A Guide to Patient Financial Assistance Programs

As list prices of drugs rise, patients' out-of-pocket (OOP) spending is also increasing in many instances, leading to concerns about maintaining patient access to medically necessary treatments. Patient financial assistance programs are implemented by drug manufacturers to help manage the cost of their drugs for patients.

Manufacturers are concerned about patient adherence, health outcomes, and medication abandonment, and the impact these factors have on sales and profits. Patient financial assistance programs help offset the financial burden associated with treatment costs to patients, which helps drive product revenue.

Manufacturers aim to ensure patients can access drugs despite barriers such as out-of-pocket costs and insurance coverage limitations. Market access strategies have an important role in drug launches and throughout the lifecycle of a product, financial assistance programs can further help patients start, and stay, on a specific drug.

There are many types of patient financial assistance programs offered by drug manufacturers, each with a focus on different groups of patients. For example, some programs provide free drugs to patients who are new to therapy, while others offer discounts that reduce the cost of prescription copays and coinsurance.

These programs often target patients with private insurance (also known as commercial insurance), Medicare, or no insurance, although patients with Medicare are excluded from receiving certain types of financial assistance from manufacturers. Generally, patients with Medicaid are excluded from patient financial assistance programs, although there are exceptions to this rule.

Payers argue that these programs, typically offered by brand-name manufacturers, are marketing tools to attract more patients to their products over competing and potentially lower-cost options, functioning as a method for gaining market share.

Types of Patient Financial Assistance Programs

There are several types of patient financial assistance. The main categories of these programs are outlined below.

Free Trial Program: These programs offer free drugs to patients who will be using a medication for the first time. Free trial programs are commonly implemented by brand manufacturers when drugs first come to market as a strategy to speed uptake. They can also be used when a brand isn't doing well, giving it a boost in sales. Manufacturers anticipate that patients will stay on the medication after the free trial is over.

These programs are usually open to all patients regardless of insurance coverage, although occasionally, government-funded plans like Medicare and Medicaid are excluded.

Various types of drugs have free trial programs: everything from cancer treatments to blood factor products for hemophilia, to drugs for common conditions like asthma, chronic obstructive pulmonary disorder, and diabetes. The length of the free trial is highly variable, but one-month supplies are most common. Some trial programs are limited to a certain number of doses, instead of a specific timeframe or duration of use.

Bridge Programs: These programs are designed to get around insurance delays and restrictions or short-term gaps where insurance coverage might not be available. For example, bridge programs are used when a new drug enters the market and insurance companies have not decided on its coverage yet. Bridge programs also are used when there is a delay in processing a prior authorization request, or when the request was denied and is being appealed.

Copay Assistance Programs: Often implemented as copay savings cards or coupons, these programs encourage patients to choose the manufacturer's drug by making it more affordable for a specific timeframe by lowering patients’ out-of-pocket costs. Brand manufacturers who experience significant competition from generics or other brands use these programs to encourage patients to choose their brand-name drug. Copay assistance programs are typically limited to patients with private insurance, although some also include cash-paying patients.

The range of discounts per prescription fill varies. The maximum total dollar amount that the manufacturer will contribute on behalf of each patient throughout the timeframe of the copay program, referred to as the maximum annual value, also varies. For example, the maximum annual value could range from a few hundred dollars up to $60,000 for expensive drugs that treat serious diseases.

Drug Administration and Lab Cost Programs: Some manufacturers offer programs to assist patients with administration costs for drugs administered by a healthcare professional. Other programs cover the cost of specific laboratory tests required for the administration of certain drugs.

Patient Assistance Programs: Patient assistance programs provide access to drugs for patients who cannot afford their medication. Generally, the drugs are provided at no cost to the patient. These programs commonly target uninsured and privately insured patients, although sometimes patients with Medicare are also included. Patients with Medicaid typically are not eligible for patient assistance programs.

Financial need must be demonstrated to qualify for patient assistance programs, with requirements varying by manufacturer. The requirements are typically based on household income levels compared to the federal poverty limit. Although most other programs discussed previously have expiration dates, patient assistance programs are often continued year to year, although sometimes qualification requirements, such as income level, may change.

In exchange for providing free medication, manufacturers receive tax breaks for their donations. Most programs are operated by drug manufacturers, but some programs are owned and managed by independent nonprofit foundations, like the HealthWell Foundation or the Patient Access Network Foundation.

Accumulator and Maximizer Programs: In response to manufacturers' copay assistance programs that lower patient out-of-pocket cost for expensive drugs, payers have implemented copay accumulator and maximizer programs.

Accumulator and maximizer programs prevent copay assistance funds from being counted toward meeting patients’ yearly deductibles and maximum out-of-pocket limits.

These programs are common, and their use has increased over the past few years. According to an analysis conducted by Drug Channels Institute, in 2023, about half of patients with commercial insurance were in plans that had implemented accumulators and maximizers. An increase since 2018 when 28% and 6% of patients with commercial insurance were in plans that had implemented accumulators and maximizers, respectively.

Copay assistance programs bypass many payers’ cost-control strategies. For example, copay assistance can circumvent plan sponsors' formulary tiering and utilization management strategies, negating the impact of higher cost sharing. This results in patients having no financial incentive to utilize a lower-cost preferred therapy, instead opting for a more expensive brand-name drug, thereby reducing the payer’s profitability.

Payers use maximizer and accumulator programs to level the playing field by allowing payers to recoup some of the dollars lost to higher drug spend on branded and non-preferred drugs.

How Copay Accumulator and Maximizer Programs Work

Accumulator Programs

Accumulator programs started to gain popularity among payers about 7–8 years ago in response to copay assistance programs offered by manufacturers.

Under the terms of an accumulator program, only the patient's contribution counts toward their deductible and out-of-pocket maximum totals, while the dollars contributed by the drug manufacturer are excluded from these calculations.

For example, with an accumulator program, if the patient out-of-pocket cost for a drug is  $100 through insurance, and the manufacturer reduces the amount by $75 through a coupon, this $75 does not apply to the patient’s deductible. Only the $25 paid by the member will count. The result is that the patient progresses through the deductible phase more slowly, delaying the time until the payer must start covering a higher share of the drug cost.

The same scenario applies to the patient's out-of-pocket maximum. Contributions from the manufacturer are not applied to the maximum out-of-pocket limit, so members also reach that limit more slowly. The payer benefits from the delay in having to pick up the full cost of the drug, while manufacturers bear a greater share of the cost for a longer period.

One major drawback for patients under accumulator programs is that when the maximum annual value of the manufacturer copay assistance program is reached, the patient suddenly, and usually unexpectedly, becomes responsible for a larger amount of the cost of the medication since their deductible and out-of-pocket maximum may not have been satisfied. This often leads to patient confusion and frustration and may lead some patients to stop taking their medication if they cannot afford the higher copay.

Maximizer Programs

Payers began adopting maximizer programs shortly after accumulator programs came into the picture. Maximizer programs are similar to accumulator programs in that the cost of the medication covered by the manufacturer copay assistance program does not count toward the yearly deductible and maximum out-of-pocket expenses. The difference is that with maximizers, the payer takes the maximum annual value of the copay assistance program and splits it evenly over 12 months to determine the patient’s copay. The payer benefits by extracting the full amount that the manufacturer is willing to contribute through the program. For the patient, this means that the cost of the drug remains consistent all year long. Maximizer programs are more patient-friendly because they avoid the sudden increase in patient costs that can occur midway through the year with accumulator programs.

Federal and State Legislation

To navigate the current landscape with payers and manufacturers seemingly in dispute over financial assistance programs, particularly over copay assistance programs, some initial steps have been taken at the federal level and several states have also stepped in with legislation.

A federal bill was proposed in the House of Representatives in February 2023—the Help Ensure Lower Patient Copays Act or the HELP Copays Act (H.R. 830)—which aims to require health insurance plans to apply certain payments made by, or on behalf of, a plan enrollee toward the enrollee's cost-sharing requirements. Specifically, this would require plans to apply third-party payments, financial assistance, discounts, product vouchers, and other reductions in out-of-pocket expenses toward the patients’ cost-sharing requirements. If passed, this would mean that manufacturer copay assistance would count toward patients’ deductibles and out-of-pocket maximums.

At the state level, 21 states plus the District of Columbia have enacted legislation restricting the use of copay accumulator and maximizer programs as of September 2024. Some states, like Arkansas and North Carolina, have statues prohibiting these programs for drugs that do not have a generic equivalent. Other states, like Connecticut and Virginia, have statutes prohibiting these programs altogether. Additionally, several states without laws addressing accumulator and maximizer programs have introduced legislation to restrict their use.

These state laws apply to certain types of plans, such as individual and small group ACA marketplace plans and fully-insured employer-sponsored plans. However, self-insured (also known as self-funded) employer plans are generally not regulated by state law, so state-level accumulator and maximizer laws do not apply. Introducing legislation to limit the use of these programs at the state level can have several consequences, including allowing patients using copay assistance to bypass formulary, and those using copay incentives to use lower-cost products. Moreover, state-by-state legislation has created geographical inconsistencies, potentially contributing to worsening healthcare disparities.

Conclusion

While patient financial assistance programs provide significant benefits to patients, they also bring about complex interactions between manufacturers, payers, and regulatory bodies. Understanding the nuances of these programs, from copay assistance to the emerging strategies of payers, is vital for all stakeholders involved in healthcare. As the landscape continues to evolve, ongoing legislative efforts and industry responses will shape the future of patient access and affordability.

Patient Financial Assistance Program Coverage

IPD provides in-depth Patient Financial Assistance Program information within our Access Hub platform.

With the platform, subscribers can keep track of what patient financial assistance programs are being offered by which manufacturer, including copay savings cards, patient assistance programs, free trials, bridge programs, and more.

In addition, IPD tracks inclusions and exclusions for each program, as well as the associated maximum annualized value for copay assistance programs. It's an easy and quick way to understand how patients can reduce out-of-pocket costs, with up-to-date detailed program information across disease states, therapeutic areas, company portfolios, and drugs. Further, this information can be used to compare various programs and pinpoint benefit design opportunities and pitfalls based on program availability. Learn more: https://www.ipdanalytics.com/access-hub