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3-Part Investigative Series on PBMs & Copay Accumulators

ABC 6 On Your Side, Columbus, Ohio

Investigative Reporter: Darrel Rowland

We sought a cause of death for HB 135. We found it ... and a whole lot more

When a bill designed to cut drug prices for many Ohioans won unanimous approval in the House last year, the bipartisan measure with 60 co-sponsors seemed a good bet to become law.

But House Bill 135 didn’t even get a hearing in the Senate until nearly eight months later. It quietly died in the Senate Health Committee shortly before the two-year legislative session expired at the end of 2022.

ABC 6 On Your Side conducted an autopsy on the mysterious death of a measure that was backed by dozens of groups, from the American Cancer Society to the Ohio State Medical Association to The AIDS Institute.

The verdict?

HB 135 did not die from natural causes.

But there’s more. During the investigation, ABC 6 discovered a new tactic that is redirecting millions of dollars meant to help patients pay for some of America’s most expensive prescription drugs. Instead, much of the money winds up in the coffers of the nation’s largest health-care corporations.

Battling her cancer - and her insurance company

To Julie Turner, a 47-year-old cancer survivor who has pushed for passage of legislation like HB 135 for years, the widely supported measure’s December demise was discouraging.

“It’s frustrating that an ordinary person has to go to extraordinary measures to help get a bill passed,” she told ABC 6.

The former school treasurer who lives in Vandalia, near Dayton, underwent harsh radiation and chemotherapy treatments decades ago at age 17 to ward off her stage 3 Hodgkin’s Disease. But now her bones are so brittle that she needs regular medication.

Because those treatments are so expensive, the drugmaker itself agreed to pick up part of the cost for Turner in recent years.

But there was a catch: Her insurance did not count that copay assistance toward her annual maximum payment, meaning she had to come up with that money herself.

“I was so upset when I learned that the $1,500 copay that I was getting help from the manufacturer didn’t count in my out-of-pocket that I knew I needed to take action,” Turner said.

She had run into a little-known practice by health insurance companies called a copay accumulator. Despite their obscurity, more than 80% of U.S. commercial health insurance plans contain them.

‘I want to hold my grandchildren’

They work like this: To help needy consumers pay copays (including deductibles or co-insurance) for expensive drugs, pharmaceutical manufacturers often provide financial aid. However, in recent years health insurers started shifting costs to their customers, unilaterally declaring that consumers could not count that drugmaker aid toward their share of the cost.

Essentially, that means the consumer who "maxes out" the insurance policy's ceiling on what they must pay actually doesn't benefit from the drugmaker’s aid. However, the insurer reaps both the drug company's copay grant and the patient's actual copay on future medical purchases.

House Bill 135 would have helped Ohioans afford drugs by requiring insurance companies to count all payments -- regardless of source -- toward a patient’s annual maximum, in effect banning copay accumulators.

Turner said she wants Ohio to join the 16 states that already have banned them, which especially impact people with rare and chronic diseases who need expensive specialty drugs.

The Buckeye State currently sits among numerous states given a “D” in an annual report by the nonprofit AIDS Institute on protecting citizens from PBM/insurers’ drug-pricing gambits.

But it’s more than reports and maps to Turner:

“I want another 47 years," she said. "I want to hold my grandchildren. I want to be active in the community. And if I don’t receive this medication that has shown to help me, then my days could be numbered.”

Health care affordability is regularly ranked among the most important issues facing America. A Gallup poll this year found that 38 percent of those in the U.S. say they or a family member put off medical treatment because of its cost, by far the highest percentage this century.

How obscure 'pharmacy benefit managers' defend the status quo

HB 135’s co-sponsor, Rep. Susan Manchester said Turner’s dilemma is far from unique.

“We have heard absolutely heart-breaking stories about people who have had negative consequences because of these policies," the Republican from northwest Ohio said. "There are patients who have decided to forego the full term of their medication because they don’t have the ability to afford it."

What legislators didn’t hear was much opposition to HB 135. While several individuals with serious health conditions and many from the 60-plus health and medical groups backing the bill testified, the only open opposition came from health insurers and drug-supply-chain middlemen known as pharmacy benefit managers, or PBMs.

Kelly O’Reilly, president and CEO of the Ohio Association of Health Plans, asked legislators: "If a drug manufacturer can afford to give out coupons for their product, why don’t they just lower the price of the drug?"

The reality, research shows, is that drug-pricing stems from a maze of interactions among pharmaceutical manufacturers, pharmacy benefit managers and health insurers.

Sean Stephenson, director of state affairs for the PBMs' trade association, blames drug manufacturers for offering aid "to commercially insured patients, regardless of their incomes, to induce patients to take a more expensive brand drug instead of an equally effective, less expensive, alternative with lower cost sharing.”

Connor Rose of that same group –- known as the Pharmaceutical Care Management Association –- made a key assertion in March 2021 testimony pushing to keep copay accumulators:

“In our assessment, eliminating this tool that is used by employers to contain costs will lead to an increase in overall cost for everybody in the plan," he said.

But that testimony had major holes.

For instance, he cited a 2016 study showing that drugmakers’ copay assistance raises prices on brand-name drugs with a generic equivalent.

However, HB 135 basically took that argument off the table; it exempted PBMs/insurers from the law when there is a generic equivalent. And the Harvard professor who led the study cited by Rose told ABC 6 the Ohio provision would “help constrain the price levels” on those drugs. In addition, research shows very few of these expensive specialty drugs have a generic equivalent anyway.

Rose cited two other studies with similar findings. But both were performed by a company commissioned by the PBM group itself.

The legislation’s other co-sponsor, then-Rep. Thomas West, challenged Rose to back up his claims.

“Do you have any evidence, clear evidence, that says this is actually going to raise premiums?” the Canton Democrat wanted to know.

Rose answered the way he did several other times when pushed for proof, repeating: “Again, I will find something for you all to answer your questions as best as possible.”

More than two years later, ABC 6 asked House Health Committee Chairman Scott Lipps what he ever heard from Rose after his multiple promises to back up his assertions with documentation.

“Not a word,” Lipps confirmed.

In contrast, a study released in May 2023 by The AIDS Institute showed no correlation between copay accumulator bans and increases in health insurance costs predicted by critics of the restrictions.

"We found no evidence that enacting a copay accumulator adjustment ban has a meaningful impact on average premiums," the report concluded.

"Copay accumulator adjustment policies put patients with chronic conditions in a tough position -– forcing them to choose between their health and other financial obligations," the institute said.

Business worries dismissed by Ohio chamber leader

Even so, several local business groups -– including those in Columbus, Cleveland, Toledo and Dayton – seized on the higher-costs claim anyway in a private letter questioning the bill. Health Committee Chairman Dr. Stephen Huffman provided a copy of the letter.

Columbus Chamber of Commerce CEO Don DePerro told ABC 6 that the groups agreed with the intent of HB 135, but wanted “continuing conversations” on the topic because of the unspecified financial concerns.

However, the chief of Ohio’s top business organization – former GOP Congressman Steve Stivers – dismissed such worries.

ABC 6 asked him: “Did you see anything in House Bill 135 that would have substantially harmed businesses?”

The president and CEO of the Ohio Chamber of Commerce replied: “I don’t think it necessarily harms businesses. There are some businesses it would help, and others it would hurt.”

The Ohio chamber, which remained neutral on the issue, said the local business groups may have acted purely on self-interest.

“We try to keep our policy positions focused on our membership of 8,000 people and what’s right for the state, as opposed to myopically just looking at our health-care plan,” Stivers said.

Why universities wanted an exemption from legislation to lower Ohioans’ drug costs

But the real kicker for supporters of HB 135 came when they discovered that the middleman pharmacy benefit managers – despite all their rhetoric about the evils of copay assistance from drugmakers – actually were using that very same assistance themselves to fatten their bottom lines.

That revelation stemmed from behind-the-scenes concerns about the bill from a surprising group: Large state universities.

It was a mystery why higher education would even care until it was discovered that major institutions such as Ohio State, Ohio University and others recently had switched health-care plans.

Suddenly their prescription drug costs went down and their employees purportedly were getting $0 copays for prescriptions.

How is that even possible?

Turns out that the PBMs –- despite their repeated rhetoric about the evils of financial assistance for patients from drugmakers –- actually are grabbing that same assistance themselves on a mass scale to bankroll entire health-insurance plans -– and swell their bottom lines.

That’s how the universities’ shiny new health plans are being funded: with money meant to go directly to help patients. And that’s why these colleges wanted an exemption from HB 135, because its enactment could have ruined their sweet new arrangement.

Daniel Pittman, senior director of communications at Ohio University, said the school "sought an amendment to HB 135 that would exempt state universities to help ensure its ability to continue to offer the program and help reduce costs for its employees."

The university and its employees enrolled in the "specialty medicine discount program" saved about $2.2 million in less than a year by reaping the redirected drug manufacturer aid, he said.

The potential threat to OU's setup was revealed during a regularly-scheduled meeting between Ohio University Human Resources and its Employers Health Coalition with the university's PBM, CVS Caremark.

"After the university became aware of HB 135, it independently began its due diligence to determine whether the bill would impact the university’s self-insured health plan," Pittman said.

Hypocrites 'R' Us?

Bill supporters were outraged when they discovered the PBMs’ duplicity. Critics viewed it as PBMs essentially saying it’s awful if a drugmaker gives copay assistance directly to a patient –- but it’s fine if the assistance goes straight to the PBM. Oh, and the PBM can take a substantial cut of the money intended to help patients.

“For the PBMs to say that we’re the ones driving up the cost, it just simply doesn’t hold out when we find out that they are actually using these cost-savings from pharmaceutical manufacturers for their own benefit,” Manchester said.

Does the GOP lawmaker view this as hypocrisy?

“Sounds like it,” she told ABC6.

Bottom line: Our autopsy indicates that the primary cause of death for HB 135 stemmed from opposition -- sometimes using suspect information -- from multibillion-dollar players in America’s drug supply chain, ones that are reaping enormous financial benefits from the current setup.

Ohio lawmakers will get another chance to consider Manchester's proposal. Her reintroduced version is now House Bill 177.

It hasn't been given a single hearing since its introduction May 22.

Billions meant to help Americans afford drugs being diverted to boost profits

You’ve probably heard it in those pervasive TV ads for expensive prescription drugs: If you need financial help, we can provide it.

But in the second part of the ABC 6 On Your Side web series on hidden reasons for high drug costs, we’ll show you why you may never see that aid.

That’s because little-known but powerful middlemen in the drug supply chain called pharmacy benefit managers and their partners are intercepting hundreds of millions of dollars that drugmakers had designated for needy patients – and making a handsome profit doing so.

The need for funds from pharmaceutical companies to afford their drugs is widespread.

“Whether you have a chronic illness or not, or you’re facing this directly or not, you probably have a family member somewhere who is,” said Stephanie Hengst, manager of policy and research for The AIDS Institute, a national nonprofit whose administrative offices are in Tampa.

“Or, who knows: Tomorrow you could get a diagnosis," she added. "And so, I think we all kind of have a stake in it.”

A July 2022 American Cancer Society survey of cancer patients and survivors found that 83% of those getting help from drug manufacturers say the financial assistance "enables them to get the medication they otherwise couldn’t afford.”

Health care affordability is regularly ranked among the most important issues facing America. A KFF poll showed that half of the adults in the U.S. say they or a family member put off medical treatment because of its cost.

Hengst told ABC 6 she knows countless people with serious ailments who rely on aid from drugmakers because they don’t have adequate insurance to pay for expensive specialty drugs often needed to treat a rare or chronic disease.

“Recently I was with a couple of hemophilia families, and one child who’s I think about 7 years old has severe hemophilia," she said. "And he has an average of about $600,000 per year for his medical costs.”

PBMs typically award themselves 25% in 'savings' from little-known drug-pricing tactic

But in the past few years, pharmacy benefit managers and their partners have diverted billions in drugmakers’ assistance intended for individual patients. Instead, they use the cash to set up their own health insurance programs for major employers – typically giving themselves a 25% share of the savings, court and other public documents show.

"The confiscation of these funds causes higher out-of-pocket obligations for the patient, which in turn causes patients to forgo care," said a study released in April by the Pioneer Institute in Public Policy Research, a Boston-based nonprofit. "Our estimate is that delayed or forgone care ... could increase annual health care cost by between $1.3 billion and $2.5 billion. "

Years ago, PBMs essentially were simply claims processors in the prescription drug supply chain. They've evolved into corporate conglomerates -- just three handle about 80% of all U.S. drug transactions, and each is associated with a Forbes Top 15 company -- that play a huge role in everything from whether your drug is covered by insurance to how much you will pay for your prescription.

The diversion tactic is so lucrative for PBMs that they can offer large corporations and public institutions -– typically with self-funded health insurance plans –- an entire health-coverage package with significant savings and low –-sometimes $0 – copays for employees.

And that 25% left over for PBMs is compounded because it's typically based on a drug’s list price -- which is inflated way beyond the actual cost of the medicine to a PBM or health insurer.

Don’t just take our word for it: Here’s part of a transcript from a PBM webinar -- now part of a federal lawsuit by a drugmaker unhappy with the PBMs’ tactics -- of a PBM executive describing how it works.

“The way that this program is set up is in order for us to capitalize on this copay assistance funding, we have to have that inflated copay up front to bill to copay assistance.”

That description of what’s dubbed a “copay maximizer” comes from Rachel Harmon, then a product director at the PBM Express Scripts -– part of America’s 13th-largest company, Cigna.

The webinar for an Illinois company from February 2021 explained the inner workings of a new health-care plan that promised $0 copays for many drugs and big savings for the self-insured employer.

Playing the leading role in the new setup: An obscure company named SaveOnSP, which works with the PBM Express Scripts.

How categorizing life-saving drugs as 'non-essential' is key to this maneuver

SaveOnSP performs “an extensive amount of work” behind the scenes researching drugmakers' aids programs, Harmon said.

All that effort goes to determine one key factor: Which programs have the most lucrative copay assistance programs to leverage the biggest payout to the company -- and PBM?

And now the radical step: Once those sources of the most generous drugmaker assistance are identified, the health plan eliminates employees’ insurance coverage for many of those particular drugs.

How can they do that?

By deeming them “non-essential” under the Affordable Care Act, sometimes dubbed Obamacare.

Here’s how Harmon explained it:

“This is a key differentiator for SaveOn," she said. "When you designate the drugs as non-essential, you remove the ceiling for how high you can set the member contribution.”

In other words, there is no longer any limit to the percentage of the cost that a patient must pay for, say, a cancer-fighting drug.

For 2023, the Affordable Care Act out-of-pocket limit is $9,100 for an individual and $18,200 for a family. But once SaveOnSP unilaterally declares those drugs “non-essential” (from an accounting, not medical, standpoint) the copay maximizer could require multiple times those amounts.

When Iona University signed up with Express Scripts and SaveOnSP, the New York school found that the “non-essential” drug category included medications treating hepatitis C, multiple sclerosis, psoriasis, inflammatory bowel disease, rheumatoid arthritis, cancer and many others.

Employees may panic when they realize they in effect don't have insurance coverage for needed medicines that are among the most expensive on the market. But under the twisted logic of this drug-pricing setup, an uninsured patient is viewed as a good thing.

That’s because now this theoretically “uninsured” or underinsured patient is more likely entitled to maximum financial help from the drugmaker -- and thus the PBM gets maximum profit.

The heart of it all: PBMs 'pay' for pricey prescription drugs – but don't use a dime of their own money

Once employees realize their dilemma and contact their health plan, they will get what Express Scripts describes as a “warm transfer” to SaveOnSP.

That PBM partner will either guide the employee through the process to obtain maximum assistance from the pharmaceutical company or complete the work itself.

But the employee never sees the money, since the drugmaker's aid goes straight to cover the maximized copay.

And this is how the PBM and its partner make big bucks: Their insurance plan just “paid” for a very expensive prescription drug – and didn’t use a dime of its own money.

Instead, it was the drug company’s money used to fulfill an obligation normally covered by a PBM/health insurance company.

The cash adds up quickly for the PBM. Harmon gave an example of the amount made from just one drug.

“(To get drugs to treat) Hepatis C, the average amount of assistance per fill is $6,600," she said. "We would literally set the patient copay to $6,600 and you would save that amount on every fill.

“The plan gets a maximum cost offset at the point of sale from that manufacturer assistance program.”

So that is $6,600 ... just for one drug ... for one patient ... in one plan.

SaveOn says it covers some 300 drugs in health plans across the country. The company regards the list as proprietary.

But even that’s not the end to maximizing profit. Once employees get funding for the specialty drugs they need, the prescription with the already-inflated price must go through Accredo Health Group – Express Scripts’ own specialty pharmacy.

Billions in patient aid from drugmakers kissed off as a mere PR stunt

Harmon was asked during the webinar how she justified diverting huge amounts in pharmaceutical manufacturers’ money intended for needy patients. She dismissed that aid as merely a PR stunt by PhRMA – and thus that money is there for the taking.

“We purely view these funds as marketing dollars,” she said. “So PhRMA puts, we estimate, roughly $15 billion in the industry of copay assistance programs today. And they do it under the guise of making drugs more affordable and accessible to the patients that need them.”

An Express Scripts spokesperson emailed this response when ABC 6 asked about the setup:

“The real issue here is that drug manufacturers continue to increase the price of medications, and then offer copay (assistance) that research shows inflate health care costs even more. We work with employers, government entities and other health plan sponsors to build custom pharmacy benefits that meet the unique needs of their members and reduce health care costs.”

ABC 6 On Your Side reached out to SaveOnSP multiple times for comment but the company did not reply.

The PBMs’ trade organization gave us a statement from Sean Stephenson, who covers Ohio for the group:

“Drug company (assistance is) a different deal because they steer patients to brand name, more expensive, drugs, and do not have any financial/income requirements. Drug companies just hand them out to people.”

Spokespersons for some of the state’s biggest universities whose workers are covered by plans with copay maximizers say they’re happy with the setup.

For example, even with a large percentage of the savings going to the PBM and its partner, Ohio University employees get $0 copays and saved $40,000 in just the first 10 months of the program. During the same period, the university saved $1.2 million.

Still, Hengst and other patient advocates say they see sweeping negative impact of the diverted copay assistance.

“There are a couple of patients that I know now that have needed MRIs or other surgeries and they canceled those surgeries,” she said.

Federal government puts PBMs in the crosshairs

Pharmacy benefit managers have been under the microscope for several years in state governments across the U.S. Ohio found that PBMs were charging three-to-six-times the going rate in the state Medicaid program, and last year set up its own state-supervised PBM to prevent what state officials said were repeated financial abuses.

Meanwhile, multiple congressional committees and the Federal Trade Commission are probing and pushing reform of PBM business practices.

For example, the House Oversight Committee concluded in May that "PBMs engage in self-benefitting, anticompetitive tactics which increase costs for consumers and harm patient care." But that's just one of seven bills under consideration in Washington.

In June, six U.S. senators -- three from each party -- rolled out the Patients Before Middlemen (PBM) Act to delink the compensation of PBMs from drug prices -- in theory removing an incentive for PBMs to push for higher list prices for drugs.

The Help Ensure Lower Patient (HELP) Copays Act -- introduced in April -- would forbid PBMs and insurers from using copay accumulator programs, which prevent a patient from counting copay assistance toward an insurance policy's out-of-pocket maximum.

The FTC has asked major PBMs to supply extensive materials on how they operate.

“Although many people have never heard of pharmacy benefit managers," Commission Chair Lina Khan said, "these powerful middlemen have enormous influence over the U.S. prescription drug system.”

Patients already paying price for PBMs diverting copay cash meant for needy

Shawna Landaker was worried about her husband, Doug.

The high-school sweethearts were happily settled with their two children in a bucolic new home on her family’s old farm near Waterford, about 20 miles up the Muskingum River from Marietta.

Doug was working 12 hours a day, seven days a week last year as a boilermaker helping to finish a power plant near Cambridge, about 80 miles east of Columbus.

But it wasn’t that crushing workload alone that caused her concern.

"I knew that he was out of medication because we got desperate," she said. "It was like, he doesn’t want to have a relapse and go back to the hospital."

Doug, now 44, has dealt with multiple sclerosis for over 15 years. MS is a potentially disabling disease of the brain and central nervous system believed to affect nearly a million Americans.

And why was he forced to go without medication for several months?

The answer involves one of the most significant yet almost unnoticed recent transformations in U.S. health care -- one that could make potentially life-saving drugs less available to millions of Americans.

Landaker got caught up in a mysterious health insurance plan involving SaveOnSP, which has offices in Buffalo, Denver and Vero Beach, Fla. That little-known company was brought in by Doug Landaker’s health plan’s pharmacy benefit manager, Express Scripts, part of the Fortune 15 company Cigna.

The primary lure? Promises of prescription drugs for a small copay – or none at all.

But you know the old saying about when something seems too good to be true ...

Longtime Columbus patients advocate Lisa Miller, who now works for Ohio State University’s Wexner Medical Center, warns that PBM promises don’t always pan out.

"They’re partnering with these saver programs that supposedly are saving the patients' cost," Miller said. "But it's not."

A study released in April by the nonprofit Pioneer Institute for Public Policy Research said patients may not be getting the full story:

"They are told that they can avoid huge out-of-pocket spending for their drug and obtain their prescription for free," the study said. "Yet what may not be clear to patients is that their deductible, coinsurance, and other out-of-pocket obligations are simply being applied to their use of other health-care services."

MS drug skyrockets from $150 to $3,990 for the same three-month prescription

The disconnect finally dawned on the Landakers when they received a jolting notice early last year about the medication Doug needed to treat his MS.

"At some point, and I don't remember if we got a letter or a phone call, but something happened to where we had been told that his copay was going to go from $150 for three months’ supply to $3,990 for a three-month supply," Shawna said. "And then it was like, 'Wait a minute, what's happening?'"

SaveOnSP offered only one way out of the huge price increase, the Landakers said: Call the company that makes the drug and get the copay assistance that pharmaceutical firms talk about in their TV ads.

Oh, and you also MUST tell us the most they’ll give you.

"I really didn't want to sign up for SaveOnSP but was left with no option when the copay was jacked up," Shawna said.

Turns out that Express Scripts and SaveOnSP are part of a national trend to use what are usually referred to as "copay maximizers." The latter company has developed a business model mining cash from the patients' assistance programs set up by most, if not all, the nation's major pharmaceutical companies to help the uninsured or underinsured afford expensive drugs.

The first step, as the Landakers learned, is finding out the top dollar those drugmakers will offer in financial assistance -- in other words, "maximizing" that copay aid. But instead of going straight to the patient as intended, much of it's typically used by SaveOnSP and Express Scripts to fund the PBM's own health-care plan -- and usually reap 25% of the savings.

Shawna, a state public defender, used her background as an attorney to piece together why SaveOnSP insisted it had to know the amount of copay assistance granted to her husband.

“I felt like what was actually happening was that our copay was jacked up,” she said, “basically in order for us to then get the copay assistance. And then the copay assistance would be funneled through us to SaveOnSP basically, and that SaveOnSP would get a cut of that copay assistance.”

Officially, patients aren't forced to use the new setup. But if they don't, they'll be forced to pay the list price of the drug -- out of the question for virtually anyone who needs treatment for a rare or chronic disease.

“That SaveOn SP letter, it said it was voluntary," Shawna said. "It's a voluntary program. Well, you know, it didn't feel real voluntary when they jacked up your copay to $3,990.”

What the company had to say

SaveOnSP did not respond to multiple attempts by ABC 6 On Your Side seeking comment.

An October 2021 white paper by the company said that by “'maximizing' these available funds, costs for employers, insurers, and patients are reduced.”

In a statement last year to Kaiser Health News, a SaveOnSP spokesperson explained its approach by saying employers don’t like drug companies “using their employees’ ongoing need for these drugs as an excuse to keep hiking the drugs’ prices.”

The SaveOnSP representative added that the company only “advises these employers on how to fight back against rising prices while getting employees the drugs they need at no cost to the employees.”

These drug-pricing tactics are part of a national trend

What happened to the Landakers is part of a national push to shove a larger and larger share of health-care costs onto patients and others by health insurers and drug-chain middleman PBMs – which due to ongoing industry consolidation are often part of the same company these days.

Adam Fein, who writes Drug Channels, one of the nation’s most-read blogs on drug pricing, said, “SaveonSP clearly exploits a loophole in the way manufacturers provide funds for patient support. Money that is designated to support underinsured patients or those with coinsurance are instead diverted to well-funded employer-sponsored plans.”

Fein said that as of 2022, 76% of commercial health-insurance plans contained copay maximizers, although 41% were actually in use.

He cited research showing "troubling health equity issues" when these plans are put in place. They "pose a disproportionate burden on historically marginalized populations and people of color. In other words, non-white patients appear to be disproportionately impacted by the loss of copay assistance."

Fein also advised more than three years ago: "Keep an eye on SaveonSP. It may look harmless, but seems highly questionable to me."

'I'll take my pill every other day'

Lisa Miller, who has battled to get financial help for patients the past 20 years, said the PBM setup sometimes tries to remove her and her health-care coworkers from the decision-making process for patients – just so they can make more money.

She pointed to the case of a Wexner cancer patient who was receiving both oral and infusion treatments. But only the oral meds were being run through the PBM program that generates high profits.

So the PBM did an end-run around the hospital team, attempting to get a signature directly from the patient’s doctor to switch the infusion treatments onto to medicine covered by the big-profit plan – even though everything already was working fine.

"The insurance company is making that decision, not us," Miller said. "And it's like, how do they have the right to just take that over like that?

"They're just taking it away from the patient and the patient making the decision on even where to get the medication."

Miller said it’s part of a pervasive problem.

Does that mean people in this day and age really have to choose between taking their medicines or eating or paying their rent or repairing the car?

"Absolutely, absolutely they do," she said." It's a daily decision for these patients. I have had patients that have said, 'I'll take my pill every other day,' just because they financially can't afford it."

A pivotal lawsuit in which each side condemns the other side's 'scheme'

The fate of whether the controversial copay maximizer tactics will continue may rest on the outcome of a ground-breaking federal lawsuit in New Jersey. In the litigation, pharmaceutical giant Johnson & Johnson accuses SaveOnSP of a “scheme to pilfer tens of millions of dollars” in money earmarked for J&J customers.

“Patient assistance does not exist so that SaveOnSP can enrich (health insurers) further while taking a cut itself,” says the lawsuit, filed by Johnson & Johnson Health Care systems.

With $100 million already drained by SaveOnSP from money J&J had set aside for direct patients assistance, that fund eventually will run dry – harming patients who then can no longer afford their medication, the lawsuit says.

SaveOnSP counters that J&J “uses this scheme to line its pockets at the expense of employers who sponsor the employee benefit plans that provide most Americans with their health care.”

In January, the judge rejected SaveOn’s motion to dismiss the widely watched suit and allowed other drug companies to file briefs in the case.

In a similar action, drug giant AbbVie sued a company called Payer Matrix in May, alleging it operates "a fraudulent and deceptive scheme to enrich itself by exploiting AbbVie’s (patients assistance program) through the enrollment of insured patients into a charitable program not intended for them." The 52-page federal suit says the practice "jeopardizes the sustainability of AbbVie’s program for those patients who truly need it."

The lawsuit came even after AbbVie changed its program's eligibility requirements in January to forbid Payer Matrix from participating. The Pennsylvania company disputes AbbVie's contentions in court.

While the copay maximizer gravy train may soon crash - through litigation or legislation -- drugmakers are fighting back.

"We're starting to see pharmaceutical companies come back and say, we're not helping patients," Miller said.

So it's the patients, not necessarily the PBMs, who are suffering from new cuts to and restrictions on patient aid.

For example:

  • Johnson & Johnson cut patient assistance from $20,000 to $6,000/year for Stelara & Tremfya, which treat psoriasis and other ailments.

  • Vertex Pharmaceuticals chopped its copay help for multiple cystic fibrosis medications from nearly $100,000 annually to $20,000.

  • In April, Bristol Myers Squibb – which makes such popular drugs as blood thinner Eliquis and lung cancer treatment Opdivo - stopped covering new patients enrolled in plans that “hide their insurance coverage to make the patient appear to be underinsured.”

  • Genentech, a subsidiary of Roche that sells cancer treatments such as Herceptin and Avastin, warned it would monitor PBM ploys “that undermine the intent of patient assistance programs.”

The battleground between pharmaceutical firms and PBMs constantly evolves.

Trade journal Biopharma Dive noted, "Manufacturers have recently started combating maximizers ... by reducing available copay assistance once a patient is identified as being in a maximizer plan. In turn, maximizers have become more aggressive in capturing as much of the copay offer benefit in the first few claims as possible, to guard against having to absorb the cost for more patients later in the year. "

It's like the old African proverb: When elephants fight, it is the grass that suffers.

And patients caught in the middle of this tussle don't have to ask who is playing the role of the grass.

'It just sounds like a scam'

Doug Landaker still remembers the day more than a decade-and-a-half ago he found out he was living with a serious disease:

"I was working at a power plant down in West Virginia called Mount Storm," he said. "And my arm just went numb one day, like tingly numb? I thought I pinched a nerve or something. Ended up going to the doctor and they're like, 'No, it's not a pinched nerve.' They did a bunch of testing and stuff and come back and said it’s MS."

Years later he struggles to overcome almost inexplicable health-care barriers to treating a disease that could disable him or even take his life.

“To me, it just sounds like a scam,” he said. “They're trying to suck the copay assistance out. That way they can suck their copay assistance out and there you go: They just pocketed all that money."



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