PhRMA's court win over HHS could be a boon for pharma patient assistance programs
As out-of-pocket costs have risen for patients in the US in recent years, pharma manufacturers have offered financial assistance — including to those with commercial insurance — to better shoulder these higher costs.
Catching on to the extent of this financial assistance, commercial health insurers have sought to pocket at least some of that extra money, devising complex schemes known as “accumulator adjustment programs,” that basically carve out this pharma assistance when calculating an insured person’s annual deductible and copayment for a drug.
In essence, commercial insurers use an “accumulator” to track an insured patient’s payments toward an individual’s annual out-of-pocket costs. The insurers can then exclude from these out-of-pocket costs any financial assistance received from a manufacturer.
But now a new court ruling from the DC District Court yesterday takes a crack at these accumulators, granting a win to industry lobbying group PhRMA, which sued the federal government over a 2020 rule that would’ve required manufacturers to “ensure the full value of the assistance or benefit is passed on to the consumer or patient” for any financial assistance to an insured patient not to count toward the best price.
The agency had to initially delay the effective date of this rule change until Jan. 1, 2023, because manufacturers had voiced “concern[s] that they may not be able to ensure their manufacturer assistance is going to the patient and not being passed through to the health plan via an electronic means right away.”
The government’s view, however, is that the alleged injuries of PhRMA’s members stem not from HHS’s recent rulemaking, but from the 2007 and 2016 regulations, which means that no PhRMA member has suffered a harm traceable to the 2020 accumulator adjustment rule.
“Put differently, the government argues that manufacturers have long had a duty to include in their best price calculations the effects of accumulator adjustment programs, and thus any harm to PhRMA’s members is traceable to the 2007 and 2016 regulations and not the accumulator adjustment rule (which is the only agency action challenged here). The Court disagrees,” Tuesday’s ruling says.
Judge Carl Nichols explains that because pharma manufacturers must “ensure” that the full value of the assistance stays with the patient, “That new obligation will impose on the manufacturers numerous compliance requirements that will affect pocketbooks. Indeed, even assuming that commercial health insurers share all relevant information with the drug companies, those companies must now adopt mechanisms to ensure that no financial assistance to patients passes off to commercial health insurers (or that, if it does, it is included in the best price calculation).”
He also points to an amicus brief from McKesson noting that “establishing ‘coverage criteria’ to identify whether an accumulator program applies to a particular prescription transaction would prove costly.”
PhRMA president and CEO Stephen Ubl praised the ruling in a statement yesterday, adding:
The decision to vacate the patient assistance penalty – a provision of a Medicaid rule finalized in 2020 – is a win for patients. Manufacturers provide patient assistance to do just that – assist patients and address gaps in insurance – but instead insurers are siphoning that money away for themselves. We will continue to work with policymakers on solutions that make medicines more affordable and lower what Americans pay out of pocket.