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:
Maintaining the protections included in the 2020 Notice of Benefit and Payment Parameters.
Ensuring that copay assistance counts for medically appropriate medications, even when generic alternatives are available.
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:
Immediate enforcement of the 2020 NBPP rule, requiring insurers to count copay assistance towards patient cost-sharing in most cases.
Swift action to close the essential health benefits loophole for all plans, including large group and self-funded plans.
Increased oversight and regulation of PBM practices, particularly regarding copay accumulator and maximizer programs.
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.