Finsights Blog

Real Life Chutes and Ladders: The Reality of Co-Pay Accumulators

Part 1 in a Series

PBMs are constantly developing new offerings to attract and retain their customers as they face the challenge of managing pharmacy costs while still making a profit – made increasingly difficult by increased calls for transparency in the world of drug pricing.  One of the latest innovations to take root is co-pay accumulator programs, which track the portion of a patient’s co-pay or co-insurance paid directly from the patient versus that paid for by the manufacturer’s sponsored co-pay card.  In a benefit design utilizing a co-pay accumulator, only those funds which are paid directly from the patient accrue toward the patient’s deductible and out-of-pocket maximum.  This can create a “Chutes and Ladders” experience for patients, as they expect to be climbing the ladder toward their deductibles and out of pocket maximums, then fall down the chute several script fills later when their insurance tells them that none of the funds paid for by a manufacturer’s co-pay card accumulated toward their benefit.

There are several co-pay accumulator programs offered by PBMs, the marketing of which focus on the damaging cost impact of manufacturer co-pay card programs in categories where there are lower cost branded or generic alternatives. These marketing tactics are often misleading, causing the audience to believe that co-pay card programs serve no purpose other than to allow manufacturers to minimize pharmacy benefit utilization management strategies. For example, the following statements are used by Express Scripts to convince plan sponsors of the dangers and costs of co-pay card programs:

This marketing tactic reimburses patients who have prescription-drug coverage for the cost of their co-pay if they choose the higher-priced brand drug instead of the option preferred by their plan sponsor,


A 2011 study from PCMA found that co-pay coupons will increase 10-year prescription drug costs by $32 billion for employers, unions, and other plan sponsors if current trends continue.

Although these statements may hold some truth in crowded categories where branded drugs offer co-pay cards to compete with lower cost therapeutic alternatives, the co-pay accumulator programs sold today are employed across all therapeutic categories—including oncology and specialty therapeutic categories which often have few or no therapeutic alternatives for patients, and are frequently plagued with adherence and compliance challenges.  Employers have opted to implement these co-pay accumulator programs to satisfy their desire to manage the cost of the pharmacy benefit, and their fear of the ever-increasing costs of specialty products. In some cases, this may occur without plan sponsors clearly understanding the potential impact to patients in therapeutic areas that serve complicated patients with few, if any, alternatives.

In therapeutic areas without competition, PBMs and plan sponsors have relied on manufacturer co-pay cards which allow the plan to place specialty products on the highest tier, thus reducing the cost to the plan sponsor while minimizing the impact to the patient, especially where patients have benefit designs featuring high deductibles and/or co-insurance.  Manufacturer co-pay cards are often used in this way to support commercial patients with chronic diseases who require expensive therapy where there are no other therapeutic options, and have served to improve adherence and compliance on expensive therapies.

In 2017, 51% of covered workers had a deductible over $1,000, with almost half of those (22%) experiencing deductibles of $2,000 and higher, up from 34% and 14% in 2012, respectively[i]. Equally importantly, out of pocket (OOP) maximums have also been increasing with nearly one fifth of commercially insured patients paying out of pocket until they contribute $6,000 or more[ii].

With a co-pay accumulator in place, a patient will be liable for a greater share of the drug cost over the course of a year, but the increase will generally not occur until several months after they begin treatment (once the manufacturer’s annual co-pay maximum is reached).  Additionally, the increase will not be gradual: once a manufacturer’s co-pay card has provided its maximum benefit for the year, the patient will be responsible for the full drug cost until their deductible is met, as none of the co-pay card funds had accumulated toward the patient’s out-of-pocket maximum. This means that, for many high-cost specialty products, patients will pay their full deductible when filling a script after several months of receiving treatment at a much more manageable cost to the patient, which will continue until they hit their out-of-pocket maximum.

In 2016, one analysis showed that abandonment rates of commercial patients on branded drugs was 9% in plans with no deductible, increasing to 27% for specialty brands where the benefit design has any deductible.  Drug cost is cited as the chief reason for abandonment[iii]. Analysts found that abandonment rates for brands are 250% higher when patients are in the deductible phase of their plan and suffer the full cost of medicine, whereas fewer than one in ten patients abandon those prescriptions at pharmacy when the patients’ cost is under co-insurance or a co-pay.  In delving deeper into the issue of adherence, a Kaiser Family Foundation poll found that 27% of insured patients report a medication’s cost as the main reason for not filling a prescription[iv].  In a world where 27% of patients report medication cost as the main reason for not filling a prescription, PBMs would be wise to conduct long-term analyses to uncover in what therapeutic areas co-pay cards support the health of their patients by decreasing abandonment, which have the potential of decreasing healthcare utilization costs such as ER visits and hospitalizations.

As already noted, there are several implications of co-pay accumulators, some of which have been discussed here.  In this series of blogs, we will visit the implications of co-pay accumulators across the 5 Ps—patients, prescribers, products, pharmacies, and payers—and discuss in more detail the Chutes and Ladders reality that it causes. Stay tuned for more – or connect with us if you’d like to discuss how co-pay accumulators may impact your product, and how Blue Fin Group can help your team understand and manage the risk.


[i] Kaiser Family Foundation, Employer Health Benefits Annual Survey Report 2017, Figure 7.12

[ii] Kaiser Family Foundation, Employer Health Benefits Annual Survey Report 2017, Figure 7.43

[iii] IQVIA, Medicines Use and Spending in the US, May 2017, p5, 27

[iv] Rebecca Mayer Knutsen, The Co-Pay Card Debate Simmers, As Payers Push Back, August 2016





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