By: Ben DruckThe US healthcare system has been facing great uncertainty, with ongoing challenges to the sustainability of the Affordable Care Act and converging industry pressures on pharmaceutical drug pricing. At Prescient Healthcare Group, our healthcare experts are closely monitoring developments in managed care and health policy, and have observed three key trends influencing the US market access landscape in 2018.

Copay Accumulators: The payer defense against copay cards

Payers have long opposed manufacturer-sponsored copay cards, arguing such programs incentivize patients to prefer high-cost branded drugs over generic alternatives. Accordingly, payers have begun to implement “copay accumulator programs”, which dictate that amounts covered by copay cards do not count toward patients’ annual deductible. Manufacturers have already begun to respond through the PhRMA lobby group’s “Let’s Talk About Cost”1 advertising campaign. They contend that beneficiaries are largely unaware of the financial risk posed by copay accumulator programs, citing misleading program names such as UnitedHealthcare’s “Benefit Plan Protection” and Express Scripts’ “Out of Pocket Protection”. Manufacturers will be closely monitoring any impact on treatment adherence among patients who max out their annual copay card limit in efforts to further challenge accumulator programs.

Point-of-sale Rebates: Passing drug rebates directly to drug consumers

In the current drug pricing and delivery system in the US, pharmacy benefit managers (PBMs) negotiate with manufacturers for price relief on prescription drugs, typically in the form of rebates. A portion of these rebates is passed on to third-party payers while an undisclosed amount is retained by the PBM to support profitability and reduce member premiums. Dr. Adam Fein of Drug Channels Institute succinctly describes the perversion of this system as “reverse insurance”, in which the rebates generated from sick patients’ prescription drugs serve to subsidize member premiums, rather than traditional insurance where healthy beneficiaries’ premiums fund sick patients’ treatment costs. The lack of public transparency into actual drug pricing – net of negotiated rebates – therefore appears to reduce overall premiums, but exaggerates patients’ co-insurance liability and inflates Medicare fees paid to Part D sponsors.

The Department of Health and Human Services is working to address this issue by pressuring payers to recognize the value of rebates at the point of sale (POS). POS rebates will enable Medicare to more accurately calculate drug costs and ensure that cost savings are passed directly to the patient. CMS recently proposed changes for Medicare Advantage and Part D and solicited feedback on “policy approaches for applying some manufacturer rebates and all pharmacy price concessions to the price of a drug at the point of sale”.2 The efforts are gaining significant traction among payers, as UnitedHealthcare and Aetna both announced in March 2018 that their respective plans will automatically apply pharmacy discounts and rebates at the time of sale for fully insured commercial members. Although the downstream impact on monthly premiums is yet to be realized, the shift has been well received among policymakers and represents a positive step toward price transparency.

Payer Vertical Integration: The decline of the standalone PBM?

The PBM business is highly concentrated among three organizations, CVS Health, Express Scripts and OptumRx, which manage more than 70% of annual prescriptions in the US. OptumRx is owned by the insurer UnitedHealthcare, while CVS and Express Scripts have recently announced acquisition agreements with Aetna and Cigna, respectively. The CVS-Aetna and Express Scripts-Cigna deals have not been finalized and may face legal hurdles, but the overwhelming industry trend is to shift away from standalone pharmacy benefit management toward a more integrated model.

Among the resulting benefits to insurers, the large-scale vertical integration of health plans and PBMs will enable greater payer leverage in drug contracting negotiations. In addition, the vertical integration may improve overall care management through an alignment of cost-saving objectives across medical and pharmacy spending, as PBMs would no longer be incentivized to focus solely on pharmacy spend. Finally, the mergers in this space represent an opportunity for insurers to provide direct ‘retail healthcare’ through outlets such as CVS’ MinuteClinics or primary care clinics established by large employers such as Walmart.

A key risk for Cigna and Aetna lies in their respective PBMs’ ability to retain share of covered lives. The recent acquisitions mark the end of the large standalone PBM, but may pave the way for a modernized PBM model or new market entrants like Amazon.


  1. “Let’s Talk About Cost” Campaign. (accessed April 6, 2018).
  2. Centers for Medicare & Medicaid Services. “CMS Proposes Policy Changes and Updates for Medicare Advantage and the Prescription Drug Benefit Program for Contract Year 2019.” (accessed April 6, 2018).