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People who use drug coupon cards could be on the hook for higher costs this year. Photo: Jeffrey Greenberg / UIG via Getty Images

Consumers could soon face surprising increases in how much they have to pay for their prescription drugs, thanks to changes in the way health insurers and pharmacy benefit managers process coupons from drug manufacturers.

Why it matters: Midterm elections are coming up in the fall. High drug prices have enraged people across the political spectrum, and voters who already have trouble affording their prescriptions could be hit with another surprise.

How it works: Drug companies frequently offer coupon cards, commonly called "copay coupons," for patients who need their medicine. The consumers who use the coupons get a better deal, and the drug companies get a sales boost.

  • But studies show drug coupons raise costs across the board because they encourage people to get more expensive drugs even when cheaper options are available. Those costs filter through to insurance companies and policyholders.
  • Medicare prohibits copay coupons, essentially calling them kickbacks.

What's changing: Many companies that provide health insurance and drug coverage, notably UnitedHealthcare and Express Scripts, are instituting "copay accumulators" for this year.

  • Previously, when patients went to a pharmacy and used a copay coupon, the value of that coupon counted toward their deductible or out-of-pocket maximum. It's "a way to bridge people through their deductible so the employer or insurer pays," said Peter Bach, a researcher at the Memorial Sloan Kettering Cancer Center.
  • But now, with a copay accumulator, the coupon's value won't count toward patients' deductibles or out-of-pocket limits. Only true out-of-pocket payments will count.
  • What this means: Once patients use the full value of their drug coupons, they'll be on the hook for a lot more of the costs.

"In the short term, consumers are going to be potentially devastated by the sudden change in out-of-pocket spending," said Leemore Dafny, a health economist at Harvard who has studied the effects of drug copay coupons. "In the long term, it's a cost-control measure that is long overdue."

What we're hearing: Wall Street is nervous that copay accumulators will drive down sales for expensive drugs that treat chronic conditions, like AbbVie's blockbuster Humira.

  • "It is very likely that some patients will find this sudden increase in out-of-pocket costs unmanageable, leading to a reduction in volumes of specialty drugs," according to a January investor note from Credit Suisse's Vamil Divan.
  • Divan went on to say: "The fact that two of the leading health care insurance providers have initiated this restriction suggests to us that it could gain momentum as a major cost-containment measure."

The bottom line: Expect the health care industry to throw around the blame, while patients are caught in the middle again. Drug companies will say insurers and PBMs are restricting access to life-saving medicine, and insurers will blast big pharma for propping up sales with coupons that raise costs for everyone else.

  • "They'll point fingers at each other, and they'll both be right," Bach said.
  • "What's regrettable is it comes at the expense of patients who have a lot of chronic disease," Dafny said.

Go deeper

Rep. Sean Patrick Maloney elected chair of House Democrats' campaign arm

Rep. Sean Patrick Maloney. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Rep. Sean Patrick Maloney (D-N.Y.) on Thursday was elected chair of the Democratic Congressional Campaign Committee for the 2022 cycle, narrowly defeating Rep. Tony Cardenas (D-Calif.) 119 to 107, Politico reports.

Why it matters: Maloney will be tasked with protecting House Democrats' slim majority in 2022 after they underperformed in November's election, losing seats in down-ballot races across the country.

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Vaccine shipment companies targeted by cyberattacks, IBM says

Illustration: Sarah Grillo/Axios

A global phishing campaign has been trying to gain information from organizations working to ship coronavirus vaccines since September, IBM's cybersecurity arm said on Thursday.

Why it matters: Successfully distributing a COVID vaccine will already be challenging for the U.S. and other wealthy countries, especially to rural areas with less resources — while poorer countries are expected to have delayed access.

Fauci to meet with Biden transition for first time

Anthony Fauci. Photo: Win McNamee/Getty Images

The government's top infectious-disease expert Anthony Fauci will stay on at the National Institutes of Health and plans to meet virtually with President-elect Joe Biden's transition team for the first time Thursday to discuss the coronavirus response, he told CBS News.

Why it matters: Fauci, widely viewed as one of the country's most trusted voices on the coronavirus, said it will be the first "substantive" conversation between he and Biden's team. He said he has not yet spoken with Biden directly, but has connected several times with incoming White House Chief of Staff Ron Klain.

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