What is a Copay Accumulator?
Copay accumulators are a feature of pharmacy benefit plans that are designed to help insurers save money on prescription drug costs. They are intended to redirect funds that pharma companies contribute to patient assistance programs from patients to payers and discourage patients from filling high-cost medications if a lower-cost alternative is available.
Many pharma companies operate patient assistance programs (PAPs), also known as copay offset programs, to help patients afford high-cost brand-name medications by covering the patient’s share of costs. These copayment offset or assistance programs—often referred to as copay cards or coupons—are typically available to individuals with commercial insurance and are designed to pay for out-of-pocket expenses like copays, coinsurance, or deductibles for a specific medication.
However, it’s important to note that these programs generally cannot be used by patients enrolled in government healthcare programs such as Medicare Part D. Instead, they focus on assisting commercially insured patients who might otherwise struggle to afford their prescriptions.
Some payers have launched Copay Accumulator programs to counteract the effect of PAPs.
Without a Copay Accumulator program, the pharma company’s PAP payments would offset the patient’s annual pharmacy deductible or out-of-pocket maximum. Once the patient’s share of pharmacy costs exceeds the deductible or out-of-pocket maximum, the payer is responsible for all remaining pharmacy costs.
A Copay Accumulator program limits the amount of money that a payer contributes to pharmacy benefit costs. The pharma company’s PAP payments do not count toward the patient’s pharmacy deductible or out-of-pocket maximum. And once the PAP funds are exhausted, the patient is responsible for the full cost of the therapy, and it is only at that point that patient spending contributes to the deductible or out-of-pocket maximum.
Who benefits from copay accumulators?
This shift can have a significant financial impact on patients. For example, under a copay accumulator, the manufacturer’s contribution increases while the payer’s expense decreases. Instead of the patient’s out-of-pocket costs being reduced to zero by pharma assistance, patients may find themselves responsible for thousands of dollars—potentially up to the full deductible, coinsurance, and out-of-pocket maximum—once copay assistance runs out. In practice, this means that while payers benefit from reduced expenses, patients—who are supposed to be the payers’ customers—may end up shouldering a much larger financial burden.
Do Copay Accumulators Apply to All Drugs?
Typically, they apply to:
- High-cost specialty medications
- Branded drugs with significant manufacturer copay support
- Non-preferred formulary products
Generic drugs are usually not affected.
Are there exceptions or state restrictions?
While most commercial insurance plans use copay accumulators for expensive brand-name medications, not every plan or state treats them the same way. For example, Arkansas has passed restrictions on copay accumulator programs. Under Arkansas Code Title 23, Chapter 79, Subchapter 21, insurers are required to count any cost-sharing amounts paid by the patient—or on the patient’s behalf—when calculating a patient’s out-of-pocket contribution. This means that, in Arkansas, payments made via manufacturer copay cards or assistance programs must count toward the patient’s deductible or out-of-pocket maximum for state-regulated commercial plans, public employee plans, and the Medicaid expansion program (ARHOME).
There are some exceptions in these laws: the rule may not apply if a name-brand drug is prescribed but is not considered medically necessary by the prescriber, or if there is a medically appropriate generic equivalent available.
In summary, while copay accumulators are widely used for certain high-cost drugs, state laws like those in Arkansas may limit their application and offer added protection for some patients.
