A Look at the Legal and Legislative Landscape Impacting Drug Costs for Patients

At the latest AMCP Nexus meeting, Kimberly Westrich, MA, chief strategy officer, National Pharmaceutical Council, and Adam Colborn, JD, associate vice president of Congressional Affairs, AMCP, discussed legislation and lawsuits at the state and federal level that could impact patients costs for drugs.

Colborn discussed legislation related to pharmacy benefit managers (PBMs), while Westrich discussed cost-shifting programs, such as co-pay accumulators and maximizers and alternative funding programs.

According to Colborn, while there is a lot of attention on PBMs at the federal level, the states are even more active. Federal lawmakers have introduced bills such as the PBM Accountability Act, the PBM Transparency Act, and even the Safe Step Act, which restricts the use of step edits in benefit designs.

“There is a lot that is, I think, highly dependent on the outcome of the election,” he said. “But I don’t know that I would necessarily say that anything is likely to pass. Legislative inertia is a pretty significant obstacle, regardless of the issue.”

The transparency space is one where he sees the most possibility for bipartisanship, but there is still disagreement on a partisan basis of how much the commercial market vs the public market can be regulated. Colborn noted Republicans may be more comfortable enacting legislation that affects Medicare, Medicaid, and the Veterans Health Administration, which are all government-run programs.

“I think there's a very real chance that something passes at some point,” he said. “I don't know that it's likely to happen this year. I think what we've been hearing is that an end-of-year health package is unlikely. But I would say transparency is a key part of that.”

As for the cost-sharing tools insurers are implementing that redirect financial assistance to help patients afford drugs, Westrich noted that there have been legal actions, given the “considerable ethical challenges” of these programs.

The Affordable Care Act didn’t address whether cost sharing by a third party had to count toward cost-sharing limits, so plans are classifying certain drugs as nonessential health benefits to exclude co-pay assistance from the calculations of a patient’s out-of-pocket costs, she explained.

At the federal level, co-pay accumulators have been subject to rulemaking and there has been a lawsuit. Initially, CMS took a narrow view that co-pay accumulators could only be used in certain situations, but the agency reversed course in 2021 and said plans were not required to apply manufacturer assistance toward beneficiaries’ annual cost sharing.

“This is pretty concerning for patients,” she said.

In response, a patient group filed a lawsuit, and the court sided with the patient group to restore the earlier, more narrow decision by CMS. However, HHS was not going to enforce action against plans until a new rule had been put out, which has not happened for roughly a year.

In addition, 21 states, the District of Columbia, and Puerto Rico all enacted laws addressing the use of co-pay accumulators, requiring that payments or discounts made by the patient or on behalf of the patient count toward the annual out-of-pocket cost sharing. Westrich added that other states have introduced similar legislation, which indicates this is a priority area for states, although the legislation has not been enacted yet.

“There's legal and rulemaking activity at the federal and state level directed at these ethically questionable programs that are misappropriating financial assistance that's intended for patients and redirecting it to third parties and intermediaries,” she said. “These cost-shifting programs are extracting value from medicines that's intended for patients, and it's at the expense of patients’ pocketbooks and health.”