A federal judge struck down a controversial rule that requires drug companies to include copay assistance like coupons into Medicaid rebates, handing the pharmaceutical industry a major win.
The ruling, delivered Tuesday in the U.S. District Court for the District of Columbia, deals a major blow to insurers and pharmacy benefit managers (PBMs) that have adopted copay accumulator programs that limit the impact of drugmaker assistance from counting toward the deductible and out-of-pocket caps, arguing that the assistance is meant to drive patients to more expensive drugs.
The ruling focuses on a Centers for Medicare & Medicaid Services rule finalized in December 2020 under the Trump administration. The regulation, which goes into effect next year, said that any copay assistance like coupons or other cost-sharing help must be included in the calculation of the best price of the drug.
Drug companies agree to offer rebates to Medicaid to get their products covered by the program. The rebate must be 23.1% of the average sales price of a brand-name drug and 13% for a generic.
But how that average sales price is calculated has caused a major stir among payers and PBMs.
Insurers and PBMs charge that the drug manufacturers rely on coupons and other assistance to steer patients toward more expensive and unnecessary drugs as opposed to more affordable options, according to the PBM industry group Pharmacy Care Management Association (PCMA).
“Since the use of copay coupons reduces the utilization of more affordable medication options, overall prescription drug costs will continue to increase dramatically,” PCMA said on its website.
But the pharmaceutical industry counters the assistance is vital to ensure financial assistance for patients who may not afford certain products.
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