Financial Assistance at a Cost

Drug manufacturers started widely offering copay assistance programs in the early 2000s to encourage the use of their drugs. From 2007 to 2017, the percentage of brand-name prescription spending that included a copay assistance coupon skyrocketed from 26 to 90 percent.

These programs are designed to address the patients’ prescription costs, which reached nearly $380 billion in 2021. Many people struggle to pay for their medications — more than two-thirds of patients fail to pick up their drugs once their out-of-pocket costs reach $250. As of 2023, an estimated 98 million prescriptions were left behind at the pharmacy counter, up six million from 2022.

While copay assistance programs help patients afford medications, they have also been shown to promote expensive brand-name treatments over cheaper generic alternatives. This is why, under the federal anti-kickback law, it’s illegal for pharmaceutical companies to offer Medicare and Medicaid beneficiaries copay assistance coupons. California and Massachusetts also ban copay coupons for brand-name drugs when there is a generic option, although research suggests that most copay coupons for expensive brand-name medications do not stop patients from buying generic drugs.

A study published last year suggests that copay coupons also increase spending on brand-name drugs without a generic equivalent. Specifically, researchers found that these coupons raise prices for multiple sclerosis drugs by 8 percent, resulting in just under $1 billion in additional spending annually. Additionally, copay assistance significantly increases drug sales by 21 to 23 percent among commercially insured individuals compared to beneficiaries of Medicare Advantage, the privatized version of Medicare.

“Physicians are going to be more willing to prescribe a high-cost drug or administer a high-cost drug if they can direct their patient to a copay assistance program,” said David Howard, a faculty member at Emory University who writes about copay assistance programs.

These profits have led Big Pharma to lobby extensively for copay assistance programs. From 2022 to 2023, the Pharmaceutical Research and Manufacturers of America, the trade group for the pharmaceutical industry, spent $55.4 million on issues including lobbying related to “patient assistance program policy issues,” according to lobbying records.

For years, these programs counted toward patients’ out-of-pocket spending, meaning once the programs’ maximum benefit ran out, insurers would usually cover the rest of these drugs’ copays. But that started changing in 2018, and two years later, Trump’s Department of Health and Human Services published a rule explicitly allowing insurers to stop applying copay assistance toward patients’ annual deductibles and out-of-pocket maximums.

Now, nearly one in five large employer-sponsored health plans and a third of employers with five thousand workers or more do not count copay assistance toward patients’ annual deductibles and out-of-pocket maximums, meaning millions of patients using these programs still have to pay thousands each year for their drugs.

This is regardless of the fact that some copay assistance programs specifically state that copay funds “must be applied” to “patient’s out-of-pocket costs (co-pay, deductible, or co-insurance and annual out-of-pocket maximum).”

Some states have taken matters into their own hands. Currently, twenty-one states have enacted laws requiring insurers to apply copay assistance funds to patients’ annual out-of-pocket requirements.

The insurance industry trade group America’s Health Insurance Plans has lobbied against many of these state efforts. In Colorado, for example, the group spent nearly $237,000 in 2023 to lobby on issues including Senate Bill 195, which went into effect on January 1, 2025 and now requires that all copay assistance funds go toward Colorado patients’ deductibles and out-of-pocket maximums.

Many people, including insurance company representatives, aren’t aware of these state laws. When a Colorado-based Lever editor called his insurer, UnitedHealthcare, to confirm that copay assistance programs would now be legally required to be counted toward patients’ out-of-pocket spending, a manager responded, “I don’t believe that.”

Amid increasing scrutiny and pushback, the number of health insurers lobbying at the federal level to discourage bans on their double dipping has dropped significantly from 42 percent in 2022 to 21 percent in 2023, according to a survey by a pharmaceutical market analysis company. That same survey found that the number of patients covered by commercial plans that don’t count copay assistance toward their out-of-pocket spending has also dropped. Still, insurers are making considerable profits from this practice.

Insurers and pharmacy benefit managers are making “billions and billions of dollars” from drugmakers through copay assistance, Carl Schmid from the HIV+Hepatitis Policy Institute claimed. And patients typically don’t know that they could be left with a massive bill until after their copay assistance runs out, Schmid added.

“Even if [copay assistance programs] drive higher drug prices,” he said, “is that a reason to let these insurers double the bill and collect more money?”

“I Couldn’t Believe It”

Schmid has been fighting to stop insurers from abusing copay assistance programs for years and led the federal litigation on the matter.

In the 2022 lawsuit against the Department of Health and Human Services, the HIV+Hepatitis Policy Institute and other plaintiffs argued that insurance company’s copay accumulator programs in part violated the Affordable Care Act. According to the law, once a beneficiary’s annual out-of-pocket costs are reached, the insurer would be responsible for covering the individual’s remaining medical bills that year.

However, the Department of Health and Human Services argued that the Affordable Care Act allowed insurers to exclude copay assistance funds from patients’ out-of-pocket requirements.

“The federal government fought us the whole time,” Schmid said. “I couldn’t believe it.”

In the end, the court sided with the patient advocates, striking down the 2020 rule and stating that insurers must now adhere to an earlier federal rule that says copay assistance programs must be counted toward a patient’s annual out-of-pocket requirement for any drug without a “medically appropriate generic equivalent.” That includes many expensive specialty drugs for chronic health conditions.

In November 2023, about a month after the ruling, the Department of Health and Human Services appealed the court decision.

“By siding against patients who depend on prescription drugs and with insurers, they are allowing insurers to ‘double bill’ and extract more money from patients and drug manufacturers by implementing copay accumulators,” Schmid said in a statement. “The court’s decision is very clear: Copay assistance for prescription drugs without a generic equivalent must now count for patients.”

In a motion filed after the court decision, the Department of Health and Human Services stated they intend “to address, through rulemaking, the issues left open by the [District Court’s] opinion,” including whether copay assistance programs qualify as out-of-pocket costs under the Affordable Care Act and should therefore be counted toward patients’ deductibles and out-of-pocket maximums. However, the department noted it “does not intend to take any enforcement action and issues or plans based on their treatment of such manufacturer assistance” until new rules are issued.

Lawmakers from across the aisle requested the agency to drop their appeal, and last January, the Department of Health and Human Services did so. However, since then the agency has offered no update on potential rulemaking on the matter.

Meanwhile, insurers have found other ways to milk copay assistance programs. For example, health insurers have been known to increase patients’ drug copay requirements to ensure they obtain the maximum amount offered by copay assistance programs — all while not counting this money toward a patient’s annual deductible or out-of-pocket maximums.

Patients Stuck in the Middle

While Schmid and others continue pressing the federal government to count copay assistance programs toward patients’ out-of-pocket costs, as initially intended, patients like Heather Bryan are left with a seemingly never-ending pile of medical bills.

Her illness, Erdheim-Chester disease, causes the body to make too many of a specific type of white blood cells, which then build up in different parts of the body and cause swelling, pain, and organ problems. In Bryan’s case, the excessive white blood cells are in her brain, leading to an array of symptoms like memory issues, dizziness, trouble walking, and slurred speech. Before these symptoms started, the Bryans lived a relatively normal life.

“We love to host people. I’m a pastor, too, so we have people in our lives all the time and in our home all the time,” said Blue, Heather’s husband. “In the last year, we’ve really had to cut back on that because she physically can’t do it.”

This January, the family filed a grievance with Anthem Blue Cross Blue Shield of Kentucky over the fact that Heather’s copay assistance for Cotellic wasn’t counted toward her out-of-pocket requirements. The company has yet to respond.

Anthem Blue Cross Blue Shield of Kentucky did not respond to multiple requests for comment.

Recently, Bryan was prescribed another expensive drug, for which she obtained a copay assistance program that fully covered her out-of-pocket costs. This time, she is hoping her insurer won’t end up sticking her with additional bills.

Meanwhile, millions of other patients who’ve been promised assistance with their expensive medications are being left in the middle of a battle between health insurers and pharmaceutical manufacturers.

Patients with chronic health conditions are “the most vulnerable people out there,” said George Huntley of the Diabetes Leadership Council. “The fact that they’re being taken advantage of by insurance companies . . . is sickening.”