Charles Becker (Staff Attorney, Office of Health Care Advocate (HCA)) testified before the Senate Health & Welfare Committee on Thursday morning about S.98, an act relating to GMCB authority over prescription drug costs. He specifically addressed Copay Accumulator Adjustment Programs, considering them to be a problem in need of a solution. He believes at least part of the problem is that we have a system based on hidden discounts and rebates that incentivizes high drug list prices.

Becker believes that giving the Green Mountain Care Board (GMCB) authority to conduct affordability reviews and set upper payment limits is one policy idea, which HCA supports. The greatest concern is for patients with the most expensive medications treating chronic conditions. Many of those patients use drug manufacturer copay assistance cards, which are often referred to as drug coupons. When these assistance cards are presented at the pharmacy counter, the drug manufacturer pays money on the patient’s behalf to the pharmacy and, in some cases, the patient’s copay is reduced to nothing. Although controversial, and not an ideal system, patients need access to drug manufacturer copay assistance.

Becker continued to explain that copay accumulator is how a health plan keeps track of the costs that a member pays through co-insurances, and copayments, until the member meets their deductible and out-of-pocket maximum. He further explained that a “Copay Accumulator Adjustment” is when a heath plan adjusts out (or subtracts) the value of drug manufacturer copay assistance. He showed a graphical representation as an example of a hypothetical patient that resulted in what the patient ultimately had to pay and the insurers obligation being reduced. He further opined the best-case scenario that would benefit the patient.

He then discussed how accumulator adjustments harm patients by exposing vulnerable patients to large, and sometimes unexpected, costs because they are people with chronic conditions and rare diseases. He also noted that research shows that low-income people and people of color are more apt to use copay assistance. Sometimes such letters to folks explaining their plan may look like junk mail and some people may not even open the letter. They are then surprised when they go to the pharmacy and have to pay the full list price for their prescription. He also pointed out that most copay assistance is for brand name drugs without a generic equivalent. This may result in the patient abandoning their treatment, leading to costlier intervention and lower quality of life.

Becker concluded that one of the purposes of the HCA was to protect people with pre-existing health conditions and copay accumulators undermine those protections. Vermont is not one of 19 states that have acted to affirmatively ban copay accumulator adjustment programs, as of 2023. The current statutory language is from Act 131, which states that “any amount paid by a covered person….shall be attributed to any deductible….and to the extent consistent with federal law, any out-of-pocket maximums.” He expressed concern about how our laws may be interpreted by courts or regulators.

He closed stating that HCA encourages the Committee amend S.98 to include an explicit copay accumulator adjustment ban. They think that doing so would give Vermonters, and specifically Vermonters with chronic illness, some tangible relief now, and not relief years down the road. He shared proposed language that would amend two sections of the Vermont statutes.