Patient assistance dollars from pharmaceutical companies have been a growing area in recent years. Assistance dollars have risen exponentially as pharmaceutical companies work to get patients on their medications and use this funding as a political talking point for patient access. Patient assistance programs claim to lower costs for patients and increase medication adherence.
Logic tells us prescription drug prices must increase to account for these assistance programs. With plan sponsors paying for a large majority of prescription drug costs, it’s easy to understand why some plan sponsors will consider or contract with an assistance vendor that helps employers capture value from these programs.
As a not-for-profit purchasing cooperative owned and governed by our members, National CooperativeRx has spent a lot of time assessing this new marketplace dynamic. To capture value, a few members have engaged with an assistance vendor, a few have left the Cooperative to fully engage an assistance vendor, and more are beginning to implement PrudentRx, offered by CVS Health.® When analyzing one of these assistance vendor setups, there are several important aspects for plan sponsors to consider.
Check With Legal
There’s a range of options for plan sponsors to capture assistance dollars. On one end is a program like PrudentRx. It helps plan sponsors save money while eliminating member cost share for specialty medications. PrudentRx uses a specialty copay plan design strategy that maximizes the impact of non-needs-based manufacturer copay cards. PrudentRx is integrated into CVS Health’s claims system and works in conjunction with other aspects of a plan’s existing pharmacy benefit offering. It allows a plan to maintain the integrity of the formulary, prior authorization requirements, and other utilization management, including the National CooperativeRx suite of custom clinical services.
On the other end of the spectrum, plan sponsors can get more aggressive and attempt to capture funds from non-needs and needs-based funding programs. By changing plan coverage and excluding classes of medications, such as specialty, plans can force participants through an alternative funding vendor for coverage. The plan may then come back and provide an exception to patients to fill any gaps in the alternative funding program.
Assistance vendors will make this process sound seamless and maybe some vendors can make it easy for the plan and patients. Regardless, there are several complexities in play plan sponsors need settled before deploying a program. We have heard many anecdotes of poor customer service, inflated savings estimates, and accumulation difficulties with these vendors. Legal counsel well versed in the Employee Retirement Income Security Act of 1974 compliance, discrimination rules, and IRS rules should be engaged from the beginning to make sure the plan stays in compliance.
- Many programs are income based and patients with higher incomes will not qualify. There are consequences if a plan’s coverage favors highly compensated employees.
- A plan excluding coverage for certain medications may be at risk of discrimination based on race, color, religion, sex, national origin, or disability.
- Employee benefits provided outside of a written plan document would likely be taxable to the employer and the employee.
- How will delays in care be handled? Proof of financial eligibility and changing pharmacies can result in significant delays to the medication being filled.
Check the Math
The assumptions used to build the savings analysis of an assistance vendor setup are critical. For plans receiving 100% pass-through of rebates, broadly defined, such as National CooperativeRx members, calculating the lost rebate value alone changes the dynamic provided by assistance vendors. Also, the basis of the vendor’s fee calculation likely does not factor in what the plan would have received in rebates, thus leaving the cost of the medication at a higher level.
It’s well known the cost of individual prescription drugs has skyrocketed with the approval of certain specialty therapies. These high-cost medications can make or break a savings calculation. It’s not uncommon for funding to be unavailable for periods of time, especially if foundations or charities are leveraged. Look into the dynamics of these medications.
- When is competition for this medication expected that could alter the cost structure? Are there lower net cost alternatives currently available?
- What happens if assistance dries up? What does the overall savings calculation look like?
- Will reinsurance cover high-cost medications provided as an “exception” to the plan if the plan considered them “not covered” on the front end in hopes of coverage by an assistance program?
A drawback of excluding products or drug classes is management tools, such as formulary, which may be lost or diminished, and the lowest-net-cost strategies foregone. Is the assistance vendor providing this management tool to drive patients to the lowest-cost, highest-quality option for the plan and the patient?
Read the Contract
A plan contracting with an assistance vendor should follow the same process as one contracting directly with a pharmacy benefits manager; read and be sure to understand the contract to confirm the terms of the agreement. Discussions leading up to the program implementation should be accurately captured in the contract or the calculations to confirm the benefit of the program will not match actual results.
Recently, we heard from an employer who questioned their assistance vendor’s calculation of the percentage of savings fee. When the plan sponsor asked how the fees were calculated, the vendor would only provide the total savings multiplied by the percentage fee. No details were provided on how the savings were calculated. When the plan sponsor demanded more transparency and threatened to terminate the contract, the vendor referred to a provision of the contract that allowed them to charge for the expected revenue over the remainder of the three-year contract. Buyer beware!
- Confirm how the fees will be calculated and what transparency will be provided.
- Will savings be calculated as a percentage of savings or a flat fee?
- Will savings be calculated off AWP or after discounts and rebates?
- Will the vendor work towards generics or other lower-cost alternatives when they enter the market and how will these new entrants impact the fee calculation?
- Are the medications sourced through the United States or internationally? If internationally, what controls are in place to monitor the medications’ safety?
Assistance programs fill an important role in providing prescription drugs to the uninsured, underinsured, and individuals who cannot afford their cost share. These programs have gone much further and are now part of the long list of games played by pharmaceutical manufacturers. Complexities in the prescription drug industry have allowed new vendors to arrive and benefit from these dynamics. With these vendors, plan sponsors now have an avenue to access these programs for their plan. It is anyone’s guess how long these dynamics will last. To offer a sustainable benefits package to employees, be diligent in your assessment of these vendors. If you have questions about a comparison being ‘apples to apples,’ National CooperativeRx is here to help.
