Column: They’re called ‘co-pay accumulators,’ and they’re a way insurers make you pay more for meds

As use of discount coupons for prescription drugs grows, insurers are responding by not counting the coupons against a patient’s deductible.
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Mary Hawley takes the widely used drug Humira for her rheumatoid arthritis. It can cost tens of thousands of dollars a year, but for nearly a decade Hawley has been assisted with discount coupons from the drug’s manufacturer, AbbVie.

“You pay $5 max,” she told me. “They pay whatever is left over.”

Another plus: The coupons would be applied to Hawley’s $6,800 insurance deductible, meaning her responsibility for out-of-pocket costs typically would be met before summer.


That’s changed — for Hawley, 62, and for millions of other people who depend on drugmakers’ co-pay-assistance programs to afford costly meds.

Many insurers are introducing so-called copay accumulators to their plans. What this means is that coupons no longer will be counted toward patients’ deductibles.

In Hawley’s case, one upshot is she’ll no longer meet her deductible in any 12-month period, barring catastrophic illness. Her insurer, HealthNet, thus won’t need to pay any claims.

“It seems unfair,” Hawley said. “It shouldn’t matter to them who’s paying my deductible, as long as it’s being paid.”

HealthNet didn’t respond to a request for comment.

It would appear that co-pay accumulators allow insurers to double dip: They get their full co-pays and they get to extend the duration of patients’ deductibles.

However, healthcare experts caution the situation is more complicated than that.

Vivian Ho, a healthcare economist at Rice University, said pharmaceutical companies will feel no pressure to lower drug prices, particularly for expensive specialty drugs, unless patients are unable to afford them.


Co-pay accumulators allow insurers and the pharmacy benefit managers that haggle on their behalf to maintain economic leverage in negotiations with drugmakers, she said.

Drugmakers’ coupons, Ho said, “encourage overutilization of high-priced drugs.”

Insurers make the same point. Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, an industry group, said coupons are nothing more than “a marketing scheme leveraged by Big Pharma to keep drug costs high for everyone.”

“The true issue remains that drug pricing continues to skyrocket, with no clear explanation on how those prices are set,” she said. “Co-pay coupon programs hide the true impact of rising prescription drug costs.”

That’s correct. But it’s also correct that coupon programs are a direct response to insurers repeatedly jacking up people’s co-pays and deductibles.

Drug companies argue that they’re just trying to level the playing field as patients shoulder a greater share of healthcare costs.

“Co-pay accumulator programs are nothing more than an insurance scheme that leave patients financially exposed while benefiting payers’ bottom lines,” Stephen J. Ubl, president of the Pharmaceutical Research and Manufacturers of America, said in a statement.

Both sides make fair points. It’s hard not to suspect, though, that they’re both motivated by self-interest rather than patient welfare.

The insurers and pharmacy benefit managers, they’re obviously making out like bandits.

But drug companies win no points for upstanding behavior. Their coupons allow them to maintain absurdly high prices as a starting point for their dealings with insurers, and to stick insurers with bloated costs. Pharmaceutical companies are doing everything possible to avoid price cuts.

“There are no good guys here,” said Geoffrey Joyce, a pharmaceutical economist at USC. “This is about control of the market.”

The only thing that’s clear is who loses.

“The loser is the patient,” Joyce said.

The average health-insurance deductible for individuals with employer-provided coverage reached $1,505 last year, compared with just $303 in 2006, according to the Kaiser Family Foundation. Deductibles for family plans are even higher.

Meanwhile, pharmaceutical and biotechnology revenue jumped 45% from 2006 to 2015 as drug prices soared, according to a recent report from the Government Accountability Office.

The 25 largest drug companies enjoyed annual average profit margins of 15% to 20%, compared with average profit margins of 4% to 9% for the largest non-drug companies, the report found.

I get that insurers feel they need to turn the economic screws on price-gouging drug companies. Nobody is going to give the pharmaceutical industry a Humanitarian of the Year award.

But insurers and pharmacy benefit managers seem to be prospering most here, entirely at the expense of patients, not the pharmaceutical companies they’re battling.

“Both sides are complicit,” USC’s Joyce said. “But I’m less sympathetic to the insurers and PBMs.”

He said the companies are holding patients hostage, using people’s inability to meet deductibles as a way to shame drug makers into slashing prices.

I put that to Donaldson at America’s Health Insurance Plans.

“The bigger question is why do we need co-pay coupons at all?” she countered. “It’s very important to recognize the problem starts with the price. That is the real underlying problem.”

So we’re in this chicken-or-the-egg situation. Are co-pay accumulators a response to crazy-high drug prices, or are drug companies’ coupon programs a response to crazy-high deductibles and co-pays?

For most patients, it’s a meaningless question. Their only concern is how they can obtain potentially lifesaving meds without courting personal bankruptcy.

For that reason, Hawley has no doubt her insurer is cheating her with its new co-pay accumulator and that AbbVie, the maker of her medicine, is her friend.

“I feel really good about AbbVie contributing to the cost of my drug,” she said.

Even though that’s a cost set by the company, a cost that has doubled since 2012, according to market researcher SSR Health.

Yes, drug prices are often too high. And yes, the onus should be on pharmaceutical companies to stop fleecing sick people for no better reason than because they can.

But insurers have no business stripping patients of an opportunity to obtain drugs at reasonable prices.

If they want to duke it out with drug makers, great. Give ‘em hell.

But leave us out of it.

David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to