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You are here: Home / Articles / Walmart, Home Depot Adopt Health Insurer Tactic in Drug Copay Battle

Walmart, Home Depot Adopt Health Insurer Tactic in Drug Copay Battle

November 14, 2018 • By Caroline Humer and Michael Erman

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NEW YORK (Reuters)—Walmart and Home Depot, two of the top 10 U.S. employers, have embraced a health insurance strategy that punishes drugmakers for using discount cards to keep patients from switching or stopping their medications.

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Large U.S. companies have started tightly managing how employees and their family members use these popular discount, or copay, cards for everything from multiple sclerosis treatments to widely-used rheumatoid arthritis medications sold through a specialty pharmacy.

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The move reflects their frustration that the coupons, which lower patient out-of-pocket spending, can be a disincentive to seeking less expensive treatments and drive up health plan costs.

For certain therapies, the insurance programs extract more money from the drugmaker or redirect the employee to a cheaper medicine, according to benefits experts.

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Home Depot’s program, run by CVS Health, has a particular focus on therapies for cystic fibrosis, hepatitis C, cancer, HIV, psoriasis, pulmonary arterial hypertension and hyperlipidemia, according to health plan documents provided to Reuters.

The company, which has 400,000 employees, said the program affects fewer than 1 percent of its plan members.

Yet those participants can have an outsized impact on spending because of how costly it is to treat their conditions.

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Specialty drugs can account for more than half of a corporate health plan’s spending on medicines, according to benefits consultant Mercer.

Employers who use the most comprehensive program at CVS can save up to 7 percent on their total specialty medication costs, CVS told Reuters.

Express Scripts Holding Co, the largest U.S. manager of pharmacy benefits and the manager of Walmart’s program, has a similar broad-reaching program across specialty medications. But it also offers a more aggressive focus on hepatitis C, oral oncology drugs and hereditary angioedema treatments.

Concerned Drugmakers
The programs, known as copay “accumulators” and copay “maximizers,” are expected to expand in the next two years, from about 25 percent of U.S. employers to as much as 50 percent, according to the National Business Group on Health.

Drugmakers “are concerned about it because the bottom line is that it will cost them more money,” said Brian Marcotte, the group’s chief executive.

Drugmakers are worried about the hit to profits if many more employers sign on. They are also concerned because they cannot easily track when the programs are being used.

Eli Lilly & Co executives said last week that copay accumulator programs were having an impact on its Taltz psoriasis drug and Forteo for osteoporosis, but that it did not feel there was “significant exposure.”

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Filed Under: Pharma Co. News Tagged With: copay "maximizers", copay accumulators, copay cards, CVS Health, discount cards, Express Scripts Holding Co, health insurance strategy, Home Depot, Walmart

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