the patient still does not get credit for the copay assistance funds toward their deductible or annual out-of-pocket maximum due to the product being deemed a non-essential health benefit by the plan. 


Q: Is the change to remove the Medicaid URA cap at AMP in Jan 2024 a final decision by CMS?

Jeff Baab: Yes, the change to remove the Medicaid URA cap at AMP was implemented as part of the “American Rescue Plan Act of 2021” with a delayed effective date of January 1, 2024.


Q: Why is the debit/credit card solution alone not advisable? How do PBMs get that amount? How do e-vouchers work and bypass the CMS best price policy?

Jeff Baab: The exclusion criteria for copay programs, as modified in the CMS Final Rule, stipulate that the exemption is predicated on the fact that the “manufacturer ensures the program benefits are provided entirely to the patient.” There is a risk that with a debit card solution, a payer may still be made aware of the copay program and thus it may get applied to a patient that has an accumulator program in place. This creates a risk that these programs may inadvertently need to be taken into account in Best Price.


Q: What is the regulation stating copay should be included in BP calculation?

Jeff Baab: Well, the original regulations from the CMS Final Rule issued in 2020 basically exclude patient assistance programs based on a couple of criteria. One of those criteria is that the full benefit is realized by the patient. The element that is being called into question is whether the patient is truly realizing the full benefit of the program when these accumulator programs are in place.


Learn More

Watch the replay: Solving the Best Price and Copay Challenge – A Framework for Assessment and Action

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About the Author

Jeff Baab

Jeff Baab

Vice President, Advisory Services

Jeff Baab leads IntegriChain’s Operational Consulting organization. Jeff has more than 16 years of experience in Managed Markets, drawing on his extensive compliance and commercial contracting background to best serve the needs of manufacturers. Previously, Jeff was Vice President of Life Sciences at daVIZta, which merged with IntegriChain in March 2019.

About the Author

Jason Zemcik

Jason Zemcik

Vice President and Patient Affordability Practice Lead, TrialCard

Jason is currently the Vice President and Patient Affordability Practice Lead at TrialCard. A frequent speaker, panelist, and author on market and policy developments impacting pharmaceutical manufacturer co-pay assistance programs, he was named to the Medical, Marketing, and Media (MM+M) 40 Under 40 List of healthcare marketers in 2021, and his work has appeared in multiple industry publications. Prior to TrialCard, Jason served seven years as a United States Army officer, deploying to both Iraq and Afghanistan. Jason is a graduate of the United States Military Academy at West Point where he earned a BS in Legal Studies with a minor in Systems Engineering.