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February 19, 2020

If there is one goal Republicans and Democrats have in common these days, it is ensuring healthcare is more affordable for all Americans. This election year, healthcare has been a central policy focus for President Trump, the Democratic presidential candidates, and Congress. It is truly confounding, then, that the Department of Health and Human Services (HHS) has come out of left field, with a proposal in its 2021 Notice of Benefit and Payment Parameters (NBPP)—which would dramatically raise out of pocket costs for American patients.

CASE strongly opposes this HHS proposal, and has launched a new digital ad to highlight the harm to consumers from higher drug prices that will result. See our ad by clicking here:

In 2019, HHS appropriately proposed a policy that requires drug “manufacturer coupons to be counted toward patients’ annual limitation on cost-sharing in cases where a medically appropriate generic equivalent is not available.” Translated? Medications for rare diseases and chronic conditions—where there are often no “generic equivalents”—can be expensive. To alleviate this burden on patients, manufacturers offer copay assistance, making these drugs more affordable. The Department’s new proposal would reverse this.

In its new proposal, HHS would not allow these savings to be counted toward patient deductibles. If a patient has an annual deductible of $100 for a certain drug, but receives $50 in copay assistance from the manufacturer, they only pay $50 at their pharmacy, while still reapingthe benefits of the original $100 list price going toward the cost-sharing in their deductible—a win-win. In 2021, HHS would like to change this. In the scenario above, only the $50 paid at the pharmacy would now count toward a patient’s annual deductible, meaning their total out of pocket costs will be higher.

So, who are the big winners here? Insurers and Pharmacy Benefit Managers (PBMs)—healthcare’s biggest middlemen—who are pushing for accumulator adjustment programs (AAP) like the scenario outlined above.Under this policy reversal, they would essentially be passing along higher prices to consumers, which not only increases out of pocket costs, but also threatens patient access to needed treatments

There is momentum in Congress and throughout the healthcare industry in the fight to tackle rising costs for consumers. But this proposal would immediately raise the amount of money people pay for their drugs. HHS must come to its senses soon before it does real harm to American patients.