People with a chronic illness who need to buy brand-name drugs may be able to save money on their meds thanks to the Centers for Medicare and Medicaid Services (CMS). The federal health agency issued a regulation that bans what are called co-pay accumulators from applying to brand-name drugs for which a generic version is unavailable.

This means that insurers and pharmacy benefit manufacturers (PBMs) can no longer prohibit co-pay assistance provided by drug companies from counting toward a patient’s cost-sharing requirements. According to a press release by The AIDS Institute, the ban on co-pay accumulators was included in the Health and Human Services Department’s 2020 Annual Notice of Benefit and Payment Parameters.

Before the ban, insurers and PBMs did not permit the co-pay assistance, such as coupons and discounts,  to count toward cost-sharing requirements. Not only did this increase the cost shouldered by the patient, but it also allowed insurance companies to collect on the money from the drug company meant for the patient.

“We are pleased that CMS is putting an end to these harmful and deceitful insurance company and PBM practices,” said Carl Schmid, deputy executive director of The AIDS Institute, in the press release. “People living with serious and chronic conditions, such as HIV and hepatitis C, depend on co-pay assistance to afford their drugs, particularly at a time when so many plans have high deductibles and charge high co-insurance.” 

The prohibition includes instances when patients must buy brand-name drugs because no generics exist or when they receive a brand-name med through a special appeals and exceptions process.

Of note, CMS indicated that if a state law allows the application of co-pay accumulators to brand-name drugs that do have generic versions, then insurers can use co-pay accumulators. Some states such as Virginia and West Virginia have already banned the practice for all drugs, whether or not a generic version is available.