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Feds drop appeal in drug copay assistance case

The federal government has dropped its appeal of a court decision that could affect health insurance companies' use of copay accumulator programs. 

The Justice Department on Tuesday withdrew its appeal of a September ruling by the U.S. District Court for the District of Columbia in favor of three patients and three patient advocacy groups.

At issue in the case is the use of copay assistance programs or coupons, frequently offered by drug manufacturers to help patients pay for brand-name medications. In August 2022, the HIV+Hepatitis Policy Institute, Diabetes Leadership Council and Diabetes Patient Advocacy Coalition filed a lawsuit against the Health and Human Services Department and Centers for Medicare and Medicaid Services.

The groups sought to challenge the 2021 Notice of Benefits and Payment Parameters rule issued by CMS, which allowed health insurers to use so-called copay accumulator and maximizer programs to prevent copay assistance from counting against deductibles or out-of-pocket limits. The groups argued the rule violated the Affordable Care Act.

In the September decision, Judge John D. Bates of the D.C. federal court vacated the 2021 rule. Last month, he made a second ruling that the 2020 Notice of Benefits and Payment Parameters rule was again in effect, after the government filed a motion to clarify. The 2020 rule requires copay assistance to count as patient cost-sharing for prescription drugs, except for brand drugs with generics.HHS, in its motion to clarify, said it intended to enact another rule about whether patients' financial assistance offered by drug manufacturers qualifies as cost sharing under the Affordable Care Act. It also said, pending the rule, that it does not intend to take enforcement action against carriers based on how they treat the financial assistance.

CMS published the 2020 rule as states were beginning to ban copay accumulator programs on the individual market. As of June 2023, 19 states had enacted laws prohibiting insurers and pharmacy benefit managers from using copay accumulator programs, according to a report by healthcare consultancy Avalere. These laws apply to state-regulated health plans, including on the individual, fully insured large-group and small-group markets, the report said. 

The insurance trade group AHIP and the Pharmaceutical Care Management Association, which represents PBMs, did not return requests for comment.

Patient advocacy groups, which have been outspoken about the merits of copay assistance for patients to afford their medications, cheered the Justice Department’s move to withdraw the appeal. 

“Now that the government has dropped its appeal, we hope this is a signal they will accept and enforce the court ruling and issue guidance stating that copay assistance, in most instances, must count for patients,” George Huntley, CEO of Diabetes Leadership Council and Diabetes Patient Advocacy Coalition, said in a news release.




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