Non-Essential Health Benefits and Copay Maximizers

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Brief Summary: This lawsuit challenges how a third-party company called SaveonSP is partnering with health plans to run copay maximizer programs, and how this partnership interferes with Johnson & Johnson’s contractual agreement with patients who use their copay assistance program.

Overview: When patients cannot afford their medications, they may rely on financial assistance from pharmaceutical manufacturers and other third parties to meet their commercial health plan’s cost-sharing responsibilities and fill their prescriptions. The value of this financial assistance typically counts towards the health plan’s deductible or maximum out-of-pocket limit unless the health plan has implemented a copay accumulator program. Copay accumulator programs exclude the value of financial assistance distributed by third parties from counting toward the health plan’s deductible or maximum out-of-pocket limit. These programs may force patients to switch or stop taking their treatment because they cannot afford their out-of-pocket costs once their financial assistance has been exhausted.

Copay maximizer programs are a more complex version of copay accumulators. Under a copay maximizer program, the health plan determines the copay based on the maximum amount of copay assistance that a patient could receive. Once the health plan determines the maximum amount of copay assistance available annually, it divides that amount by 12 to determine the monthly patient copay. For example, if the maximum amount of annual copay assistance is $12,000, then the patient copay is at least $1,000 per month. Like copay accumulator programs, the plan will accept the maximum amount of copay assistance for the medication but will not count this financial assistance towards meeting the patient’s deductible or annual out-of-pocket limits.

SaveOnSP is a third-party company that partners with health plans and PBMs to provide plan enrollees with their specialty medications. When a health plan agrees to partner with SaveOnSP, patients are told they must enroll in SaveOnSP’s special program to receive their specialty drugs at a lower cost. However, the program operates as a copay maximizer for patients who enroll. At the same time, those who do not wish to enroll are responsible for a 30 percent coinsurance payment that will not count towards their deductible or annual out-of-pocket limit. SaveOnSP justifies excluding both the manufacturer copay assistance and the patient’s contribution from counting toward the deductible and annual out-of-pocket limit by arguing that these medications are non-essential health benefits (non-EHBs) under the Patient Protection and Affordable Care Act (ACA). Thus, SaveOnSP asserts that it is not required to count copay assistance or the patient’s provided contributions towards meeting the individual’s deductible or annual out of pocket limit.

Court Updates: On May 4, 2022, Johnson & Johnson filed a complaint in the United States District Court of New Jersey suing SaveOnSP for its copay maximizer program. Johnson & Johnson is requesting damages from SaveOnSP and asking the Court to prohibit SaveOnSP from continuing its maximizer program for Johnson & Johnson’s/Janssen’s drugs.

In its complaint, Johnson & Johnson alleges that the SaveOnSP program interferes with the contractual relationship between Johnson & Johnson and the patients to whom it provides copay assistance. Specifically, Johnson & Johnson argues that its patient assistance program prohibits patients from enrolling in any other assistance program, and that SaveOnSP interferes with this agreement by essentially forcing patients to enroll in the SaveOnSP program. Read the full complaint here.

Current Status: SaveonSP now has 21 days to file an answer in response to Johnson & Johnson’s complaint.

Impact: If a Court finds that the SaveonSP’s program interferes with the contract between Johnson & Johnson and patients, then the Court will grant an injunction that would prohibit SaveOnSP’s program from applying to Janssen drugs. Further, to the extent other manufacturer patient assistance programs do not contain contractual prohibitions similar to those used by Johnson & Johnson, they will likely implement them. Therefore, the SaveOnSP program will likely be unable to continue as currently structured. For patients, a judgment favorable to Johnson & Johnson would mean that patients would no longer be required to enroll in these programs to receive their specialty medications.

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