Patients may start to pay more out-of-pocket for medications

Kaiser Health News reported on a federal rule going into effect in 2021 that reduces the helpfulness of drug coupons from manufacturers. Even the background on this issue is complex: the pharmaceutical industry has evolved into a state where drug manufacturers charge high prices, but then offer large coupons to help individual patients offset the cost. The rationale for this arrangement is not entirely straightforward, but it is believed that it has a lot to do with the incentives of pharmacy benefit managers who act as purchasing intermediaries and some to do with helping the pharmaceutical industry be perceived more favorably by the public. The policy question that the federal rule addresses is: in terms of deductibles and copayments, which price of the drugs should be used: before the coupons are applied or the amount that patients actually paid?

Counting the price of the drugs before the coupons helps the patients in that they very quickly meet their deductibles (and perhaps some out-of-pocket maximums), and insurance would more quickly start to pay. However, the idea behind insurance plan health design is that having patients shoulder more of their own healthcare costs will make them savvier consumers who will seek out better value (e.g. more earnestly explore alternatives), saving the overall system more money. To allow patients to skip the pain of deductibles and copayments would essentially short-circuit the principles behind many plan designs. Complicating this is that patients will be transitioning from the status quo, which allows them to apply the pre-coupon dollar figure (more favorable to them) to potentially a less favorable arrangement if their payers so choose. Also complicating this change is that drug prices have been rising very quickly in the past decade.