This assistance card from RxHope, a Triplefin company, can be used at 60,000 pharmacies nationwide. Credit: RxHope
Not too long ago, the mission of Patient Assistance Programs (PAPs) operated by biopharmaceutical companies was fairly straightforward: give free or reduced-cost branded medications to those patients who could not afford them. While the drug-specific eligibility criteria typically vary from program to program, eligibility has typically been based on a relatively small set of factors—primarily the patient’s income relative to the federal poverty limit (FPL), number of family members and a few others.
“A decade ago, patients who had insurance were generally able to afford their medications,” says Tracy Foster, president of Lash Group (Charlotte, NC), a unit of AmerisourceBergen Consulting Services. “Today, many factors impact medication affordability.” These include the stagnant economy, increasing drug costs, a growing market for expensive oral medications and extremely costly specialty, orphan or ultra-orphan drugs, the increased use of complex, multi-drug treatment regimens, an overall trend toward higher out-of-pocket expenses (such as higher insurance premiums, deductibles and coinsurance requirements) as employers shift more of their rising healthcare costs to their employees.
During each of the past four years, Lash Group has surveyed roughly 85 PAP administrators to track trends in the market. Roughly half of the PAPs surveyed have expanded the financial criteria of their programs, to help those whose financial needs have grown during these challenging economic times. Similarly, in 2012, 31% of PAP administrators reported an expansion of other eligibility criteria for free product assistance, so that they now include not only patients who have no insurance, but also those who may be “functionally uninsured” because their insurance does not cover medications, or creates high deductibles or cost shares compared to disposable income, says Foster.
“Our estimate is that nationally, the pharma industry spends $5 billion on PAPs,” says Edward Petrella, president of CareNet Foundation, a PAP-service firm in Cary, NC. “To that can be added some portion—we believe that it’s around 65–70%—of the $14 billion the industry spends annually on physician sampling.” Thus, the entire PAP support, from pharma, is almost $15 billion.
Meanwhile, as healthcare reform rolls forward, there is still considerable uncertainty about what the impact of the Affordable Care Act (ACA or “Obamacare”) will be on the entire healthcare arena, and on PAPs and related copay-relief initiatives specifically. ACA-driven healthcare reforms will—by definition—reduce the number of individuals who are technically “uninsured” (by forcing nearly 30 million uninsured Americans to join expanded Medicaid programs or state-level health insurance exchanges). However, at the same time, the ranks of underinsured Americans is expected to grow precipitously as the ACA is implemented, and this fundamental shift will have significant consequences for pharma companies, their third-party partners who administer their PAP programs, and disease-specific charitable foundations, in terms of how such programs are designed, implemented and funded.
“Many needy patients will literally be too ‘wealthy’ to qualify for Medicaid, but will be living too close to the bone to have adequate healthcare insurance, so even after ACA is implemented, many will still be struggling to afford their out-of-pocket drug expenses—especially those in drug classes for which there is no generic alternative,” says David Hileman, SVP and head of operations of Omnicare Specialty Care Group (Cincinnati, OH).
While the ACA represents a good advance in terms of the availability of primary, preventive and urgent care, “many questions remain about the benefit coverage for patients with chronic or catastrophic diseases, such as cancer,” says Sharon Roeder, CPC, director of patient assistance support for McKesson Specialty Health (The Woodlands, TX). For instance, “the government says that all health plans under ACA must provide some drug coverage and that’s an improvement, but individual patients only benefit if the medications they require are actually in their newly adopted plan’s drug formulary,” says Michael Schultz, R.Ph., VP and managing partner for VCG & Associates, Inc., a Quintiles Co. (Holliston, MA). Schultz is also managing partner of Foundation Care (Earth City, MO), a specialty pharmacy and charitable foundation that assists patients with rare respiratory diseases such as cystic fibrosis and others.
Decision tree for PAPs. Credit: IMS Health
“In response to today’s changing landscape, most drug manufacturers have begun to morph their PAP focus into a broader overall reimbursement and market-access strategy, to find many alternatives, ranging from free products to cost-offset mechanisms, to help financially needy patients gain access to therapy,” says Rick Randall, president, Triplefin (Cincinnati, OH).
“About a year ago, we saw a ‘false trend’ beginning to happen, as many in the healthcare arena were predicting that the PAP marketplace would fall away once the ACA was implemented,” says Kevin Cast, VP of strategy and contracting for United Biosource (UBC; Blue Bell, PA), an ExpressScripts Co. “But now the industry is recognizing that there will still be a pressing need for ongoing assistance to serve the underinsured population.”
Traditionally, Medicaid and Medicare patients have not been eligible for manufacturer-sponsored PAPs (because patients on government aid are technically insured, so they fail the first essential eligibility criteria for any PAP). Instead, such patients have tended to turn to charitable, disease-specific foundations to seek assistance in the form of free medications or related financial subsidies.
“As the number of patients enrolled in these government programs is expected to grow under the ACA, the net effect is likely to be an overall increase in the utilization of a copay-assistance program and reduced use of free drugs being administered from PAPs,” says Gordon Gochenauer, director of commercial development for Kantar Health (Horsham, PA). To meet the demand, manufacturers will likely need to consider increasing their funding and medication donations to 501(c)(3) charitable drug foundations.
With so much flux anticipated during the coming months (as Medicaid expansions and competing health insurance exchanges are worked out state by state), “PAP programs will continue to serve as a key resource, to educate and support needy patients who will need to understand how to access their new insurance options,” says Foster of Lash Group. And there is precedent here. “PAP programs served as a critical referral and education resource for needy Medicare beneficiaries during the implementation of Part D and the low-income subsidiary (LIS), so that experience is totally relevant today,” she adds.
How needy is needy?
As healthcare costs rise, pharma companies continue to expand the types of cost-offset mechanisms they offer, in addition to the free medications they give away through their PAPs. These include coupons to encourage new starts on a particular brand, copay assistance cards, and rebates and reimbursement coupons to cover insurance premiums. “For most of today’s brand manufacturers, the traditional PAP offering for free drugs is now just one component of a manufacturer’s broader, integrated market-access strategy,” adds Foster.
Advocates say that such financial-subsidy mechanisms for needy patients are particularly important when it comes to new product launches, whose utilization trajectory in the market is often adversely impacted by delays in coverage decisions by PBMs, health plans and government payers (which typically linger for 6 to 8 months, as payers seek to assess comparative-effectiveness data that can only come from expanded use of the therapy in the marketplace). Ultimately, the early adoption of new therapies will be influenced by their accessibility, and this is particularly critical in the early months when they have not yet been accepted to the majority of health plans and placed into various formularies.
“Copay assistance is basically a guerilla tactic that drugmakers have had to resort to, to get patients started on drugs as they enter the marketplace,” says Schultz of VCG & Associates. “Payers want to see some utilizaton but the only way to drive utilization is to offer some copay assistance, so while payers don’t like it, in a sense they have created their own nightmare.” Another objection, by payers, is that the financial assistance for a non-formulary drug cuts into the market share of competing brands, for which health plans sometimes receive rebates based on volume of prescriptions.
Using a hub model to bundle services
The most important evolution in the PAP arena, according to Gochenauer of Kantar Health, is the trend toward bundling the PAP program into a broader, drug-specific “hub.” Using a hub model, the brand team can provide patient and provider portals that not only ease access to any and all programs related to a given drug franchise, but also allow the drugmaker to provide a gamut of related support resources.
For instance, in addition to providing streamlined, online tools to ease PAP evaluation and enrollment, a hub-based portal may also provide access to educational materials, on-call skilled nurses and patient advocates, and support services to maintain adherence and compliance for the medication. Manufacturers who have agreed to Risk Evaluation and Mitigation Strategies (REMS) to gain FDA approval need feedback from prescribers and patients. “The ability to closely align and manage PAP and drug-specific REMS requirements can be especially useful in eliminating duplicative processes, particularly around distribution and data management,” says Gochenauer.
Just as important in today’s hub model is the provision of reimbursement-support services—such as verification of insurance benefits, research into payer policies, requirements and restrictions, assistance with prior authorization requirements and tracking, coding and billing support, and support for coverage denials and appeals. This type of high-touch support, which often includes research for alternative coverage options for medications and referrals to copay and co-insurance resources is growing in importance.
“The hub approach also lets the company take full advantage of the connection that is established once the patient has reached out to seek assistance, and this connection can then be used to help the patient to explore all reimbursement options, to improve medication adherence and overall wellness, and to improve patient outcomes, which can reduce long-term healthcare expenses,” notes Hileman of Omnicare.
“The ability to operate one smoothly functioning, consolidated hub to manage both the patient and payer experience with the brand can help drugmakers to work with one—rather than multiple—third-party vendors to implement all of these programs, which is key during this era of reduced funding for brand marketing,” says Randall of Triplefin.
A “patient access continuum” sets PAPs at launch (left), and (right) combines medical need, safety,
disease management and financial assistance in a suite of services. Credit: Kantar Health
Today, brand teams are leveraging technology advances and the ubiquity of computers and smartphones to develop more user-friendly patient-facing and physician-facing tools to streamline PAP administration. According to the Lash Group survey, in 2011 and 2012, 35% of the PAP administrators surveyed reported an increased focus on leveraging advanced technology to increase program access and efficiencies. Such technologies include:
Electronic document imaging to support paperless systems and processing
IVR (interactive voice response) and CTI (computer telephony integration) to streamline program communication channels and expand access beyond normal operating hours
E-prescribing to minimize manual review or processing of prescription submissions
Electronic checks related to insurance eligibility and income testing
“Today, it’s easier than ever for patients and physicians (and their staffers) to go online to enroll, and for physicians to satisfy their requirements using e-signatures, e-prescribing and so on,” says Hileman. “And technology tools give today’s practitioners greater visibility into the PAP status (in terms of enrollment and drug distribution), for their entire case load, which can be particularly useful for those physicians who are heavy users of a given PAP, given their specialization and patient population.”
However, some experts note that the full potential of these advanced technology solutions may never be fully realized because the particular patient demographic that tends to seek low- or no-cost drugs also tends to be characterized by lower socioeconomic status, less education, poorer overall health, larger number of complex health problems and co-morbidities, and limited access to computers. Brand-sponsored programs that aim to provide copay or co-insurance assistance are not equivalent to PAPs but are seen as close cousins. Such programs are designed to reduce or eliminate OOP differentials between the drug in question and generic alternatives and other branded drugs in the same therapeutic category that have more-favorable tier status on payer formularies.
CareNet Foundation is pioneering an alternative form of PAP that straddles the assistance manufacturers provide with what supports physician sampling programs. The Foundation sets up a system where patients enroll at CareNet, but receive drug products from a local pharmacy by taking the assistance card to the pharmacy. The process cuts significant paperwork from an assistance program, and more directly ties the sampling (which could have been recorded as a marketing expense) to patient assistance. CareNet is also setting up a mail-order option.
Copays and discounts
According to Shiraz Hason, senior principal, Managed Markets Services for IMS Health (Plymouth Meeting, PA), the use of copay and discount cards—“designed to remove the perception of high cost among both prescribers and patients”—has been growing by an estimated 30% each year for the past several years. And they no longer follow a one-size-fits-all model. For instance, according to Gochenauer of Kantar Health, a variety of copay card models have emerged, including:
Programs that pay a set amount up front for each prescription fill, up to a maximum for patients who meet income limits (Amgen “First Step program” for multiple brands is an example)
Programs that pay a small copay amount for all patients up to a low maximum, without income limit restrictions (Gleevec from Novartis)
Programs that pay a set percentage per refill after the patient has paid a certain amount out-of-pocket (OOP) up to a maximum for patients who meet income limits (Avastin from Genentech)
Programs that pay the patient’s OOP costs for diagnostics related to the drug (Gilenya from Novartis)
Programs that have a sliding scale of benefits (Promacta from GlaxoSmithKline)
While these cost-offset programs have obvious benefits for needy patients, the payer community objects to them, because they encourage physicians to ignore less costly formulary-driven options in favor of more costly branded therapies, because there is no perceived cost impact of doing so.
United Healthcare has taken a stand on these issues. Effective Jan 1, pharmacies in United Healthcare’s designated specialty-pharmacy network will no longer honor manufacturer-sponsored copay cards and co-insurance assistance coupons for six branded specialty drugs. “And some PBMs have begun blocking the drug distribution, rather than honoring copay/co-insurance assistance cards,” adds Randall of Triplefin.
“In some cases, health plans will actually counterattack PAPs and related copay-assistance programs from brand teams by shifting additional burden to patients and positioning the manufacturers as reinsurers,” says Gochenauer of Kantar Health. He and others agree that brand teams need to work harder to help plans understand that well-designed PAPs can have a positive impact on medication adherence, quality of care, improved patient outcomes and thus, overall cost savings in the long run.
“It’s also important for manufacturers to remember,” reminds Cast of UBC, “that while the use of copay cards and coupons has been growing over the past few years, questions remain about whether this type of financial assistance will be permitted for insurance plans sold through state exchanges. If exchange plans are considered government-funded, these types of financial assistance programs will not be allowed.” Guidance is expected from the Office of Inspector General in coming months.
While the ultimate landscape that will emerge as the ACA is put into place remains a mystery for all, “by this time next year things will look completely different and manufacturers need to get their heads out of the sand and be more active in preparing for the changes,” says Cast of UBC. “You cannot sit around and wait for actual guidelines to be published. As individual states continue to wrestle with whether or not to expand Medicaid, every needy patient will also be facing the uncertainty—yet they will still need their medications so they will continue to come to drug companies, looking for answers and for help.”
“Brand teams must continue modeling their PAPs and benchmarking against others to determine how they should evolve in the face of healthcare reform. Whenever possible, they should integrate health-outcomes research and their PAP strategy into the drug’s overall pricing strategy (because ultimately the cost of the giveaways must be built into the cost of the drugs), and use this strategic information during ongoing contracting and reimbursement negotiations with payers,” says Schultz of VCG & Associates.
“Moving forward, we can all assume that the expansion of government-related coverage under ACA will create more controls and limitations—even more so than we already see from private managed-care providers—so it’s up to brand teams to figure out ways to help bridge the gap,” says Randall of Triplefin. “Criticism from the payer community notwithstanding, through compassionate, strategic program design, the overall goal for any drug company is to help the patient get started on (and remain compliant with) the right therapy once they’ve been diagnosed, and to help them to reduce the emotional and financial burdens so that they can focus on treatment and improving outcomes.”