Every year, pharma companies spend billions of dollars on copay support programs to ensure patients can access critical therapies despite high insurance cost-sharing (co-pays and deductibles). However, in an environment dominated by copay maximizers and accumulators, pharma may be significantly overpaying for copay support.
What are copay maximizers and accumulators?
Pharma companies typically set a maximum limit for copay support for a product, often exceeding an individual patient’s out-of-pocket (OOP) costs. They set a high limit to cover a broad range of insurance plans and to ensure accessibility.
Copay maximizers and accumulators capture the maximum amount of copay assistance.
As an example, a pharma company provides up to $10,000 in copay support for a product. The patient’s OOP limit under their insurance plan is $4,000. Maximizers and accumulators ensure the full $10,000 is used, extracting the additional $6,000 instead of stopping at the $4,000 required by the patient’s plan.
What is the impact on pharma?
Accumulators and maximizers directly impact on a product’s Gross-to-Net (GTN) and resulting top and bottom-line performance. In some cases, significant portions of the business can become unprofitable. These programs also make it more difficult for pharma companies to forecast their copay liability and their product performance. Finally, they can bring operational challenges and complicate market access strategies.
What can pharma do?
Knowing is half the battle. Pharma companies need to recognize the impact of copay maximizers and accumulators and develop strategies to mitigate their effects. They can do this by (1) monitoring copay spending; (2) engaging with Payers / PBMs; and (3) optimizing their GTN strategy. Even small improvements (e.g., a 1–2% reduction in GTN spend) can yield tens of millions of dollars without raising prices or cutting costs.
The numbers are significant, and proactive management can safeguard both patient access and financial performance.
For more insights, reach out to Contact@GriffinBayAdvisors.com.