As Copay Coupons Rise, Payers Should Eye Drugmakers’ Efforts to Enrich Offsets (with Table: Co-Pay Offset Program Trended Script Utilization for MS Products)

Reprinted from DRUG BENEFIT NEWS, biweekly news and proven cost management strategies for health plans, PBMs, pharma companies and employers. By Lauren Flynn Kelly, Editor March 21, 2014 Volume 15 Issue 6 As health plans and PBMs consider how to address manufacturer-offered copay cards and other discounts on brand-name drugs — whether by encouraging their use among members, blocking the coupons or taking a more targeted approach — payers should keep a close watch on pharmaceutical manufacturers’ attempts to refine these programs to match competitors and gain market share. Keeping abreast of changes in specialty categories like multiple sclerosis (MS) and rheumatoid arthritis (RA), which are rich with therapeutic options, may be especially important as those categories experience high copay offset utilization, suggests Zitter Health Insights’ latest Co-Pay Offset Monitor. In the new industry report, the research firm observed 561 copay offset programs being offered for 708 brand-name drugs as of winter 2014, compared with 531 programs for 650 brands in summer 2013. Of those 708 brand-name drugs with copay offset programs, 20% are for branded biologic drugs, and of those biologics, 60% are focused on chronic diseases, reports Zitter. A copay offset program can be applied to more than one brand, and vice versa, points out the firm. Zitter conducted the research from July through December 2013. A copay offset program refers to a manufacturer-sponsored copay program for branded pharmaceutical products directed at the commercially insured population, clarifies the research firm. This is separate from a patient assistance program (PAP), which is a manufacturer-sponsored copay assistance nonprofit foundation or program to help uninsured patients (or those denied coverage by their commercial plans) who meet specific financial eligibility criteria, or a foundational assistance program, which is an independent nonprofit foundation or program to help underinsured patients who meet specific financial eligibility requirements. Within those 30 additional programs identified in the second half of 2013, Zitter analyst Sneha Shah suggests that there may have been a shift of multiple brands in single copay programs splitting into multiple programs, or new programs accompanying the introduction of new drugs. “What was really notable was when a specialty drug was introduced to the market, then it usually was paired with a copay program,” Shah tells DBN. She adds that she wouldn’t be surprised to see that 20% portion of branded biologics grow as more specialty drugs are introduced. “Cost sharing is not going to go away, especially as specialty medications are becoming the future,” she remarks. “These medications are expensive and tools like copay offset programs and other assistance programs are going to increase. So if specialty medications are becoming the future, then there has to be an integrated approach to tackle this problem, where patients can actually access those medications and in that case copay offset and [other discount] programs would work.” The company identified RA as the category with the highest copay offset program utilization, followed by psoriasis and MS. These findings are consistent with a recent internal analysis performed by Prime Therapeutics LLC that showed high copay coupon/PAP use among autoimmune and MS patients (DBN 2/21/14, p. 1). “A lot of these programs have zero-dollar copays or patients pay only $5 or $10,” observes Shah. “They are quite rich in benefits, so I am not surprised that utilization is so high.” Of a study sample representing 25% of national specialty pharmacy claims, roughly 55% of the 678,346 eligible RA prescriptions processed during the third quarter of 2013 were associated with a copay offset program. Meanwhile, 27.8% of the 342,541 MS prescriptions were supported by a copay offset program in the same quarter. Within the MS category, however, utilization varied wildly over a year and a half (see chart, p. 3). For example, both Copaxone (glatiramer acetate) and Aubagio (teriflunomide) experienced a “sharp nosedive” but eventually “normalized,” says Shah. Drug Companies Tweak Copay Programs What accounts for such drastic swings in utilization? Shah explains that in the first quarter of 2012, Copaxone maker Teva Pharmaceuticals Industries Ltd. had dramatically increased prices and the drug was removed from most formularies. Teva swiftly recovered by enhancing access to the medication by increasing the annual maximum copay offset from $6,000 to $12,000, she says. Meanwhile, when Genzyme Corp.’s oral agent Aubagio was introduced in the fourth quarter of 2012, it came with a three-month free trial and $35 copays after that. When utilization dipped in the following quarter, the drugmaker also enhanced its copay offset program so that patients would pay only $10. Shah points out that most of these offers have expiration dates, and the drugmaker has the freedom to change the terms of the offer at any time. Moreover, the firm observed that debit cards account for about 11% of biologics copay offset programs, where none exist for traditional drugs. Shah suggests that’s because the benefits offered by copay offset programs for specialty drugs tend to be “richer” than for traditional therapies. Other forms of copay offset offered by specialty pharmaceutical manufacturers include coupons/cards (68%), reimbursement accounts (16%) and the less frequently used mobile coupon, buy-and-bill and direct programs. In fact, only one program observed by Zitter offered a mobile coupon in combination with a copay card, whereas those discounts are more frequently seen in the small molecule realm (3% of 446 programs), adds Shah. Co-Pay Offset Program Trended Script Utilization for Multiple Sclerosis Products Through Specialty Pharmacy Provider (Program Scripts/Eligible Scripts With a Co-Pay) SOURCE: Zitter Health Insights’ Co-Pay Offset Monitor, Winter 2014. http://aishealth.com/archive/ndbn032114-02?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=36497129