Anna Sutton was shocked when she received a letter from her husband’s health plan saying that Humira, an expensive drug used to treat her daughter’s juvenile arthritis, was now on a long list of drugs considered “non-essential benefits.”
The July 2021 letter stated that the family could either take part in the new campaign overseen by SaveOnSP and receive the drug for free, or receive a monthly co-payment that could exceed $1,000.
“It really left us no choice,” said Sutton of Woodinville, Washington. She added that “every FDA-approved juvenile arthritis drug” was on the list of non-essential benefits.
Sutton has unwittingly become part of a strategy employers are using to deal with the high cost of prescription drugs for conditions like arthritis, psoriasis, cancer and hemophilia.
These employers are using dollars provided through programs they have previously criticized: patient financial assistance initiatives created by drug makers that some benefit managers have complained encourage patients to stay on expensive brand-name drugs when less expensive options may be available.
Now, however, employers or the providers and insurers they hire specifically to oversee such efforts are looking for that money to offset their own costs. Pharmacists object, saying that the money was intended primarily for patients. But some benefit brokers and companies like SaveOnSP say they can help cut employers’ insurance costs, which they say could be the difference between whether an employer offers insurance coverage to workers or not.
This is the latest twist in a long-running dispute between the pharmaceutical industry and insurers over which group is more to blame for rising costs for patients. And patients, again, are caught in the middle.
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Patient advocates say the term “minor” is stressful for patients, though that doesn’t mean drugs – often called “special” drugs because of their high price or the way they’re made – aren’t needed.
Some advocates fear the new strategies could be “a way to weed out those who need costly medical care,” said Rachel Klein, deputy executive director of the AIDS Institute, a non-profit advocacy group. Workers who rely on drugs may feel pressure to change insurers or jobs, Klein said.
There are two versions of the new strategy in the game. Both are used primarily by self-insured employers who hire providers such as SaveOnSP who then work with employers’ drugstore benefits managers such as Express Scripts/Cigna to implement the strategy. There are also smaller providers such as SHARx and Payer Matrix, some of which work directly with employers.
In one approach, insurers or employers continue to cover drugs but designate them as “non-essential”, allowing health plans to circumvent the Affordable Care Act’s annual limits on how much patients can pay out-of-pocket for drugs. . The employer or hired provider then raises the copay required of the worker, often dramatically, but offers to substantially reduce or eliminate the copay if the patient takes part in the new effort. According to a lawsuit filed in May by drugmaker Johnson & Johnson against SaveOnSP, workers who agree to enroll in drugmaker financial assistance programs designed to cover drug co-payments and a provider controlling efforts seek to receive the maximum amount the drugmaker provides annually. based in Elma, New York.
The employer still has to cover a portion of the cost of the drug, but this amount is reduced by the amount of the copay you receive. This assistance can vary greatly, up to $20,000 a year for some medications.
In a different approach, employers don’t bother labeling drugs as non-essential; they simply end coverage for certain drugs or classes of drugs. The external provider then helps patients provide the financial and other information needed to apply for free drugs from drug manufacturers through uninsured patient charitable programs.
“We’re seeing this in every state right now,” said Becky Burns, chief operating officer and chief financial officer of the Institute for Bleeding and Coagulation Disorders in Peoria, Illinois, a federally funded hemophilia treatment center.
The strategies are primarily used in self-insured employers’ health plans, which are governed by federal laws giving employers wide flexibility in designing health benefits.
However, some patient advocates say these programs can lead to delays in patient access to medicines while applications are being processed, and sometimes unexpected bills for consumers.
“We have patients who are billed after they maximize their care,” said Collet Culianos, vice president of payer relations at the National Hemophilia Foundation. As soon as she intervenes, she says, sellers often claim that invoices were sent by mistake.
While only about 2% of the workforce needs the drugs, which can cost thousands of dollars a dose, they can lead to serious financial liabilities for self-insured employers, said Drew Mann, a Knoxville, Tennessee-based benefits consultant whose clientele includes employers who use options. these programs.
Before employers’ health plans took advantage of such assistance, patients often signed up for these programs on their own, receiving coupons that covered their share of the cost of the drug. Under these circumstances, drug manufacturers often paid less than under the new employer schemes because the patient’s out-of-pocket expenses were limited to lower amounts.
Brokers and executives from firms offering new programs say that in most cases, patients continue to get their drugs, often at little or no out-of-pocket cost.
If workers are not eligible for charity because of too high income or for another reason, the employer can make an exception and pay the claim or look for an alternative solution, Mann said. Patient groups noted that some specific drugs may not have alternatives.
How this practice will affect the long term is still unknown. Drug makers are offering both co-payments and philanthropic care in part because they know that many patients, even those with insurance, cannot afford their products. The programs also have good public relations and tax write-offs. But some employers’ renewed focus on maximizing the amount they or their insurers can get from programs may cause some drug makers to disagree with new strategies or even rethink their programs.
“Even though our client, like most manufacturers, provides billions of discounts and refunds to insurance companies as part of their negotiations, insurers also want this additional pool of funds, which is designed to help people who cannot pay the co-payment.” said Harry Sandyck, a lawyer representing J&J.
The J&J lawsuit, filed in the U.S. District Court in New Jersey, alleges that patients are “coerced” into co-pay assistance programs after their medications are deemed “non-essential” and therefore “no longer subject to the annual maximum ACA cash.” “.
According to the lawsuit, after the patients register, the money from the drug manufacturer goes to the plan of the insurance company or employer, while SaveOnSP retains 25%, according to the lawsuit. It claims that J&J lost $100 million due to these efforts.
None of this money counts towards patient deductibles or yearly cash maximums.
In addition to the copay relief lawsuit, there have been other reactions to new employer strategies. In an October letter to doctors, the Johnson & Johnson Patient Assistance Fund, a separate organization, said it would no longer offer free drugs to insured patients from January, citing a rise in such “alternative funding programs.”
However, a spokesman for J&J LD Platt said the drug maker has plans, also in January, to roll out other assistance to patients who may be “underinsured” so they won’t be affected by the fund’s decision.
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SaveOnSP said in a statement that employers object to drug companies “using their employees’ continued need for these drugs as an excuse to further raise drug prices” and that the firm is simply “advising these employers on how to deal with price increases.” prices while providing workers with the medicines they need free of charge.”
In the lawsuit, SaveOnSP said drug makers have another option if they don’t like insurers and employers trying to make the most of what they can get from programs: reduce the amount of assistance available. J&J did just that, the statement said, when it recently reduced the allocated co-pay for psoriasis medications Stelara and Tremfya from $20,000 to $6,000 per member per year. The application noted that SaveOnSP members would still not receive co-payments for these drugs.
As for Sutton, her family did participate in the program offered under her husband’s work insurance plan, agreeing to have SaveOnSP monitor their registration and payments from the drug manufacturer.
So far, her 15-year-old daughter has continued to receive Humira and has not been billed for the co-payment.
Despite this, “the whole process feels kind of slippery to me,” she said. “Patients are caught in the middle between the pharmaceutical and insurance industries, each trying to get as much money as possible from the other.”
Kaiser Health News is a national health policy news service. It is an editorial independent program of the Henry J. Kaiser Family Foundation and not affiliated with Kaiser Permanente.