HIV Long-Acting Injectables Face Policy Hurdles After CROI 2025

Amid the political turmoil and public health uncertainties of 2025, a remarkable scientific success story continues to unfold. The Conference on Retroviruses and Opportunistic Infections (CROI 2025) showcased significant advancements in HIV long-acting injectables for prevention and treatment—with new formulations requiring as few as one intervention per year. These latest innovations build on the promise of existing long-acting therapies while dramatically extending their duration and effectiveness.

These advancements represent more than scientific achievements; they're testaments to the HIV community's persistent demand for better options. After decades of daily pills, these innovations offer liberation from medication schedules, reduced visibility for those who face stigma, and new hope for those who struggle with adherence. The HIV community has always adapted and persevered, and these breakthroughs are the latest chapter in that ongoing story of resilience.

Yet, as we celebrate these scientific milestones, we face a familiar challenge: ensuring innovations translate into accessible care for all who need it. While researchers present promising data in conference halls, Republican-led attempts to slash Medicaid funding and legal challenges to preventive care coverage threaten to limit who benefits from these breakthroughs. It's a jarring disconnect between scientific progress and political reality that the HIV community knows all too well.

Still, if history has taught us anything, it's that the HIV community has never backed down from a fight for access. So we'll toast to the science, roll up our sleeves, and get to work on the policy—because breakthrough treatments mean little if they're out of reach for those who need them most.

Scientific Breakthroughs in HIV Prevention

The most notable announcement from CROI 2025 was Gilead's presentation of first clinical data for once-yearly lenacapavir formulations for HIV prevention. The Phase 1 study data showed that both intramuscular formulations maintained plasma concentrations well above protective thresholds for a full year, with median trough concentrations at Week 52 significantly higher than those observed with twice-yearly lenacapavir at Week 26.

This represents a substantial advance beyond current options like daily oral PrEP and bimonthly injectable cabotegravir, potentially reducing interventions to just once annually. The PURPOSE trials have already demonstrated the impressive efficacy of lenacapavir, with PURPOSE 1 showing 100% protection in women in South Africa and Uganda, and PURPOSE 2 finding a 96% lower acquisition rate compared to background incidence across diverse populations.

Advancements in Long-Acting HIV Treatment

Treatment options for people living with HIV are seeing similar progress. The combination of lenacapavir with broadly neutralizing antibodies (bNAbs) teropavimab and zinlirvimab maintained viral suppression in 96% of participants at Week 26, comparable to daily oral treatment. This regimen, which gained FDA Breakthrough Therapy Designation in January 2025, could offer a complete twice-yearly treatment option.

ViiV Healthcare's EMBRACE study of N6LS, administered every four months with monthly cabotegravir, showed similarly high rates of viral suppression. A UCSF study further confirmed the value of long-acting injectables, with 98% viral suppression after 48 weeks among patients who previously struggled with oral medication.

Diverse Patient Preferences

Research confirms that preferences for HIV treatment vary significantly. A recent study identified three distinct preference groups: those preferring implants (29%), those preferring long-acting oral or injectable options (35%), and those preferring daily or long-acting oral treatments (36%). These preferences correlated with factors like age, education, injection aversion, and adherence to current therapy.

This heterogeneity underscores that "the failure of current daily oral ART to achieve viral suppression for all people living with HIV has shown that there is no one-size-fits-all in HIV care." Offering a range of options will be essential to address diverse needs and preferences, potentially improving both adherence and outcomes.

Access Barriers and Coverage Challenges

Despite the promising scientific advances in long-acting treatment and prevention therapies, significant structural barriers threaten to limit their reach to the communities that need them most. The complex distribution and administration requirements for these medications create unique challenges not seen with oral HIV medications.

According to data from NASTAD, the Wholesale Acquisition Cost (WAC) for Apretude (cabotegravir for PrEP) is $3,700 per dosing kit, translating to approximately $22,200 annually for maintenance doses, or about $25,900 for the first year with initiation doses. This cost, while lower than the $40,000 often cited for Cabenuva (the treatment version), remains substantially higher than generic oral PrEP. Unlike oral medications, these injectable options also require additional costs for clinic visits and administration fees, further complicating access.

For people relying on AIDS Drug Assistance Programs (ADAPs), coverage remains inconsistent. According to the International Association of Providers of AIDS Care (IAPAC), six states (Missouri, Kentucky, Louisiana, Oklahoma, Texas, and South Dakota) and some U.S. territories do not cover injectable HIV medications through their ADAP programs. Even in states that do provide coverage, the distribution system for these medications differs significantly from oral medications. As NASTAD explains, long-acting injectables are distributed through "buy-and-bill," "white bagging," or "clear bagging" mechanisms involving specialty distributors or pharmacies rather than traditional retail pharmacies, creating additional logistical barriers.

While the Biden Administration issued updated guidance in October 2024 requiring health insurers to cover all three FDA-approved forms of PrEP without cost-sharing, this mandate faces legal challenges. The Supreme Court has agreed to hear a lawsuit challenging the Affordable Care Act's preventive services provision, with arguments commencing in spring 2025 and a decision expected by July. This case could potentially eliminate the requirement for insurance plans to cover preventive services like PrEP without cost-sharing.

These access challenges disproportionately affect those at highest risk for HIV. Despite the recommendations for PrEP that now include newer formulations, PrEP uptake remains unequal. The Centers for Disease Control and Prevention (CDC) has estimated that the proportion of persons with indications for PrEP who received it was 60.5% among White persons vs 7.9% in Black persons and 13.8% in Hispanic/Latino persons. Without policy intervention to address these barriers, the remarkable scientific progress in HIV prevention and treatment risks benefiting only those with privileged access to healthcare while leaving behind the communities with the greatest need.

Political Context and Threats to Progress

The current political landscape presents additional challenges to expanding access to long-acting injectables for HIV treatment and prevention. The Republican-led Congress is considering plans to cut Medicaid by potentially $880 billion or more to help pay for tax cuts, according to a Kaiser Family Foundation report. Such reductions would likely impact access to these innovative but costly treatments.

At the international level, the Trump administration's pause on PEPFAR-funded prevention services threatens to reverse progress in global HIV prevention efforts. As Jirair Ratevosian writes in his CROI analysis, "The Trump administration now faces a choice: either let PEPFAR's legacy crumble or seize this opportunity to lead the next phase of HIV prevention."

It's worth noting that Medicaid enrollees across the political spectrum express concerns about potential program cuts. KFF focus groups found that "both Trump and Harris voters valued their Medicaid coverage and the access to health care services, mental health services, and medications for themselves and their children it provides." Participants described losing Medicaid as potentially "devastating" and likely to lead to serious consequences for their physical and mental health.

Bridging the Gap

To ensure equitable access to these breakthrough HIV prevention and treatment options, several policy approaches should be considered:

1. Strengthen CMS Guidance on Long-Acting Injectables: The Centers for Medicare & Medicaid Services should update its informational bulletins on HIV prevention and care delivery to reflect the latest advancements in longer-acting therapies and issue specific policy guidance on Medicaid's role in supporting PrEP uptake and persistence.

2. Defend Preventive Service Coverage: Advocacy efforts should focus on defending the ACA's preventive services mandate as the Supreme Court considers challenges to this provision.

3. Expand ADAP Coverage: State ADAP programs that do not currently cover long-acting injectables should be encouraged to add these medications to their formularies, potentially with additional federal support to offset costs.

4. Engage in Value Assessment: Payers, including Medicaid and Medicare, should evaluate the long-term clinical and economic benefits of these options, including reduced transmission, improved quality of life, and potentially fewer hospitalizations due to better adherence.

Conclusion

The scientific advancements presented at CROI 2025 offer unprecedented opportunities to transform HIV prevention and treatment. Once-yearly prevention therapies and twice-yearly treatment regimens could dramatically improve adherence, reduce transmission, and enhance quality of life for millions of people living with or at risk for HIV.

However, without concerted policy action to address access barriers, these innovations risk becoming available only to those with privileged access to healthcare, potentially widening rather than narrowing health disparities. As long-acting HIV therapies move closer to widespread availability, advocates, policymakers, healthcare providers, and industry partners must work together to ensure that these scientific breakthroughs translate into public health impact for all communities affected by HIV.

The gap between what's scientifically possible and what's accessible represents both a policy failure and a moral challenge. Bridging this gap requires political will, innovative financing approaches, and a commitment to health equity that matches the remarkable scientific progress we've witnessed.

Patients Still at Risk: The State of Copay Accumulator Adjustment Policies in 2025

For people living with chronic and serious conditions like HIV, viral hepatitis, or cancer, specialty medications are often the only option for managing their health. However, the high cost of these medications—even for those with insurance—has prompted many to seek assistance from third-party programs to cover copayments and coinsurance. These lifelines are being threatened by health insurance company practices known as "copay accumulator adjustment policies" (CAAPs).

A newly released report from The AIDS Institute (TAI) reveals that more than 40% of individual health plans reviewed for 2025 include CAAPs, which prevent assistance funds from counting toward enrollees' annual deductibles or out-of-pocket maximums. This practice forces patients to pay twice for the same medication—once through the assistance program and again out of pocket—creating substantial financial barriers to necessary treatments.

"Copay accumulator adjustment policies discriminate against people living with chronic illness, interrupting their access to needed treatment and threatening their health," notes Rachel Klein, Deputy Executive Director of The AIDS Institute in their 2025 press release.

The 2025 TAI National Copay Report: A State-by-State Analysis

The AIDS Institute's comprehensive analysis reveals a troubling picture of copay accumulator policies across the United States. Their review of individual market health plans in all 50 states and D.C. found that in 39 states, at least one insurer maintains a CAAP, with vast differences in prevalence from state to state.

The report grades states based on the percentage of plans implementing these policies. Ten states received failing "F" grades, indicating that 75-100% of their available plans include CAAPs: Florida, Idaho, Iowa, Missouri, Montana, Pennsylvania, South Carolina, Utah, Wisconsin, and Wyoming. At the other end of the spectrum, 11 states, Washington D.C., and Puerto Rico received "A" grades for having zero plans with CAAPs, ensuring patients receive the full benefit of copay assistance.

Perhaps most concerning is the finding that in 11 states (Colorado, Delaware, Georgia, Illinois, Louisiana, North Carolina, Oklahoma, Oregon, Tennessee, Texas, and Washington), at least one insurer continues to include CAAPs "in apparent violation of state law," according to the TAI report. This suggests a significant enforcement gap, with state insurance departments failing to ensure compliance with existing patient protections.

The report also highlights how difficult it is for patients to determine whether their plan includes these policies. Across all states, 18 plans failed to provide policy documents online during open enrollment, forcing prospective enrollees to make lengthy phone calls to learn about copay policies. Unsurprisingly, 13 of these 18 plans that required phone calls have copay accumulator policies.

The Human Impact of Copay Accumulator Policies

Behind the statistics are real people facing impossible choices due to these policies. According to the TAI report, the annual out-of-pocket maximum in 2025 is $9,200 for individuals and $18,400 for families—amounts that exceed what most Americans have in savings. Research cited in the report found that when out-of-pocket costs reach just $75-$125, over 40% of patients leave their prescriptions at the pharmacy counter. When costs hit $250, more than 70% of patients walk away without their medications.

To understand how CAAPs affect patients financially, consider this example of two scenarios for a patient taking a medication costing $1,680 monthly with an annual copay assistance limit of $7,200:

Without a CAAP, the patient's assistance helps meet their deductible and cover coinsurance until July, when assistance runs out. The patient then pays $1,350 out-of-pocket to reach their annual maximum, and the insurer collects $8,550 total.

With a CAAP, the same amount of assistance is used up by June, but none of it counts toward the patient's deductible or out-of-pocket maximum. The patient must then pay $7,960 out-of-pocket—nearly six times more—while the insurer collects $15,160 total, almost double what they would collect without the CAAP.

"These policies undermine important patient protections enacted in the Affordable Care Act (ACA) and make it more difficult for people trying to manage a chronic illness to afford medicine they need," the report states.

Federal Regulation and Legal Battles

The federal regulatory landscape governing copay accumulator policies has been marked by contradiction and uncertainty. In 2019, the Department of Health and Human Services (HHS) finalized the 2020 Notice of Benefit and Payment Parameters (NBPP), which significantly restricted the use of copay accumulator adjustment policies, only permitting them for brand-name drugs with available and medically appropriate generic equivalents.

However, before this patient-friendly rule could take effect, HHS announced it would not implement the provision. In 2020, the agency reversed course entirely with the 2021 NBPP, which allowed insurers and PBMs to adopt CAAPs for all prescription drugs regardless of whether generics were available, as long as state law permitted such practices.

This regulatory whiplash prompted legal action from patient advocates. According to the TAI report, a U.S. District Court for the District of Columbia ruled in late 2023 that HHS could not allow insurers and PBMs to decide whether manufacturer copay assistance must count toward an enrollee's cost-sharing limit. The court declared that insurers must follow the more protective 2020 rule until HHS issues new regulations.

Despite this ruling, HHS has so far declined to enforce the 2020 rule, instead announcing plans to update the cost-sharing rule with new language. This enforcement gap means many insurance plans continue to include CAAPs in 2025, leaving patients exposed to potential financial harm.

State-Level Progress and Challenges

While federal action stalls, states have become the primary battleground for protecting patients from copay accumulator policies. To date, 21 states, the District of Columbia, and Puerto Rico have enacted laws restricting the use of CAAPs.

Nine states and Puerto Rico have adopted comprehensive protections requiring insurers to count all copay assistance toward patients' deductibles and out-of-pocket limits: Connecticut, Delaware, Illinois, Louisiana, New Mexico, New York, Oklahoma, Virginia, and West Virginia. Twelve more states and DC have enacted laws that prohibit CAAPs for drugs without generic alternatives while allowing insurers to exclude assistance for brand-name drugs when generics are available.

Despite this progress, implementation challenges remain significant. The TAI report found that in 11 states with existing laws, at least one insurer continues to include CAAP language in apparent violation of state law. This finding underscores that "laws and regulations are meaningless unless properly enforced."

State efforts to regulate CAAPs are part of a broader trend of PBM reform at the state level. During the 2024 legislative sessions alone, 33 bills related to PBM regulation were enacted in 20 states, addressing issues from spread pricing to patient steering.

A critical limitation is that state laws only apply to health insurance plans regulated at the state level—typically individual and small group plans. This leaves a protection gap for the majority of Americans who receive coverage through large employer plans, which are regulated at the federal level. According to the TAI report, the current state laws only protect an estimated 26 million people, representing just 19% of those enrolled in commercial health insurance plans nationwide.

Congressional Action and Setbacks

Despite broad bipartisan support for addressing PBM practices including copay accumulators, federal legislative efforts have repeatedly fallen short. The Help Ensure Lower Patient (HELP) Copays Act, which would require insurers and PBMs to count copay assistance toward patients' annual cost-sharing requirements, garnered more than 150 cosponsors in the previous Congress but never came to a vote.

The most recent setback came in December 2024, when PBM reform provisions were stripped from a bipartisan Continuing Resolution that would have funded the government. According to Chain Drug Review, the measure collapsed after President-elect Trump and his allies expressed concerns about the scope of the bill, leading to a stripped-down version that excluded most extraneous provisions, including PBM reform.

In February 2025, Senators Chuck Grassley and Maria Cantwell reintroduced two bipartisan bills aimed at increasing PBM transparency and accountability. While neither bill directly addresses copay accumulator policies, they signal ongoing bipartisan interest in PBM reform.

The New Administration's Position and FTC Scrutiny

The Trump administration has signaled that PBM reform will be a priority. At a December 2024 press conference, Trump stated: "We are going to knock out the middleman." Health and Human Services Secretary Robert F. Kennedy Jr. echoed this during his confirmation hearing: "Trump is absolutely committed to fixing the PBMs. Trump wants to get the excess profits away from the PBMs and send it back to primary care, to patients in this country."

This political momentum builds on the Federal Trade Commission's ongoing investigation of PBM practices. As we covered in a previous CANN blog post, the FTC's January 2025 report provided substantial evidence of PBMs marking up specialty drugs—including HIV medications—by hundreds or thousands of percent, generating billions in excess revenue. The report's unanimous approval by all five FTC commissioners adds significant weight to arguments for comprehensive reform.

Next Steps

The 2025 TAI National Copay Report confirms that despite progress in some states, copay accumulator adjustment policies continue to threaten access to essential medications for people living with chronic conditions. The patchwork of state laws, inconsistent enforcement, and limitations of existing federal regulations leave millions of Americans vulnerable to financial harm when seeking necessary treatment.

Several actions are needed to address this ongoing challenge:

For policymakers:

• Congress should pass comprehensive federal legislation like the HELP Copays Act to ensure all patients, including those with employer-sponsored insurance, are protected from copay accumulator policies.

• State insurance commissioners must prioritize enforcement of existing laws that restrict CAAPs, closing the implementation gap identified in the TAI report.

For patient advocates:

• Focus advocacy efforts on states with "F" grades in the TAI report, where the greatest number of patients are at risk.

• Document and report instances where insurers violate state laws restricting CAAPs to appropriate regulatory authorities.

• Build coalitions that include both patient groups and pharmacy advocates to strengthen the case for reform.

For patients:

• Check whether your state has laws protecting against CAAPs and understand how your specific insurance plan handles copay assistance.

• When selecting insurance plans, directly ask customer service representatives about copay accumulator policies if this information is not clearly stated in plan documents.

• If denied the ability to count assistance toward your deductible, appeal the decision and report potential violations to your state insurance department.

As Congress continues to flirt with PBM reform, the FTC intensifies its scrutiny, and the new administration signals interest in "knocking out the middleman," a rare window of opportunity exists to finally address these harmful policies. The key will be translating bipartisan rhetoric and mounting evidence into concrete action that protects all patients, regardless of where they live or how they receive their health insurance. Without such action, millions of people living with chronic conditions will continue to face financial barriers to the medications they need to survive and thrive.

FTC Exposes PBM Price Gouging of Specialty Generic Drugs

The Federal Trade Commission's (FTC) second interim staff report confirms what patient advocates have long suspected: the three largest pharmacy benefit managers (PBM)—CVS Caremark, Express Scripts, and OptumRx—are systematically price-gouging specialty generic drugs, putting profits over patient access to life-saving medications. The report documents how these PBMs abuse their market power to generate billions in excess revenue at the expense of people who rely on these medications to survive.

This comprehensive analysis examines 51 specialty generic drugs—a significant expansion from the two drugs analyzed in the FTC's July 2024 report. The findings are damning: PBM-affiliated pharmacies extracted over $7.3 billion in revenue above estimated acquisition costs for these medications between 2017-2022, with this excess revenue growing at a staggering 42% annual rate. This is not market efficiency—it's profiteering.

The report's unanimous approval by FTC commissioners, including incoming Chair Andrew Ferguson, reflects the undeniable nature of these abusive practices. The evidence shows PBMs are deliberately inflating costs for medications that treat HIV, cancer, multiple sclerosis, and other serious conditions, creating unnecessary barriers to care while padding their own profits. For those of us fighting to protect access to care, this report provides irrefutable evidence that PBM reform cannot wait. The breadth and depth of documented abuses demand immediate action to stop practices that threaten both patient health outcomes and public health goals.

Key Findings: Systematic Price Gouging and Patient Steering

The FTC's analysis exposes a deliberate pattern of excessive markups on specialty generic medications that would be illegal in most other industries. A staggering 63% of specialty generic drugs dispensed by PBM-affiliated pharmacies for commercial health plan members were marked up more than 100% over acquisition costs between 2020 and 2022. Even more egregious, PBMs marked up 22% of these medications by more than 1,000%—an indefensible practice when dealing with life-saving medications.

These markups weren't random—they targeted critical medications across multiple therapeutic categories where patients have few alternatives:

• Cancer treatments: $3.3 billion in excess revenue (44% of total)

• Multiple sclerosis medications: $1.8 billion (25%)

• Transplant medications: $824 million (11%)

• HIV medications: $521 million (8%)

• Pulmonary hypertension treatments: $432 million (7%)

The investigation also uncovered clear evidence of patient steering. While PBM-affiliated pharmacies filled 44% of commercial specialty generic prescriptions overall during 2020-2022, they commandeered 72% of prescriptions for drugs marked up more than $1,000 per prescription. This disparity reveals how PBMs systematically funnel high-profit prescriptions to their own pharmacies.

Beyond these markup practices, PBMs extracted an additional $1.4 billion through spread pricing—billing plan sponsors more than they reimburse pharmacies for medications. Most of this spread pricing revenue (97%) came from commercial prescriptions filled at unaffiliated pharmacies—a clear demonstration of how PBMs exploit their market position to profit from competing pharmacies while simultaneously steering patients to their own dispensing operations. This dual strategy of profiting from independent pharmacies while actively working to put them out of business reveals the anti-competitive impact of vertical integration in the pharmacy sector.

These practices have become central to PBM business models. Operating income from PBM-affiliated pharmacy dispensing of these specialty generic drugs accounted for 12% of their parent healthcare conglomerates' relevant business segment operating income in 2021, up from less than 8% just two years earlier. The top 10 specialty generic drugs alone represented nearly 11% of this operating income.

This isn't a case of a few isolated pricing anomalies. The FTC's analysis reveals a systematic campaign to extract maximum profit from medications people need to survive. These practices have become a major profit center for vertically integrated PBMs, deliberately trading patient access for corporate profits.

The Human Cost: Exploiting HIV Care Access

The FTC's findings expose how PBMs are actively undermining decades of progress in HIV care and prevention. PBMs extracted $521 million in excess revenue from HIV medications alone—representing 8% of total excess revenue despite these drugs comprising a smaller portion of prescriptions. This targeted exploitation of HIV medications reveals a calculated strategy to profit from a vulnerable population.

The FTC report documents troubling markup patterns affecting every level of HIV treatment. Take lamivudine (generic Epivir) as an example - PBM-affiliated pharmacies marked up this essential medication by 168-197% compared to acquisition costs. This level of markup isn't unique to lamivudine but represents a systematic practice affecting the full spectrum of HIV medications, from single-drug therapies to combination treatments. For people living with HIV who often require multiple medications as part of their treatment regimen, these markups create compounding barriers to care access.

Beyond the pricing abuse, PBM steering practices actively disrupt HIV care by forcing people living with HIV away from specialized pharmacies that understand their needs. These community pharmacies provide essential services that PBM-owned pharmacies often fail to match:

• Experienced HIV medication counseling

• Critical adherence support

• Care coordination with HIV specialists

• Navigation of assistance programs

• Culturally competent care

For Medicare Part D beneficiaries living with HIV, the situation is particularly egregious. Despite "any willing pharmacy" protections meant to preserve patient choice, PBMs use discriminatory reimbursement practices to force independent pharmacies to either accept unsustainable payment rates or abandon their patients. This deliberately undermines pharmacies serving communities most impacted by HIV.

PrEP Profiteering

The FTC report reveals perhaps the most cynical PBM practice yet: marking up generic PrEP by over 1,000% above acquisition costs. This price gouging of HIV prevention medication directly sabotages public health efforts to end the HIV epidemic. In an era when expanding PrEP access is critical to preventing HIV transmission, PBMs are creating artificial barriers to a medication that should be becoming more affordable through generic availability.

While the Affordable Care Act requires most private insurance plans to cover PrEP without cost-sharing (for now), PBM markup practices drive up overall healthcare costs through inflated plan sponsor payments. This leads to higher premiums that can make insurance itself unaffordable for many people who need PrEP coverage.

The forced migration to PBM-owned pharmacies compounds the damage by separating people from community pharmacies that have developed comprehensive PrEP care programs. These specialized pharmacies don't just dispense medication - they provide an integrated set of essential services including regular HIV testing, STI screening coordination, adherence support and counseling, benefits navigation, and ongoing coordination with healthcare providers. PBM-owned pharmacies typically lack these specialized services, creating gaps in PrEP care that can affect both initiation and adherence. By disrupting these established care relationships, PBM steering practices threaten the comprehensive support system that helps keep people engaged in PrEP care. The FTC's findings prove that PBM practices are actively working against HIV prevention goals by creating unnecessary barriers to PrEP access and fragmenting PrEP care delivery.

Political Landscape: Reform Momentum Meets Industry Resistance

The unanimous FTC commissioner support for the second interim report, including incoming FTC Chair Andrew Ferguson's concurring statement, reflects the undeniable nature of PBM abuses. President Trump's rhetoric about "knocking out the middleman" suggests potential executive branch support for reform, but previous promises of action on drug pricing require skeptical assessment.

The December 2024 failure of comprehensive PBM reform legislation reveals the industry's continued influence over the legislative process. Despite bipartisan support, PBMs and their allies successfully stripped crucial reforms from the federal funding bill that would have:

• Required pass-through of all rebates to Medicare sponsors and group health plans

• Prohibited excessive billing of Medicaid programs

• Mandated transparency in drug spending practices

• Protected patient choice in pharmacy selection

Current legislative proposals like the PBM Act, introduced by Senators Warren and Hawley, target the fundamental problem of vertical integration by prohibiting joint ownership of PBMs and pharmacies. This structural approach directly addresses the conflicts of interest documented in the FTC report.

While narrow Republican majorities in Congress create opportunities for bipartisan action, the PBM industry's demonstrated ability to derail reform efforts demands sustained advocacy pressure. The challenge isn't finding solutions—it's overcoming industry resistance to implementing them.

State-Level Response: Why Price Controls Miss the Mark

The FTC's detailed analysis of PBM practices provides compelling evidence for why Prescription Drug Affordability Boards (PDABs) are fundamentally misaligned with addressing drug affordability issues. The report documents that PBM-affiliated pharmacies generated over $7.3 billion in revenue above estimated acquisition costs on specialty generic drugs—a problem that stems from markup practices and vertical integration rather than base drug prices.

Take, for example, the pulmonary hypertension drug tadalafil (generic Adcirca). The FTC found that in 2022, while pharmacies purchased the drug at an average cost of $27, PBMs marked it up by $2,079, resulting in a reimbursement rate of $2,106 for a 30-day supply—a markup exceeding 7,700%. A PDAB focusing on upper payment limits would fail to address these markup practices or the steering mechanisms that drive prescriptions to PBM-affiliated pharmacies where such markups occur.

Similarly, the report's findings on multiple sclerosis medications illustrate the inadequacy of the PDAB approach. For dimethyl fumarate (generic Tecfidera), PBMs marked up the drug by $3,753 over its $177 acquisition cost—a 2,100% increase. This markup occurred through PBM practices that PDABs have no authority to regulate or control.

The FTC's analysis of spread pricing further undermines the PDAB model. PBMs generated approximately $1.4 billion through spread pricing on these specialty generic drugs, with 97% coming from commercial claims. PDABs, focused on manufacturer prices rather than PBM practices, would do nothing to address this significant source of cost inflation.

Moreover, PDABs could exacerbate existing market distortions. The report documents that PBM-affiliated pharmacies already handle 72% of prescriptions for drugs marked up more than $1,000 per prescription, despite filling only 44% of commercial specialty generic prescriptions overall. Adding PDAB-imposed price controls could result in pharmacy under-reimbursement. This would be financially detrimental, disproportionately so for independent pharmacies, resulting in pharmacy closures. Pharmacy closures would only increase the market concentration of PBM-affiliated pharmacies. Additionally, a PDAB-imposed Upper Payment Limit (UPL) could lead a PBM to enforce utilization management policies which would increase practitioners' administrative burden.

The evidence demands solutions that directly address PBM pricing practices, vertical integration, and market consolidation—not ineffective state-level price control boards that may actually strengthen PBMs' market position while failing to protect patient interests.

The Path Forward: Ending PBM Abuse

The FTC's comprehensive report demands immediate legislative action to dismantle PBM practices that systematically undermine patient care and inflate healthcare costs. Based on the documented evidence, reform must target three critical areas:

Dismantling Anti-Patient Practices

• Prohibit PBMs from forcing patients into proprietary pharmacy networks

• Ban exclusionary network designs that restrict patient choice

• Eliminate spread pricing mechanisms

• Terminate retroactive pharmacy reimbursement clawbacks

• Prevent prescription steering practices that disrupt established care relationships

Establishing Real Accountability

• Create federal oversight with clear investigative and enforcement powers

• Mandate comprehensive transparency in PBM revenue streams

• Implement rigorous contract review processes for health plans

• Develop meaningful penalties for violations that harm patient care

Protecting Specialized Care

• Guarantee patient pharmacy selection autonomy

• Preserve continuity of care for chronic condition management

• Safeguard community pharmacies providing specialized services

• Ensure access to providers with deep therapeutic expertise

• Protect pharmacies serving vulnerable and marginalized communities

The FTC's findings provide irrefutable evidence of systematic abuse. Ineffective approaches like Prescription Drug Affordability Boards (PDABs) and industry self-regulation have failed. Federal legislation with clear enforcement mechanisms is the only path to stopping these harmful practices and protecting patient access to care.

Healthcare advocates must sustain pressure on Congress and the new administration to implement comprehensive reforms. The time for incremental compromises has passed. We need decisive action to end PBM practices that prioritize corporate profits over patient health.

Proposed Cigna-Humana Merger Raises Stakes for Healthcare Access Amid Election Uncertainty

Cigna Group and Humana are once again discussing a merger that could create a $140 billion insurance giant, further consolidating the U.S. healthcare system. The talks are in preliminary stages after collapsing last December over disagreements about financial terms. FierceHealthcare notes that while discussions have resumed, no formal agreements have been made yet.

The stakes of this merger extend far beyond corporate boardrooms; it directly impacts millions of people's access to essential healthcare services and affordable medications. With Cigna’s Express Scripts commanding 24% of the PBM market and Humana operating the fourth-largest PBM with 8%, the merger raises serious questions about market concentration and its impact on healthcare affordability and accessibility.

Election Outcome Could Determine Merger’s Fate

The timing of the renewed merger talks between Cigna and Humana is no coincidence, occurring just weeks before a presidential election that could heavily influence the merger’s prospects. Bloomberg reports, Wall Street analysts believe that the deal's future hinges on the election outcome, with talks likely "only tangibly moving forward if Trump wins."

Under a Trump Administration, a more favorable regulatory environment might be expected given the GOP's general preference for deregulation. However, skepticism about large corporate mergers from Trump's base and running mate JD Vance complicates this picture. Vance has even praised current FTC Chair Lina Khan, saying she is "one of the few people in the Biden Administration who I think is doing a pretty good job," indicating a potentially less favorable view of healthcare consolidation than the GOP has historically maintained. On the other hand, a Harris Administration would likely continue the Biden Administration's stricter stance on healthcare consolidation, focusing particularly on protecting underserved and rural communities.

TD Cowen analyst Ryan Langston suggests that any formal merger announcement before the election is unlikely, further underscoring the centrality of the election to the deal’s future. Meanwhile, federal scrutiny of pharmacy benefit managers (PBMs) remains high, with the Federal Trade Commission (FTC) accusing the largest PBMs of using negotiation tactics that inflate drug costs, adding another layer of complexity to the regulatory landscape.

Understanding the Scale and Implications of the Proposed Merger

The proposed Cigna-Humana merger would unite two companies with largely complementary business models. Modern Healthcare reports that Cigna dominates in commercial coverage with 16.1 million members, while maintaining a smaller Medicare presence. In contrast, Humana has fewer than 600,000 commercial customers and is withdrawing from employer-sponsored insurance, while standing as the second-largest Medicare insurer with 8.8 million members.

This complementary structure could ease some antitrust concerns, but the combined PBM operations present a more complex challenge. The American Medical Association's (AMA) position on the CVS-Aetna merger highlighted similar concerns, noting that such consolidation can limit competition and reduce patient access to specialty drugs, which may parallel the challenges presented by this merger. Healthcare Huddle's analysis suggests that a merger would create a PBM entity large enough to rival market leader CVS Caremark, potentially controlling 32% of the market. Such concentration in the PBM space has already drawn scrutiny from regulators and policymakers.

To address regulatory hurdles, Cigna is planning to finalize the sale of its Medicare Advantage business to Health Care Service Corporation for $3.3 billion, a move that Modern Healthcare suggests could ease antitrust concerns by eliminating overlapping services. Meanwhile, Humana has faced challenges, with its value dropping nearly 40% this year due to declining Medicare plan enrollments and performance shortfalls resulting in the Centers for Medicare and Medicaid Services (CMS) downgrading their Medicare Advantage (MA) plans’ star ratings.

The combined entity would have a market capitalization of around $121 billion based on October 2024 valuations. While still smaller than UnitedHealth Group's $528 billion market cap, the merger would establish a stronger competitor across both the insurance and PBM markets, potentially reshaping competitive dynamics in the healthcare sector.

PBM Consolidation: Increased Scrutiny as FTC Takes a Stand

The potential merger's impact on pharmacy benefit management deserves particular attention, especially given recent FTC actions against PBMs. Currently, three PBMs control approximately 80% of the market, with Cigna's Express Scripts commanding about 24% and Humana's pharmacy division holding 8% market share, according to Bloomberg Law analysis.

The timing is particularly sensitive given the FTC's September 2024 administrative complaint against major PBMs. As previously reported by CANN, the FTC alleges these companies engaged in anticompetitive rebating practices that artificially inflated drug prices. The FTC investigation has revealed troubling practices, with PBMs frequently prioritizing higher rebates over lower net prices, leading to the exclusion of lower-cost alternatives and driving up drug prices. A combined Cigna-Humana PBM would control 32% of the market, potentially creating an entity large enough to rival market leader CVS Caremark.

This level of concentration raises serious concerns about negotiating power and drug pricing. Bloomberg Law notes that employer groups are particularly wary of the merger, fearing it could make an already complicated market even more opaque for health plans and potentially lead to higher costs for company health plans.

Impact on Healthcare Access and Specialty Care

Healthcare consolidation has long presented significant barriers for patients who rely on specialized care, including those living with chronic conditions like HIV. For example, patients often face more restrictive formularies, meaning fewer options for necessary medications, and increased prior authorization requirements, which can delay access to critical treatments. This is especially problematic for patients with chronic conditions like HIV, where timely and consistent access to specific medications is critical for maintaining health. Research published by Tufts Center for the Evaluation of Value and Risk in Health shows that consolidation often leads to restricted specialty care access, which can be particularly detrimental to people requiring ongoing care management. For instance, patients with cancer may find it harder to access specialized oncologists or newer, targeted therapies due to narrower provider networks and limited formularies. These barriers do more than inconvenience patients—they delay treatments, ultimately impacting patient outcomes.

The National Academy for State Health Policy (NASHP) reports that consolidated health systems frequently use their market power to implement restrictive contracts that can limit patient choice. These contracts often include clauses that prevent insurers from steering patients to higher-value care providers or limit the ability to negotiate better prices, ultimately restricting patient options and driving up healthcare costs. This can particularly impact people relying on specialty medications and services, like those living with HIV who need consistent access to specialists and specific drug regimens.

Consolidated systems often impose more stringent prior authorization requirements and narrower specialty pharmacy networks, as noted in the BMC Health Services Research study. The AMA highlights that merged entities often use their power to make access to specialty drugs more restrictive, which further limits patient options and exacerbates challenges for those needing specialized care. For people living with HIV, disruptions or delays in accessing antiretroviral medications could have serious health implications.

The combined entity's negotiating power could lead to more restricted provider networks. NASHP's research shows that consolidated entities often leverage market power to demand higher reimbursement rates, resulting in narrower networks that limit access to specialists, including HIV care providers.

Navigating Complex Regulatory Hurdles

The proposed Cigna-Humana merger faces significant regulatory scrutiny at both federal and state levels. The merger is likely to undergo a 12- to 24-month regulatory review, particularly given the current antitrust enforcement environment. Regulatory challenges are expected to include a detailed examination of the potential impact on competition, particularly in the PBM market, and whether the merger could lead to increased healthcare costs for consumers. The recent FTC crackdowns on healthcare companies, which could provide additional insights into the type of scrutiny expected during the review, particularly regarding anti-competitive practices and market concentration. Both the FTC and the U.S. Department of Justice are likely to scrutinize any potential overlap in services and demand divestitures to ensure that competition remains intact. Additionally, state-level reviews could require concessions to protect local markets from becoming overly concentrated.

Kaiser Family Foundation's analysis highlights how the FTC and Department of Justice have increased their focus on both horizontal and vertical integration effects. They now examine broader implications for healthcare costs and access, beyond direct market overlap.

State-level review adds another layer of complexity. KFF notes that 34 states and DC require notification of health insurance mergers, with 13 states requiring explicit approval. This multi-state review process could extend the timeline and require concessions to address state-level concerns.

Looking Ahead: Implications for Healthcare Access and Affordability

The proposed Cigna-Humana merger represents more than a business combination—it embodies the tension between market consolidation and healthcare accessibility. While the companies argue that their complementary business models could improve efficiency, the merger's impact on PBM market concentration and healthcare access demands careful scrutiny.

The immediate path forward hinges significantly on the November 5th election outcome, with analysts suggesting meaningful progress is unlikely before then. Beyond the election, the regulatory review process could extend into 2026, as federal and state regulators examine the merger’s implications for competition, drug pricing, and healthcare access.

For healthcare stakeholders, especially those relying on specialty care and medications, the merger’s outcome could significantly impact their care access and costs. The combined entity's expanded market power in both insurance and PBM sectors could reshape provider networks, prior authorization processes, and drug formulary designs.

Advocacy organizations and policymakers must carefully monitor and engage in the regulatory review process to ensure that any approved merger includes meaningful protections for healthcare access and affordability. The FTC’s current focus on PBM practices provides an important opportunity to address long-standing concerns about drug pricing and access in any merger approval conditions.

Biden’s Inaction Leaves Copay Assistance in Limbo

Inflated prescription drug costs in the United States continue to place a significant burden on people living with chronic conditions. Copay assistance programs, designed to help people afford their medications, have become essential. Yet recent policy decisions and industry practices have put these programs at risk, potentially jeopardizing access to necessary treatments.

The Biden Administration's recently proposed 2026 Notice of Benefit and Payment Parameters (NBPP) rule omits crucial regulations that patient advocates have long been demanding. This inaction allows insurers and pharmacy benefit managers (PBMs) to continue profiting from billions of dollars of drug manufacturer copay assistance intended for patients.

The State of Copay Assistance

Copay assistance programs, primarily offered by pharmaceutical manufacturers, provide financial support to help cover out-of-pocket costs for prescription medications. As health insurance plans increasingly shift costs to patients through higher deductibles and copayments, these programs have become crucial.

According to the latest data from The IQVIA Institute, manufacturer copay assistance offset patient costs by $23 billion in 2023, a $5 billion increase from the previous year. This figure represents 25% of what retail prescription costs would have been without such assistance. Over the past five years, copay assistance has totaled $84 billion, highlighting its importance in maintaining access to medications.

Despite the significance of copay assistance, copay accumulator and maximizer programs accounted for $4.8 billion of copay assistance in 2023—more than double the amount in 2019. Implemented primarily by pharmacy benefit managers (PBMs) and insurers, these programs prevent assistance from counting towards patients' deductibles and out-of-pocket maximums. This practice effectively nullifies the intended benefit of copay assistance, leaving people to face unexpected and often unaffordable costs later in the year.

Recent scrutiny of PBMs has brought attention to these practices. As discussed in our recent article on PBMs, the Federal Trade Commission (FTC) has filed a lawsuit against the largest PBMs for alleged anticompetitive practices that inflate drug costs and limit access to medications. These developments underscore concerns about how PBM practices, including the implementation of copay accumulator programs, impact medication affordability and access.

The impact on access is serious. IQVIA reports that in 2023, patients abandoned 98 million new therapy prescriptions at pharmacies, with abandonment rates rising as out-of-pocket costs increase. This trend highlights the critical role copay assistance plays in helping people not only initiate but also maintain their prescribed treatments.

Public opinion strongly supports action on this issue. A Kaiser Family Foundation survey found that 80% of adults believe prescription drug costs are unreasonable, with broad support for various policy proposals to lower drug costs. This sentiment reflects the public's recognition of the financial challenges faced in accessing necessary medications.

The Legal and Regulatory Landscape

The regulatory environment surrounding copay assistance programs has been in flux, with significant developments in recent years. On September 29, 2023, a federal court struck down a rule that allowed insurers to decide whether copay assistance would count towards patients' out-of-pocket maximums. This ruling reinstated the 2020 NBPP rule, which required insurers to count copay assistance towards patient cost-sharing, except for brand-name drugs with available generic equivalents.

Despite this, the federal government declared that it would not enforce the court's decision or the 2020 NBPP rule until new regulations are issued. This inaction has left patients facing continued uncertainty about the status of their copay assistance.

On January 16, 2024, the Biden Administration dropped its appeal of the court decision. While this action confirms that the 2020 NBPP rule will generally apply until new rules are issued, the lack of enforcement leaves plans and insurers in a gray area regarding their copay accumulator programs.

At the state level, there has been a growing movement to address copay accumulator programs. As of 2024, 21 states, the District of Columbia, and Puerto Rico have enacted laws addressing the use of these programs by insurers or PBMs. These laws generally require any payments made by or on behalf of the patient to be applied to their annual out-of-pocket cost-sharing requirement. While these state actions provide important protections, they do not cover all insurance plans, particularly those regulated at the federal level.

The 2026 Notice of Benefit and Payment Parameters Proposal

The proposed 2026 NBPP rule, released by the Centers for Medicare & Medicaid Services (CMS), has drawn criticism from patient advocacy groups for significant omissions related to copay assistance and essential health benefits (EHB).

Notably absent from the proposed rule are regulations clarifying whether copay assistance will count toward patient cost-sharing. This omission perpetuates uncertainty created by previous conflicting rules and court decisions, allowing insurers and PBMs to continue implementing copay accumulator programs that can leave people with unexpected and unaffordable out-of-pocket costs.

The proposal also fails to include a provision to ensure that all drugs covered by large group and self-funded plans are considered essential health benefits, despite previous indications that such a provision would be forthcoming. This failure to close the EHB loophole allows employers, in collaboration with PBMs and third-party vendors, to designate certain covered drugs as "non-essential," circumventing Affordable Care Act (ACA) cost-sharing limits designed to protect people from excessive expenses.

By exploiting this loophole, plan sponsors can collect copay assistance provided by manufacturers without applying it to beneficiaries' cost-sharing requirements. This practice effectively doubles the financial burden on patients: first, by accepting the copay assistance, and second, by requiring them to pay their full out-of-pocket costs as if no assistance had been provided.

Recent research by the HIV+Hepatitis Policy Institute has revealed that over 150 employers and insurers are taking advantage of the EHB loophole. This list includes:

• Major companies such as Chevron, Citibank, Home Depot, Target, and United Airlines

• Universities including Harvard, Yale, and New York University

• Unions like the New York Teamsters and the Screen Actors Guild

• States such as Connecticut and Delaware

• Insurers, including several Blue Cross/Blue Shield plans

Patient advocacy groups have reacted strongly to these omissions. Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, stated, "Every day these rules are delayed is another day that insurers and PBMs are pocketing billions of dollars meant for patients who are struggling to afford their drugs." This sentiment reflects the frustration of many who have long advocated for stronger protections.

The widespread exploitation of the EHB loophole underscores the urgent need for federal action to protect patients from these practices. The failure to address these critical issues in the 2026 NBPP proposed rule highlights a significant setback in efforts to improve medication affordability and access for people living with chronic conditions.

The Impact on Patients: Data and Experiences

The real-world impact of copay accumulator programs and the EHB loophole is reflected in both data and personal experiences. IQVIA reports that patient out-of-pocket costs reached $91 billion in 2023, an increase of $5 billion from the previous year. This rise in costs comes despite the $23 billion in copay assistance provided by manufacturers, highlighting the growing financial burden on patients.

Prescription abandonment is particularly concerning. Patients abandoned 98 million new therapy prescriptions at pharmacies in 2023, with abandonment rates increasing as out-of-pocket costs rise. More than half of new prescriptions for novel medicines go unfilled, and only 31% of patients remained on therapy for a year. These statistics highlight the direct link between cost and medication adherence.

People across the country are facing these challenges. For example, a mother whose daughter lives with cystic fibrosis shared her experience with a copay accumulator program. In early 2019, her family's out-of-pocket cost for her daughter's medication suddenly jumped from $30 to $3,500 per month when their insurance plan stopped applying copay assistance to their deductible. This unexpected change forced the family to put the cost on credit cards, creating significant financial strain and unnecessary medical debt.

Similarly, a person living with psoriasis faced steep increases in medication costs when their insurance company stopped counting copay assistance towards their deductible. The copay rose from $35 to $1,250 monthly, leaving them with only $26 from their disability payment after covering the copay.

These stories are not isolated incidents. People living with conditions such as HIV, hepatitis, multiple sclerosis, and hemophilia are facing similar challenges. The impact extends beyond financial stress, affecting medication adherence and, ultimately, health outcomes. For many, the choice becomes one between essential medications and other basic needs such as food and shelter—a decision no one should have to make.

Policy Recommendations and Advocacy Efforts

Patient advocacy groups are intensifying efforts for policy changes at both the federal and state levels. The All Copays Count Coalition, comprising over 80 organizations representing people living with serious and chronic illnesses, has been at the forefront of these efforts. In a letter to federal officials, the coalition urged for a revision of the cost-sharing rule to include clear protections ensuring that copayments made by or on behalf of a patient are counted towards their annual cost-sharing contributions. Specific recommendations include:

1. Maintaining the protections included in the 2020 Notice of Benefit and Payment Parameters.

2. Ensuring that copay assistance counts for medically appropriate medications, even when generic alternatives are available.

3. Limiting Health Savings Account-High Deductible Health Plan (HSA-HDHP) carve-outs to situations where using copay assistance would result in HSA ineligibility.

At the state level, advocacy efforts have led to the passage of laws restricting copay accumulator programs in 20 states, the District of Columbia, and Puerto Rico as of summer 2023. However, these state-level protections do not cover all insurance plans, particularly those regulated at the federal level, highlighting the need for comprehensive federal action.

Advocates are calling for:

1. Immediate enforcement of the 2020 NBPP rule, requiring insurers to count copay assistance towards patient cost-sharing in most cases.

2. Swift action to close the essential health benefits loophole for all plans, including large group and self-funded plans.

3. Increased oversight and regulation of PBM practices, particularly regarding copay accumulator and maximizer programs.

4. Passage of comprehensive federal legislation to protect those relying on copay assistance.

As Carl Schmid emphasized, "While they have gone on record that they will issue these rules, the clock is ticking and there isn't much time left." This reflects the growing frustration among patient advocates with the administration's delays in addressing these issues.

Policymakers must act swiftly to close the essential health benefits loophole and ensure that all copay assistance counts towards patients' out-of-pocket costs. Stakeholders across the healthcare ecosystem—from insurers and PBMs to pharmaceutical companies and patient advocacy groups—must collaborate to develop solutions that prioritize access and affordability. The health and well-being of millions depend on these critical policy changes.

How the IRA's Price Controls Could Backfire on Patients

For millions of Americans, health insurance offers a false promise. Despite paying premiums, deductibles, and copays, many still find themselves struggling to afford essential healthcare. In fact, a recent survey found that a staggering 43% of adults with employer-sponsored insurance—often considered the gold standard of coverage—find healthcare difficult to afford. This affordability crisis is poised to worsen, as the latest National Health Expenditure projections from the Centers for Medicare & Medicaid Services (CMS) reveal a troubling trend: while government spending on prescription drugs is projected to decrease, patient out-of-pocket costs are expected to rise. The projections forecast an 8.9% increase in hospital expenditures, coupled with a 1.4% decrease in retail prescription drug spending. This shift, driven in part by the Inflation Reduction Act's (IRA) price control provisions, threatens to undermine the law's intended goal of affordable healthcare and exacerbate existing health inequities. While the IRA aims to lower drug costs, its focus on price controls, rather than comprehensive patient protection mechanisms, is creating misaligned incentives that could backfire on the very people it aims to help.

The IRA's Price Controls: A Double-Edged Sword

The IRA's approach to lowering drug costs centers on empowering the government to directly negotiate prices with pharmaceutical companies. This change tackles a provision in the Medicare Part D program known as the "non-interference" clause, which previously prevented the government from directly negotiating drug prices. As a Kaiser Family Foundation (KFF) issue brief explains, "The Part D non-interference clause has been a longstanding target for some policymakers because it has limited the ability of the federal government to leverage lower prices, particularly for high-priced drugs without competitors." While this "non-interference" clause has long been a target for reform, the IRA's implementation creates a ripple effect that extends beyond simply lowering the sticker price of medications. The Congressional Budget Office (CBO) estimates that these drug pricing provisions will reduce the federal deficit by $237 billion over 10 years, suggesting a significant shift in spending away from the government. However, this shift comes at a cost. The IRA's emphasis on price controls, rather than comprehensive patient protection mechanisms, disrupts existing rebate structures that have been crucial in expanding access to medications, particularly for low-income patients and those with chronic conditions.

Programs like 340B and Medicaid rely on a system of manufacturer rebates to make medications more affordable. In essence, drug companies provide rebates to these programs in exchange for having their drugs included on formularies and made available to a large pool of patients. These rebates help offset the cost of medications, allowing safety-net providers to stretch their limited resources and serve more patients. However, the IRA's price controls could disrupt this delicate balance. By directly negotiating lower prices with manufacturers, the government might inadvertently reduce the incentive for companies to offer substantial rebates to programs like 340B and Medicaid. This could lead to higher costs for these programs and ultimately limit access to medications for vulnerable populations.

This means that programs like 340B and Medicaid, which rely on manufacturer rebates to offset costs and provide affordable medications to vulnerable populations, could be significantly undermined by the IRA's price control measures.

Further complicating the issue is the potential for pharmaceutical companies to adapt to the IRA's price controls by strategically setting higher launch prices for new drugs. This tactic allows them to recoup potential losses from negotiated prices in the future, effectively shifting the cost burden onto other payers, including patients. The CBO projects that this trend of higher launch prices would disproportionately impact Medicaid spending, placing a greater strain on a program already facing significant enrollment fluctuations and budgetary pressures. The KFF brief warns that, "Drug manufacturers may respond to the inflation rebates by increasing launch prices for drugs that come to market in the future." This means that while the IRA might appear to lower drug costs in the short term, it could inadvertently fuel a long-term trend of rising prices for new medications, ultimately impacting patient affordability and access to innovative therapies.

Hospitals: Benefiting from the System While Patients Pay the Price

The CMS projections forecast an alarming 8.9% increase in hospital expenditures, raising questions about the drivers of this unsustainable growth. A closer look reveals a troubling connection between this trend and the 340B Drug Pricing Program, a federal initiative designed to help safety-net hospitals provide affordable medications to low-income patients. The CBO's analysis of 340B spending reveals an explosive 19% average annual growth from 2010 to 2021, significantly outpacing overall healthcare spending growth. This dramatic increase is largely attributed to hospitals, particularly those specializing in oncology, which are increasingly purchasing high-priced specialty drugs through the program. As the CBO presentation states, "340B facilities benefit from the program because the difference between the acquisition cost and the amount they are paid (often called the 'spread') is larger for drugs acquired through the 340B program." This suggests that hospitals are capitalizing on the 340B program's discounts to acquire expensive medications, potentially driving up their overall spending. But are these savings being passed on to patients? Evidence suggests otherwise.

This suspicion of hospitals leveraging the 340B program for profit is further reinforced by a UC Berkeley School of Public Health study which found that hospitals are charging insurers exorbitant markups for infused specialty drugs, many of which are likely acquired through 340B. The study reveals that hospitals eligible for 340B discounts charge insurers a staggering 300% more for these drugs than their acquisition costs, effectively pocketing a substantial profit margin. This practice raises serious concerns about whether the 340B program, designed to help vulnerable patients access affordable medications, is instead being exploited by hospitals to boost their bottom line. As Christopher Whaley, a co-author of the UC Berkeley study, aptly points out, "It is ironic that some hospitals earn more from administering drugs than do drug firms for developing and manufacturing those drugs. At least drug firms invest part of their revenues in innovation; hospitals invest nothing." This highlights a perverse incentive structure where hospitals benefit financially from a program intended to help patients, while those same patients are often left facing inflated prices for essential medications and crippling medical debt.

The Affordability Crisis: A Broken Promise for Patients

This concerning trend of rising healthcare costs and shifting burdens is not limited to those reliant on safety-net programs. The Commonwealth Fund's 2023 Health Care Affordability Survey paints a bleak picture of the widespread affordability crisis facing Americans across all insurance types. The survey found that 43% of adults with employer coverage find healthcare difficult to afford, shattering the illusion that employer-sponsored insurance guarantees financial protection. These findings challenge the fundamental assumption that health insurance in the United States equates to affordable access to care. As the survey report states, "While having health insurance is always better than not having it, the survey findings challenge the implicit assumption that health insurance in the United States buys affordable access to care." This sentiment is echoed by millions of Americans who, despite having insurance, are forced to make difficult choices between their health and their financial well-being.

Even the IRA's lauded out-of-pocket (OOP) cap on Part D drug costs, while offering some relief, fails to address the root causes of this affordability crisis. An analysis by Avalere reveals that even with the cap in place, a significant number of Medicare beneficiaries will continue to face high healthcare costs, particularly those with lower incomes or specific health conditions. The analysis projects that 182,000 beneficiaries will spend over 10% of their income on Part D drug costs in 2025, despite the OOP cap. This sobering statistic underscores the limitations of focusing solely on OOP costs without addressing the underlying drivers of high drug prices and healthcare spending. As the Avalere analysis cautions, "High OOP costs are expected to result in many enrollees still facing affordability challenges in 2025." The findings from both the Avalere analysis and the Commonwealth Fund survey highlight a critical gap in the IRA's approach: it fails to adequately protect the most vulnerable patients from the financial burden of healthcare.

A Call for Patient-Centered Solutions

The CMS projections, alongside independent analyses of the pharmaceutical market and patient affordability, paint a clear picture: the current trajectory of US healthcare spending is unsustainable and inequitable. The IRA's price control provisions, while well-intentioned, risk exacerbating the affordability crisis by disrupting existing rebate structures, incentivizing higher launch prices for new drugs, and shifting costs onto patients. This shift is further compounded by unchecked hospital spending, particularly on high-priced specialty medications acquired through the 340B program. The result is a system where hospitals and pharmaceutical companies benefit, while patients—especially those with lower incomes or chronic conditions—are left struggling to afford essential care.

To be sure, the IRA includes provisions aimed at directly helping patients, such as the out-of-pocket cap on Part D drug costs and the expansion of subsidies for marketplace plans. These are positive steps towards easing the financial burden of healthcare for many Americans. However, the law's broader focus on price controls, without sufficient attention to patient protection mechanisms and the potential for unintended consequences, threatens to undermine these gains and create new challenges for those who rely on safety-net programs like 340B and Medicaid.

It's time for a fundamental shift in our approach to healthcare reform. Policymakers must move beyond a narrow focus on price controls and embrace a patient-centered approach that prioritizes affordability, access, and equity. This requires a multi-pronged strategy that includes:

• Reassessing the IRA's reliance on price controls: Instead of simply dictating prices, policymakers should explore alternative approaches that strengthen patient protections, preserve rebate structures that support broader access, and address the potential for cost-shifting onto patients.

• Tackling hospital pricing practices: Increased transparency and accountability in hospital pricing, particularly for inpatient medications, is necessary to ensure that safety-net programs like 340B are truly benefiting patients and not being exploited for profit.

• Investing in alternative care models: Promoting value-based care and investing in primary and preventive care can reduce reliance on expensive hospital stays, improve health outcomes, and make healthcare more affordable for everyone.

The promise of affordable, accessible healthcare for all Americans remains unfulfilled. We must demand a healthcare system that puts patients first, not profits. Only then can we ensure that everyone has the opportunity to live a healthy and fulfilling life, regardless of their income or health status.

Closing the EHB Loophole: Louisiana Leads, But National Action is Needed

"Jason," a Utah AIDS Foundation client, confronted a brutal truth in the wake of his HIV diagnosis: a healthcare system more interested in profits than patients. Faced with a staggering $3,200 co-pay for his HIV medication—well beyond his financial reach—Jason's plight was exacerbated by his insurance company's implementation of a co-pay accumulator policy. This policy effectively nullified the assistance he once relied on, leaving him stranded without his medication for months. "I felt scared and discouraged when I was told I have a $3,200 co-pay to pick up my HIV meds. I don’t even make that much money each month," Jason shared, his voice a stark indictment of a system failing its most vulnerable. His story, spotlighted by The Utah All Copays Count Coalition, underscores a pervasive issue: patients across the nation are cornered into impossible choices between health and financial ruin, casualties of an insurance industry's practices that blatantly prioritize margins over meaningful care.

Understanding the Problem

Jason's heartbreaking story sheds light on interconnected issues fueling the healthcare affordability crisis: co-pay accumulators and the Essential Health Benefits (EHB) loophole. These tactics have a devastating effect on patient well-being, so let's break them down:

Co-pay Accumulators: A Profit-Driven Scheme at the Expense of Patients

These programs allow insurers to take the value of manufacturer-provided coupons or patient assistance and apply it towards an annual deductible, but not towards a patient's out-of-pocket maximum. This means even with generous assistance, patients can face thousands of dollars in additional costs, forcing them to ration medication or abandon treatment altogether. The numbers reveal the widespread impact:

• The AIDS Institute reports that co-pay accumulator adjustment programs (CAAPs) are present in a shocking 66% of individual Affordable Care Act (ACA) marketplace plans nationwide, with some states showing 75-100% of available plans utilizing these tactics.

Co-pay Maximizers: A Further Threat to Affordability

Insurers are increasingly employing an even more severe tactic known as 'co-pay maximizers'. These programs set a patient's co-pay to the full amount of available assistance, even if it's intended to cover an entire year's medication cost. Unlike accumulators, which prevent assistance from counting towards the out-of-pocket maximum, maximizers essentially 'use up' all available assistance in a single payment. This leaves patients facing the full, often unaffordable, cost of medication for the rest of the year. The combined use of maximizers and accumulators is becoming increasingly common, leaving patients with limited options and magnifying the financial burden of life-saving treatments. A staggering 72% of commercially insured beneficiaries in the United States were enrolled in plans with co-pay maximizers as of 2023, according to a Drug Channels analysis.

This highlights the alarming prevalence of these practices and the immense pressure they place on patients struggling to manage chronic conditions.

The Essential Health Benefits (EHB) Loophole: Insurers Exploit Gaps in Coverage

Under the ACA, states have flexibility in selecting the 'essential' healthcare services that insurers must cover. Some insurers manipulate this system by classifying necessary medications (especially for chronic conditions) as 'non-essential'. This lets them continue using co-pay accumulators and maximizers on these medications, further undermining patient affordability.

• Centers for Medicate & Medicaid Services’ (CMS) data reveals that in many states, critical treatments for chronic disease management are not guaranteed coverage under 'essential' benefits. This means patients could be subject to accumulators and maximizers indefinitely, locked in a cycle of escalating costs even when reaching their out-of-pocket maximums.

The takeaway is clear: these practices prioritize the shareholder profits of insurance companies over the health and well-being of patients, especially those battling chronic and complex conditions.

Federal Action – Progress and Pitfalls

The CMS Notice of Benefit and Payment Parameters for 2025 signals a notable yet incomplete step towards remedying the healthcare affordability crisis. It attempts to close the Essential Health Benefits loophole starting in 2027 by mandating routine, non-pediatric dental coverage as an essential benefit. While seemingly tangential, this amendment serves as a precursor to addressing broader coverage issues, demonstrating the potential to mitigate part of the financial burdens that patients like Jason face. However, it underscores a significant gap in the rule's scope—its silence on co-pay accumulators and maximizers.

Limitations of the CMS Rule Change

The rule change’s failure to directly address co-pay accumulators and maximizers leaves a significant gap in patient protection. These payor-driven barriers systematically undermine patient affordability and access, especially for those managing chronic conditions. The absence of direct action against these schemes allows insurers to deploy cost-containment strategies that, while ostensibly designed to control expenditures, place the financial burden squarely on patients.

This oversight perpetuates financial hardship and deepens healthcare disparities. Accumulator and maximizer practices disproportionately affect marginalized populations, highlighting the limitations of regulatory changes that fail to comprehensively address the complex dynamics of healthcare affordability and access.

Without targeted measures to dismantle these financial mechanisms, efforts to expand coverage and close loopholes may achieve only superficial improvements. A significant portion of the population, particularly those managing chronic diseases, will continue to face insurmountable financial barriers to accessing essential treatments. This situation underscores the need for a more holistic approach to healthcare reform—one that confronts the financial mechanisms impairing patient care and seeks to eliminate systemic practices that prioritize profit over patient well-being.

Court Challenges: A Victory Shadowed by Continued Uncertainty

The battle against co-pay accumulators achieved a notable legal milestone when a federal court ruled these practices violated the Affordable Care Act's mandates. Despite this victory, the landscape remains fraught with ambiguity, largely due to the federal government's tepid response. The government’s retraction of its appeal in 2022, while upholding the court's decision, did not establish a nationwide prohibition on co-pay accumulators, leaving insurers in a legal gray area.

The HIV+Hepatitis Policy Institute has spotlighted the risk posed by the federal government's refusal to enforce the court's ruling against co-pay accumulators, shifting focus instead to addressing insurers' classification of certain drugs as “non-essential health benefits.” While the final 2025 Notice of Benefits and Payment Parameters rule curbs the classification of covered drugs beyond state benchmarks as non-essential, the government's inaction on co-pay accumulators marks a troubling disconnect between legal victories and their practical implementation.

This gap between legal wins and real-world application emphasizes the need for interventions at the state level. Louisiana's SB 210 emerges as a key measure, proposing tangible solutions to bridge the gap left by federal inaction and protect patients from the financial burdens imposed by insurers' exploitative tactics.

State Solutions: Louisiana as a Model

Louisiana's Legislative Response with SB 210

In an assertive move to safeguard healthcare affordability and accessibility, Senator Bob Owen's SB 210 targets the mechanisms of co-pay accumulators and the Essential Health Benefits (EHB) loophole. The legislation mandates comprehensive coverage under EHBs and holistic accumulator protections, ensuring all cost-sharing payments contribute towards the ACA's out-of-pocket maximums.

This legislative approach not only challenges the status quo but also highlights Louisiana's proactive stance in addressing healthcare disparities. By mandating that insurers recognize all federally designated EHB services and medications as essential, SB 210 directly confronts insurers' manipulative practices, ensuring patients receive the comprehensive coverage promised under the ACA.

Addressing the ‘Endless Deductible’

In a letter to the Louisiana State Senate Insurance Committee, CANN President and CEO Jen Laws warns that without robust protections like SB 210, insurers can impose what patients call "the endless deductible." This term illustrates the loophole that allows insurers to employ exploitative accounting practices, negating the ACA's intent to cap patient spending on healthcare. SB 210's provisions aim to close this loophole, ensuring patients are not burdened with exorbitant costs for essential treatments, thus preserving the ACA's core promise of affordable care.

In his letter, Laws reveals that Louisiana's health plan benchmarks do not guarantee coverage for essential cancer treatments such as radiation or chemotherapy, underlining the significance of SB 210. By ensuring that expenditures for such critical treatments are counted towards patients' out-of-pocket maximums, the bill offers a lifeline to those facing the daunting financial implications of treating life-threatening conditions. This measure is pivotal in bridging the gap left by the current healthcare system's shortcomings, providing patients with much-needed financial relief and access to life-saving treatments.

A Blueprint for National Reform

Louisiana's initiative serves as a compelling model for tackling the challenges posed by ambiguous EHB classifications, federal inaction, and exploitative co-pay practices. SB 210's success could inspire a wave of legislative efforts across the United States, advocating for a healthcare system that prioritizes patient well-being over payor profits. This approach highlights the potential for state-level innovations to influence national healthcare policy, paving the way for reforms that ensure healthcare accessibility and affordability for all, especially those living with chronic and life-threatening conditions.

Call to Action

The legislative changes proposed in Louisiana represent a critical juncture in the fight for healthcare affordability and access. To realize the full potential of these reforms, a concerted effort is needed from key stakeholders across the healthcare ecosystem:

For U.S. Policymakers:

Legislators at both state and federal levels must embrace proactive strategies to close the EHB loophole and regulate co-pay accumulator and maximizer use. Crafting and enacting policies that guarantee comprehensive coverage of essential health benefits and ensure all forms of patient assistance contribute towards out-of-pocket maximums are essential steps toward protecting patients from undue financial strain. Supporting state-level initiatives like Louisiana's SB 210 can serve as a foundation for broader national reforms, underscoring the importance of legislative action in safeguarding patient interests.

Healthcare Providers:

Medical professionals and healthcare institutions play a crucial role in advocating for their patients' rights and navigating the evolving insurance landscape. By staying informed about the implications of insurance policies on treatment access and affordability, healthcare providers can better support their patients in accessing the care they need. Engaging in policy discussions and supporting legislative efforts to address the EHB loophole and co-pay accumulator issue are necessary contributions to the broader push for healthcare reform.

Community Advocates and Patients:

The voices of patient advocacy groups and people affected by the healthcare system's complexities are instrumental in driving change. By raising awareness about the challenges posed by the EHB loophole and co-pay accumulators, mobilizing communities to demand reform, and sharing personal stories, advocates can influence policy decisions and encourage insurers to prioritize patient needs. Engaging in public discussions and advocating for policies that protect patients from harmful insurance practices are critical steps in building a more equitable healthcare system.

Actionable Next Steps:

• Reach out to state and federal representatives to express support for policies that ensure comprehensive coverage of essential health benefits and address the challenges posed by co-pay accumulators.

• Educate oneself and others about the impact of the EHB loophole and co-pay accumulators on healthcare affordability and access, leveraging resources and information provided by reputable patient advocacy organizations.

By uniting in the pursuit of meaningful healthcare reform, stakeholders across the spectrum can contribute to a future where healthcare accessibility and affordability are realities for all, especially for those facing chronic and life-threatening conditions. The journey toward closing the EHB loophole and eliminating unfair insurance practices demands collective action and unwavering commitment to patient well-being. Let's join forces to advocate for a healthcare system that truly serves the needs of its patients, ensuring equitable access to essential treatments and protections against financial hardship.

States Push PDABs Despite Warning Signs, Patient Concerns

The debate over how the U.S. tackles rising healthcare costs is as constant as the sun setting in east. Most Americans feel the financial pressures from the high cost of their healthcare, evidenced by individual households holding 27% of the nation’s $4.3 trillion health-related expenditure burden. Healthcare spending is fragmented and multifaceted, being comprised of expenses such as hospitals, residential and personal care facilities, medical providers, technology, and retail prescription drugs. Despite the complexities of the healthcare market, pharmaceutical expenditures are often the most simple target to attack, often accompanied by solutions that seem way too good to be true. The fact is, access to prescription drugs is a significant part of modern medicine but there is nothing simple about how prescription drugs are brought to market and sold to consumers. In 2022, $633.5 billion was spent in the U.S. on prescription drugs, yet overall prescription drug expenditures by the government, private insurers, and patients were less than $1 out of every $7 spent on healthcare.

In recent history, in an attempt to create a “simple” solution to the costs John and Jane Q. Public pay for prescription drugs, through legislation, several states have created PDABs. PDABs are Prescription Drug Affordability Boards, also called Prescription Drug Advisory Boards. In theory, a board created to lower the cost of drugs for patients sounds like a good thing. However, the manner in which PDABs are currently set to operate is more harmful than good. Patients are not included in the development of the PDABs' decisions when those decisions directly affect their lives.

That is why the Community Access National Network (CANN) entered this policy and advocacy space. The boards have the wrong focus and don’t have patients’ interests as the priority. There is a difference between access and affordability. Jen Laws, C.E.O. of CANN, states, “Ultimately, CANN's focus is 'access' - it's in our name. Cheap gimmicks often pose serious potential to disrupt access for patients because we're the interest group here with the least in the way of resources (time, money, manpower). It's why we do what we do, and it's why we're going to keep doing what we do."

The prevalent tool PDABs utilize to lower costs is Upper Price Limits, or UPLs. The myopic focus is the allowable maximum a plan might reimburse a pharmacy or provider for any particular medication. However, this focus is not on lowering the price of what patients pay. A UPL does not determine what drug manufacturers charge for their drugs. It only sets the maximum that insurance plans will reimburse for drugs. That does not directly benefit patients because there is no mandate to pass any “savings” back to patients, for plans to retain medications with lower reimbursements, or for patients to have lower cost-sharing related to these medications. In general, patients pay for medications through co-pays and patient assistance programs. Although UPLs lower drug prices for payors, they increase the price patients potentially pay in terms of access by threatening the financial stability of providers and pharmacies, incentivizing utilization management that prioritize certain medications over others (regardless of an individual patient’s needs), and disrupt the provider-patient relationship by inserting the interests of payors over that of patients.

CANN has created multifaceted resources to educate the public about PDABs, their challenges, and possible solutions. People engage and comprehend in different ways. As such, CANN created varied communications. Long-form blog posts were written to be detailed sources of education and advocacy. A white paper was created as a downloadable handout to empower patients and enable them to engage with local PDABs or legislatures that are considering them in states that do not have them yet. For visual learners, CANN created an animated video that gives an overview of PDABs and their challenges, which is digestible and easily shareable.

With UPLs, the price patients potentially pay by losing access is more damaging than the monetary price tag of a drug a payor considers. UPLs that are set too low can cause drug manufacturers to reduce the production of drugs or place drug purchasing groups in the position of discounting distribution to a particular state altogether if low reimbursement makes them too costly to sell in that state. No purchaser or re-seller can sell to a state at a cost. No pharmacy can distribute a medication that costs them more to provide than they get paid in return. This creates shortages or removal of life-saving medications from the market, resulting in delays in care or patients being forced to utilize medicines that aren’t as efficacious as they and their physicians’ desired prescriptions.

UPLs also damage patient access by adversely affecting the 340B Drug Pricing Program entities that use the revenues from discounts to provide medications and other healthcare services to vulnerable populations without recourse for care. Lower revenues mean fewer services and possibly closures of facilities or program restrictions. AIDS Drugs Assistance Programs are largely dependent on using their 340B savings to extend access to care to poorest people living with HIV. We’re already seeing providers discuss this concern relative to insulin price caps. In a recent 340B Report article, the issue is summed up as follows: “Before 2024, most insulins had list prices of $300-$500 or more and were 340B penny-priced, so 340B providers earned savings of $300-$500 per prescription, Meiman said. However, now that many insulin list prices are $35, the 340B savings could drop to around $8 per prescription, she said. Historically, 340B savings on insulin have accounted for around 10% of community health system 340B revenue, she said.” Colle Meiman, a national policy advisor for the State & Regional Associations of Community Health Centers, also acknowledged this problem is a bit “counterintuitive” to how most policymakers think about drug pricing and reimbursements.

Moreover, lowering the price insurers are allowed to pay for medications is a double-edged sword. While on the surface, it seems like it would save payors money, it potentially only benefits PBMs in the short term and is an additional barrier to patient access. PBMs make their money from the profits they get via drug rebate revenues. Low UPLs will result in drug manufacturers lowering rebate levels and therefore lowering how much PBM’s might make on a particular medication. This means that PBMs could potentially increase the occurrence of benefit designs that restrict drug formularies to steer towards medications that result in more profit, not what is best for patients’ health. This already happens and is a concern many providers are beginning to voice. Additionally, they could enforce more utilization management, which again is a barrier to access but a way to increase their profitability.

CANN is energized to shine the light on PDABs and offer better solutions. Jen Laws explains, "Instead of nonsensical quick fixes, which aren't fixes to anything other than next quarter profits for payors, legislators should be focused on addressing the self-dealing nature of 'vertical integration', shoring up incentives for innovation, and meaningfully fixing benefit design that currently disadvantages patient access." Instead of a PDAB, states should consider a board focused on the patient perspective to evaluate benefit plan designs and offer recommendations to each state legislature about policy actions that will benefit patients as the priority stakeholder group.

In partnership with HealthHIV and The AIDS Institute, CANN will continue this work. It's crucial to stay abreast of the inner workings of policy and to advocate for the public proactively. Digging into the weeds with a patient focus enables advocacy groups to sound the alarm to the public as well as take the patient's perspective to those in power. Those in power are detached from the humanity behind the dollars and cents on their financial ledgers.