Copay Maximizers Face Criticism as J&J Files Legal Challenge

Multiple companies that provide alternate funding options for patients have been launching over the last several years. But one maximizer company has found itself the target of a legal battle with manufacturer Johnson & Johnson over its strategy to reclassify drugs and maximize the copay assistance it gets from pharma manufacturers.

Traditionally, when a manufacturer provides copay assistance for one of its drugs, that dollar amount would count toward the patient’s deductible and out-of-pocket maximum. But copay maximizer programs will distribute 100% of available manufacturer copay offset funds over 12 months, as opposed to copay accumulators, which apply the maximum manufacturer assistance up front and deplete that contribution before the end of the year. Payments in both approaches do not count toward members’ deductibles and out-of-pocket maximums.

Plans that work with maximizers classify certain drugs as “non-essential health benefits” (NEHBs) per the Affordable Care Act (ACA), and then the maximizer secures funding for patients who are prescribed those drugs considered non-essential from manufacturers’ or charitable foundations’ patient assistance programs, allowing patients to get their medication for free.

“The ACA requires coverage of a specific number of medications in each therapy class,” explains Ben Link, Pharm.D., vice president of pharmacy at 3 Axis Advisors. “Anything beyond that can be classified as NEHB, which enables these programs to operate to extract maximum copay dollars.” These companies, he tells AIS Health, a division of MMIT, “are taking advantage of what I may consider a loophole in ACA design.”

The programs have been used for a few years and are growing in popularity. For the Managed Care Oncology Index: Q3 2021, between Aug. 24, 2021, and Oct. 11, 2021, Zitter Insights polled 40 commercial payers covering 114.1 million lives about their use of maximizers and accumulators. Those with 21% of covered lives said they had implemented a copay maximizer before 2021, but payers representing 28% of beneficiaries said they implemented them during 2021 and those with 14% said they planned to implement them after 2021.

Zitter Insights also is a division of MMIT.

Chantell Sell Reagan, Pharm. D., director and national pharmacy clinical leader at WTW, tells AIS Health that about 30% to 40% of her company’s clients use “ACA-based copay assistance card programs.”

“When this started a couple of years ago, they mainly targeted small employers, unions and education health plans where patients may really need assistance,” says one unidentified industry expert. “However, now they have started to target larger employer groups and are starting to work with PBMs as well, selling their services as a way to reduce drug spend. It has been touted in the market as Accumulator 2.0.”

Indeed, Madelaine A. Feldman, M.D., a clinical assistant professor of medicine at Tulane University School of Medicine and provider with The Rheumatology Group in New Orleans, tells AIS Health that maximizers were “brought into being because accumulator programs…had very bad PR.” Patients lost access to drugs after they reached their maximum manufacturer assistance and had none of those payments applied to their deductibles. She describes rheumatologists switching patients from drug to drug throughout the year so they could afford to stay on treatment. Maximizers, she asserts, “came into being as a PR step.”

She also points out that payers and PBMs for a long time had decried patient-assistance programs, accusing them of inducing patients to take more costly drugs, but “you don’t hear that anymore.…It’s a dirty game.”

Indeed, during a recent webinar titled Specialty Drugs Update: Trends, Controversies, and Outlook, Adam J. Fein, Ph.D., CEO of Drug Channels Institute, pointed out that while payers and plan sponsors used to “hate” copay support, a 2022 report from Pharmaceutical Strategies Group, an EPIC company, found that 65% of benefits leader respondents (employers, unions/Taft-Hartley plans and health plans) offering specialty drug coverage through pharmacy and medical benefits believed that “copay assistance programs provide a good way to help plan sponsors save money,” compared with 28% of respondents four years ago. That finding, said Fein, “really blew my mind.”

PrudentRx Says It Is Not Taking Away Needed Assistance

Examples of maximizer firms include SaveOnSP, which works with Express Scripts, and PrudentRx, which works with CVS Health. SaveOnSP did not respond to an AIS Health request for comments. PrudentRx, however, responded to inquiries about its relationship to CVS and whether its program is taking away patient assistance from people who really need it, among other questions: “Thank you for reaching out. Unfortunately, we do not wish to discuss or have published the details of our solution. We can express that our service saves employees on their specialty medications and does not take manufacturer assistance away.”

According to an Express Scripts blog, “Despite the [NEHB] terminology, this classification does not speak to how critical a medication is. However, the ACA requires coverage of a specific number of medications in each therapy class. Anything beyond that can be classified as NEHB, which does not impact the patient’s ability to access the medication but does open up the opportunity to maximize copay assistance to benefit the plan and patients.”

In a webinar explaining SaveOnSP to a new client, Express Scripts’ Rachel Harmon, the “product director over the SaveOn program,” explained how the approach works. When a drug is designated non-essential, this does a few things. One is that it removes “the ceiling for how high you can set the member contribution” per the ACA’s annual out-of-pocket max for people with commercial insurance, allowing the company to be “able to fully leverage all the manufacturer assistance dollars to offset your plan costs.”

NEHBs also are “are not applicable to your maximum out-of-pocket accumulators,” she explained. “It’s kind of a win-win because if you put an accumulator adjustment program in place, patients get upset because if they’ve been receiving the benefit for a long time and hitting the max out-of-pocket, then they feel like they’ve had something taken away. In this scenario, what we’re doing is we’re creating savings for the plan, and we’re keeping the patient responsibility at zero, but we’re just not going to allow that to hit their max out-of-pocket. So there’s not really much to complain about when you get your specialty drug for free.”

She noted that there are more than 270 drugs in the program. To remain compliant with the ACA, companies must keep a certain number of products in their benefit design. For those drugs, patients can still use manufacturers’ copay assistance, but “it’s just that you’re not leveraging those savings dollars to create savings for the plan,” explained Harmon.

People must sign up for SaveOnSP to participate. When a client signs up for the program, members must fill their specialty drugs through Accredo Health Group, Inc., Express Scripts’ specialty pharmacy. When a person who has not enrolled tries to fill a prescription for a drug in the SaveOnSP program, Accredo receives a prompt noting that and tells the person that their insurance will not cover the drug and that it needs to connect the patient to SaveOnSP so they can be enrolled — a “warm transfer.”

A CVS Health document says that its specialty pharmacy does warm transfers to PrudentRx as well.

SaveOnSP looks at a manufacturer’s total amount of assistance provided per year and determines a patient’s monthly copay by dividing that total by 12. Harmon gave an example where if the average assistance per fill was $6,600, “we would literally set the patient copay at $6,600, and you would save that amount on every fill.” That money also does not go toward a patient’s deductible. The fees charged are 25% of a manufacturer’s copay support.

“Why do they feel entitled to get 25% of savings?” asks one unidentified longtime industry source. “To help people fill out applications” for patient assistance?

The CVS document says that the PrudentRx Copay Optimization Program “is designed based on a careful analysis of specialty drug cost, and availability and value of manufacturer copay cards, to determine how to optimize savings for payors and their plan members.”

When the maximizer programs started, Feldman says she spoke with a manufacturer that told her that those companies “would file a false claim every month to see what was left on the copay card” for those drugs in patient assistance programs that did not disclose the total amount they provided per patient in order to “maximize their take on a card.” If there was still money available, they “would increase the patient cost share.” Feldman clarifies that she is unsure whether SaveOnSP does this as well.

SaveOnSP, Harmon said, has researched “which programs have the most lucrative copay assistance programs,” and it determines the areas of biggest member utilization and the most assistance money to create its drug list. That list, Harmon explained, is evaluated “constantly,” and if funding for a drug goes away, it can be removed from the list, and members on that drug are opted out of the program and transition to the original plan design and its required copay. She noted that the adjudication process involves primary (health plan), secondary (pharma company) and tertiary (SaveOnSP) points to ensure that patients pay nothing.

Harmon said that the company estimates there is about $15 billion of available copay assistance within the pharmaceutical industry. A speaker from the client noted that the overall program savings is estimated to be $320,000 per month.

The Express Scripts blog explains that “by expanding the initial suite of copay solutions and working with SaveOnSP, Express Scripts was able to help create unique savings opportunities that maximize the use of manufacturer assistance funds. In 2020, plans that participated in these copay assistance solutions experienced a specialty trend of -7.2%, while nonparticipating plans experienced an 8.7% specialty trend.”

The CVS document estimates that clients that have adopted PrudentRx had approximately 22% average gross savings.

Johnson & Johnson Filed Lawsuit Against SaveOnSP

However, one manufacturer is questioning SaveOnSP’s strategy. In May, Johnson & Johnson Health Care Systems Inc. (JJHCS) filed a lawsuit (Case 2:22-cv-02632) against the company accusing it of exploiting the Janssen CarePath copay assistance program. SaveOnSP evaded the out-of-pocket maximum in the ACA by declaring drugs NEHBs, it alleges, and charged copays to boost the money it received from copay assistance. SaveOnSP used that “inflated copay cost to coerce patients to enroll” in its program.

JJHCS asserts that its patient assistance “is for patients—not for SaveOnSP or the health plans with which it partners.” It claims that “SaveOnSP’s scheme harms patients in a number of ways, including by selecting drugs for coverage based upon a profit motive and not medical need; wrongfully engineering a denial of coverage at the point of sale to coerce patients to participate in the program; and not counting any of the funds spent on patients’ medication towards their ACA maximum or deductible, thereby making their other healthcare needs more expensive.”

JJHCS says that because of SaveOnSP, it has paid “at least $100 million more in copay assistance than it otherwise would have for a purpose JJHCS did not intend, depleting the support available for patients who cannot afford their rising copays.” That increase in costs “will ultimately render it [i.e., patient assistance] untenable to provide.…That will irreparably harm JJHCS and the patients it serves.”

“Accredo encourages patients to enroll in SaveOnSP Program even though a patient’s copay may have already been reduced to $10, $5 or even $0 by CarePath,” points out Jesse C. Dresser, Esq., a partner in law firm Frier Levitt’s life sciences department who heads the firm’s pharmacy practice group.

Feldman says she was initially “exposed to SaveOn back in 2017” when the Coalition of State Rheumatology Organizations — of which she is now president — first found out about accumulators. A patient brought in a letter from SaveOnSP with a list of non-essential drugs that included treatments for conditions including multiple sclerosis, rheumatoid arthritis (RA) and breast cancer. It explained that the $70 copay for an RA drug the patient was paying was increasing to $1,000. If the patient enrolled in the program, she would have no copay, but even if she paid $1,000 for the drug out of pocket, that payment wouldn’t count toward her deductible or out-of-pocket max.

“They really do strong-arm patients into believing they won’t even be able to use the assistance,” she says.

Oftentimes, “patients don’t realize they’re not meeting the deductible,” adds Feldman. “The impact on them is minimal.” However, a potential problem for patients is when they need to pay for costs other than for the drug in the maximizer program and have yet to hit their deductible, such as someone needing to pay $3,000 for surgery.

JJHCS claims that it “has a valid and enforceable contract with the patients who use CarePath” and that program’s terms prohibit people who are using CarePath to be enrolled in SaveOnSP. By having patients enrolled in SaveOnSP agree to CarePath’s conditions, SaveOnSP is “intentionally causing those patients to breach their contract with JJHCS,” states the lawsuit. It also accuses SaveOnSP of “engaging in willful deceptive acts,” including falsely denying coverage at the point of sale to “coerce” people to enroll in its program and by not telling people they are breaching their contract with JJHCS.

The lawsuit asks for a jury trial and an injunction to prevent SaveOnSP from including Janssen drugs in its program.

“SaveOnSP has elements of a copay maximizer program,” observes Dresser. “The lack of clarity around SaveOnSP’s operations appears by design, with its website providing little information regarding its operations or services.”

“JNJ’s lawsuit reveals a shocking scheme by SaveOnSP, in partnership with ESI [i.e., Express Scripts], that resulted in financial harm to patients, providers, manufacturers and plan sponsors,” he tells AIS Health.

Because the money that SaveOnSP gets from a copay assistance program does not go towards a patient’s deductible or out-of-pocket maximum, “patients will still face higher costs for other health care services,” he notes. “What’s worse, the patients pay a monthly premium for their health benefits with the expectation that they will be receiving funded coverage for their medications. However, through these arrangements, PBMs pay little to nothing out of the funded benefit for these drugs, causing the patients to pay substantial sums for a benefit they theoretically could have equally received without insurance. These ‘savings’ (i.e., monies extracted by copay maximizers from manufacturers’ copay assistance programs) are not passed onto the patients who continue to pay rising premiums despite their PBMs paying less — and in some instances, nothing — for the patients to receive the medications.”

Via programs like SaveOnSP’s, PBMs will carve out drugs — “mostly expensive specialty drugs” — from formularies and fill prescriptions via free pharma-sponsored programs. “Through these free drug programs, the medications can only be filled at a limited number of pharmacies which have contracted with the manufacturer to provide free drugs to patients without insurance,” he states. “As a result, when a patient is pushed into the free drug program, independent pharmacies lose the ability to dispense the medication to the patient, and physicians administering drugs must obtain the medications through ‘white bagging’ from a free drug pharmacy. Both situations result in a loss of revenue to the provider, as well as disjointed care.”

According to Dresser, “Pharmaceutical manufacturers certainly bear the brunt of such copay maximizer programs,” which are “draining manufacturers’ benefits intended for patients. In the complaint, JNJ acknowledged that any attempt to reduce copay assistance on a patient-by-patient basis is unattainable due to the secretive nature of SaveOnSP’s operations. Likewise, PBMs including ESI benefit from the same secretive arrangement through creating a vertically integrated network, ranging from plan sponsors to providers. Such secretive arrangements only benefit PBMs and their vertically integrated partners at the expense of patients.

“Worse yet, however, copay maximizers and affiliated PBMs often engage in ‘double-dipping’ by extracting drug rebates in addition to excess discounts through copay assistance programs,” he continues. “In some instances, PBMs may be claiming rebates even when they have pushed the medication outside of coverage and required the patient to obtain the drug from the manufacturer’s free drug pharmacy. Indeed, JNJ disclosed in the complaint that it paid over $8 billion dollars for rebates in 2021 to commercial plans and PBMs.”

The longtime industry expert tells AIS Health that PBMs are “supposed to only collect rebates on drugs they adjudicated. In theory, a manufacturer could audit” a PBM to see if this is happening. “Typically on a quarterly basis, PBMs will send manufacturers a claims data dump of all their drugs that they’ve adjudicated.” There may be rules around certain drugs regarding formulary or prior authorization, such as the PBM can’t dispense in less-than-90-days fills, or there is step therapy in place for a competitor drug when the manufacturer’s drug must be the first drug to step through. The PBM will receive a 5% rebate if they meet the conditions. “Presumably manufacturers just do sample testing; they’re not looking at all plans and all of their formularies.” But to detect whether a rebate is given when patient assistance is provided for the same drug, a manufacturer’s audit would have to be “pretty thorough.”

“Copay maximizer programs are the most prevalent in commercial health plans, especially with respect to self-funded employers and union groups,” Dresser says. “While such programs may tout themselves as saving money, they come with added complexities and obfuscation, making it difficult to tell whether a plan is getting a deal at all. For example, the fee percentage charged by companies like SaveOnSP in the form of ‘shared savings’ may exceed the net cost of the drug that could have otherwise been attained when factoring in rebates. While PBMs still likely obtain rebates on these claims, they are not likely being passed on to plan sponsors, which further creates compliance concerns under the newly enacted Consolidated Appropriations Act of 2021 (which requires plan sponsors to report all rebates and fees earned on behalf of prescriptions dispensed to their beneficiaries).”

When asked if programs that classify drugs as NEHBs and deplete patient assistance are legal, Dae Lee, Pharm. D., senior counsel and pharmacist attorney in Frier Levitt’s life sciences department who co-chairs the firm’s plan sponsor practice group, replies that “alternate funding programs that are being manipulated and that do not result in reduced out-of-pocket cost of patients should be scrutinized. If such programs illegitimately classify drugs as non-essential health benefits to improve the PBMs’ or PBM-affiliated alternate funding programs’ revenue, those acts should be regulated by the lawmakers and be banned.”

Complaint Does Not Name Express Scripts as Defendant

Lee observes that “JNJ’s complaint did not name ESI as a defendant. Perhaps it’s because that JNJ will need to continue ‘working’ with ESI to ensure that JNJ’s drugs are listed in ESI’s formularies. Thus, while JNJ’s lawsuit may prompt manufacturers to rethink about alternate funding programs, they could be hesitant to bring lawsuits against alternate funding programs and the affiliated PBMs.”

The unidentified industry expert also points out that J&J did not sue Express Scripts. They say they wonder whether J&J’s lawyers will seek documents between SaveOnSP and Express Scripts. “If I’m an attorney for Express Scripts, I’m going to say that you can’t get Express Scripts documents because they’re not named” in the lawsuit.

Lee adds that “it is also worth noting that the United States District Court for the District of Columbia issued an opinion granting Summary Judgment to Pharmaceutical Research and Manufacturers of America (PhRMA) and setting aside the December 2020 Medicaid Best Price rule, on the grounds that the rule violated the Administrative Procedure Act. This decision recognizes the somewhat underhanded ‘scheme’ being employed by PBMs and copay accumulator and maximizer programs to siphon benefits intended for patients and fits within a string of other recent actions aimed at these programs such as JNJ’s lawsuit against SaveOnSP.

“Frier Levitt is closely monitoring the JNJ lawsuit,” he states.

Reagan also says that WTW is “following that really closely. We’re speaking with our PBMs frequently because they’re well aware of the litigation that’s going on….We’re continuing to monitor and advise our clients as changes may happen. We just don’t know yet. It’s part of the black box here.”

“I couldn’t make a prediction” on what the ultimate outcome of the case is going to be, says the unnamed source. They say it’s going to depend on a lot of factors, such as “how much the lawyers fight it, who the judge is, [and] if the court is backed up by COVID for three, four, five years.” A lot of federal and state courts are backed up for these periods of time and are focusing their attention on criminal cases. “But it could be that the judge sees the case, thinks it’s important and puts it on par with the criminal cases.”

Asked if drugmakers have any options for countering such companies, the unidentified industry expert says that the most aggressive way is what J&J is doing: filing a lawsuit. Other manufacturers may take the same approach, “but it wouldn’t surprise me” if manufacturers “wait, let J&J take the brunt” and see what the outcome is.

“There’s a vulnerability in suing, as there will be documents demanded by all parties,” the source points out. For example, J&J may have to disclose emails that contain drug pricing information, and some internal documents may show that “manufacturers are acting like greedy pigs.”

Manufacturers also may “keep people off patient assistance programs by adding levels of bureaucracy; they may throw up more roadblocks. The problem is…PBMs ultimately have control over manufacturers’ products….If they favor an alternate product, the manufacturer is cooked.…No manufacturer can afford to lose market share,” so to secure a favorable formulary position for their drugs, “manufacturers have to partner with” PBMs, they assert. “Leverage is against any manufacturer.…Manufacturers’ hands are somewhat tied.”

Feldman agrees. “If you have a great drug, even if it cures cancer, if it’s not on formulary, no one is getting that drug” unless the manufacturer gives it away for free.

However, these entities may take other steps to respond to these programs, says the unidentified source. Reducing costs for patients and plans “will inevitably cause manufacturers to just raise their list prices even more, since they can easily do so! And given that almost all these programs charge huge fees — most often a percentage of the savings — the manufacturers are likely to raise their prices, in the aggregate, more than the programs ‘save’ in the aggregate.”

Prior to these programs, if a manufacturer had a patient assistance program and helped with “a small number” of people who couldn’t access the drugs otherwise, most likely due to lack of insurance, “and the manufacturer thus gave away, say, $10 million worth of the drug, the manufacturer likely then raised the drug’s list price sufficiently to ‘cover’ that $10 million,” they offer as an example.

“But now, with these programs, not only is the manufacturer giving away that $10 million, but it may also be giving away another $100 million of the drug, e.g., through the SaveOnSP program. And of that total amount, SaveOnSP and ESI are keeping 25% of the ‘savings’ — or $25 million. As a result, when J&J raises its list price, it will try to do so to make up for the $110 million, even though $25 million of that amount was ‘taken out of the actual benefits provided’ and retained solely by SaveOnSP and ESI.”

“Is the entire system better off as a result?” they ask. “Definitely not, since a large portion of the amount was ‘taken out’ of the health care system entirely and was just third parties making a lot of money.

“And the dysfunction of the marketplace just continues to roll merrily along.”

For more information on the Zitter Insights data, contact Jill Brown Kettler at

Contact Dresser at, Feldman at, Lee at and Reagan via Ed Emerman at

© 2024 MMIT
Angela Maas

Angela Maas

Angela has an extensive background of editing, reporting and writing for trade and consumer publications. She has written Radar on Specialty Pharmacy since she joined AIS Health in 2005 and has broad knowledge of the various issues at play within the space. She also has written for Spotlight on Market Access since its 2017 launch. Before joining AIS Health, she was managing editor at Employee Benefit News and Employee Benefit News Canada and managing editor at Hem Aware (a hemophilia publication), Lupus Living and Momentum (a multiple sclerosis publication). She has a B.A. in English and an M.A. in British literature from Arizona State University.

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