Medical Debt Soars, Despite 340B Purchases Passing $100 Billion

By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy

Drug purchases under the 340B Drug Pricing Program exceeded $100 billion for the first time in 2025—an increase from 2024 of 22.8%—according to the Health Resources and Services Administration (HRSA), with hospitals accounting for a combined $83,936,162,423 (83.9%) across all hospital types (HRSA, 2026). Yet despite this program’s explosive growth and its inherent promise to expand access to care and treatment for low-income patients, medical debt in the United States now tops $220 billion (Macsata, 2025). Could this be the true reason why patient advocates increasingly find themselves aligned with drug manufacturers on the need to rein in and reform the 340B Program?

Photo Source: ADAP Advocacy | YouTube

Among hospital covered entities (CEs), Disproportionate Share Hospitals (DSHs)—hospitals that serve low-income patients and receive payments from the Centers for Medicare & Medicaid Services (CMS) to cover the costs of providing care to uninsured patients—accounted for $79,235,079,126 (79.2%). Yet despite this influx of cash, nearly two-thirds of adults who carry past-due medical bills owe money directly to hospitals (Macsata, 2025).

By comparison, all Ryan White HIV/AIDS Program (RWHAP) CEs combined accounted for just $3,092,689,404 (3.1%) of all 340B Program drug purchases. State AIDS Drug Assistance Programs (ADAPs) are widely regarded as the Gold Standard among these CEs, and most have operated under a rebate model for decades.

On the heels of HRSA’s new data release, Patients Rising—a national patient advocacy and education group based in Washington, DC—released a report in which they examined over 900 bankruptcy filings across six states (Colorado, Louisiana, Maine, Virginia, Washington, and Wisconsin) and found that 45% of filings listed verified 340B hospitals as creditors, totaling $6.62 million in debt. In some filings, debt accrued at a single 340B hospital accounted for as much as 98% of the household’s total debt. In that specific example, the household's monthly income was just $1,800, while the total debt from Christus Highland was $386,758 (Patients Rising, 2026).

Upon seeing these data, Dr. Adam J. Fein, President of Drug Channels Institute, argues that, due to the unwieldy, undermanaged, and largely unregulated nature of the 340B Program, reform may, in fact, never occur (Fein, 2026).

Dr. Fein argues that this monstrous growth in 340B drug purchases has reached a compound annual growth rate of ~22% per year over the last 15 years (Figure 1), while manufacturer sales have grown by just 7.3%, making 340B the single largest source of manufacturer discounts in the U.S.

Figure 1 – 340B Drug Program Prices: Purchases by Covered Entities, 2010 to 2025

 

Photo Source: Drug Channels Institute

While Dr. Fein does show that pharmaceutical list prices have also grown exponentially, he points to peer-reviewed research that used price-volume-mix decomposition to examine the relative importance of list prices vs. drug utilization (i.e., the number of pills, capsules, syringes, etc. purchased and distributed) to determine whether price increases or utilization were driving the growth of the 340B Program. Zeng et al. found that utilization accounted for an average of 79.6% of 340B growth based on list price, and nearly 100% of growth based on 340B drug prices (Zeng et al., 2025).

Similar to Dr. Fein, ADAP Advocacy has recently argued that CMS, rather than HRSA, should assume control of the 340B Program, in no small part because it has significant regulatory and enforcement staffing resources on hand to administer a program the size of 340B.

But while Dr. Fein’s concern is that Congress will not adequately take up the mantle of reform in the face of the program's enormity, ADAP Advocacy believes it is imperative that they do so. Since March 2025, we've argued that the program is now too big to fail.

In our recent policy paper, "340B Program: The Glue That Should Hold Our Healthcare System Together", we argue that Congress should reform the 340B program to implement a system-wide rebate model (similar to those currently working for state ADAPs), as well as mandating wholly transparent reporting, clearly defining who qualifies as a “patient” eligible to receive 340B discounted drugs, and establishing compliance and enforcement standards that require all covered entities to open disclose how much in rebates they receive and how those revenues are spent in alignment with both the letter and the spirit of the 340B statute.

Photo Source: ADAP Advocacy

ADAP Advocacy stands firmly in our conviction that the 340B Program must be fundamentally reformed. To be clear, no one side—save for patients in need of care—is faultless in allowing this program to spin wildly out of control. There is culpability to go around; but only one side—drug manufacturers—is required to provide discounted prices and rebate revenues to covered entities, and it is far easier for pundits, politicians, and even patients to paint pharmaceutical companies as the bad guys for drug pricing while holding hospitals and other covered entities blameless.

Disclaimer: All funders of the ADAP Advocacy Association are publicly listed on our website. 

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association; rather, they provide a neutral platform for the author to promote open, honest discussion of public health-related issues and updates.

References:

[1] ADAP Advocacy. (2026, July 27). ADAP Advocacy Calls for CMS to Oversee 340B Drug Pricing Program. Washington, DC: ADAP Advocacy. Press Room. https://www.adapadvocacy.org/s/2026_ADAP_Press_340B_Oversight_CMS_072726.pdf

[2] Fein, A. J. (2026, July 15). The 340B Program Hit $100 Billion in 2025: Has It Become Too Big to Reform? Philadelphia, PA: Drug Channels Institute: Drug Channels. https://www.drugchannels.net/2026/07/the-340b-program-hit-100-billion-in.html

[3] Health Resources and Services Administration. (2026, July). 2025 340B Covered Entity Purchases. Rockville, MD: United States Department of Health and Human Services: Health Resources and Services Administration: Office of Pharmacy Affairs: 340B Drug Pricing Program: Program Updates. https://www.hrsa.gov/opa/updates/2025-340b-covered-entity-purchases

[4] Macsata, B. M., Laws, J., Hopkins, M. J. & Sosa, J. (2025, April). Patient Medical Debt: Findings from Quantitative Patient Survey in the United States. Washington, DC: ADAP Advocacy. https://static1.squarespace.com/static/698f8fa09fc8884466a1becd/t/69d85991b19c033c07b2a52b/1775786385556/2025_ADAP_Project_RW_340B_Asset_17_Medical_Debt_Survey_Report_04-23-25.pdf 

[5] Macsata, B. M., Anthony, G., Hopkins, M. J., & Sosa, J. (2026, July 08). 340B Program: The Glue That Should Hold Our Healthcare System Together. Washington, DC: ADAP Advocacy: Policy Center: 340B: Policy Papers. https://www.adapadvocacy.org/s/2026_ADAP_Project_RW_340B_Asset_32_340B_Glue_Should_Hold_Healthcare_Together_061526.pdf

[6] Patients Rising. (2026, July). Medical Bankruptcy in the United States. Washington, DC: Patients Rising. https://6015202.fs1.hubspotusercontent-na1.net/hubfs/6015202/01-PatientsRising-u4m/Research%20Papers/Medical-Bankruptcy-in-America-and-340B_6-State-Analysis-White%20Paper-email..pdf

[7] Zeng, S., Sarraille, W., & Martin, R. (2025, May 21). What is driving 340B growth: utilization or price? Health Affairs Scholar, 3(6), qxaf104. https://doi.org/10.1093/haschl/qxaf104

Alternative Funding Programs for Prescription Drugs Are Putting Patient Lives at Risk

By: Ranier Simons, ADAP Blog Guest Contributor

As part of ADAP Advocacy’s continued spotlight on the dangers of counterfeit prescription drugs, it is worthwhile to elevate a recent expose aired by CBNC. Two weeks ago, CBNC aired an investigative deep dive into the predatory practices of some alternative funding programs (AFPs) that illegally import medications to sell to insurance plans and patients. The expose was entitled, "How Soaring U.S. Drug Prices Fueled What Feds Call An Illegal Import Of Medications." The 30-minute documentary effectively presents how patients are pawns sandwiched between the law and entities that knowingly break it for profit. AFPs are putting patient lives in danger.

Photo Source: Alliance for Patient Access

It is worth noting that U.S. drug prices are not soaring, despite the claim in the documentary's title. According to the Drug Channels Institute, inflation-adjusted U.S. brand-name drug prices fell for the seventh consecutive year. In its annual examination of drug prices and trends, Drug Channels Institute’s President, Dr. Adam Fein, summarized, “For 2024, average brand-name drugs’ list prices grew by only 2.3%. What’s more, after adjusting for overall inflation, brand-name drug net prices dropped for an unprecedented seventh consecutive year.” The real issue is the overall unaffordability of healthcare services and the push to control costs.

Alternative funding programs are companies that promise employers and patients access to prescription medications at a low cost. Typically, AFPs operate by exploiting patients to utilize manufacturer drug assistance programs to obtain medications (NASTAD, n.d.). In the case of the CBNC expose, the AFPs subject to investigation are providing prescription drugs through illegal importation. In the documentary, Lori Mayall, who oversees anti-counterfeiting and product security at Gilead Sciences, states, “Every time you are taking a foreign medicine that has been delivered from overseas, you’re playing a game of Russian roulette.”

AFPs target vulnerable populations. The typical client of AFPs is small private employers, city and county governments, school districts, and unions. These entities have limited budgets and are thus desperate to find ways to save money. The documentary highlighted that the AFPs who promise the most outrageous bargains on prescription drugs are the ones who illegally import. Employers carve out coverage for high-cost prescription drugs and require patients they cover to use AFPs to obtain the medications. While some patients are aware that the medications they are receiving are sourced outside the United States, many are not. In most cases, the employers are aware, but they are not educated on the real dangers of importing the medications in terms of drug safety. Moreover, they are not educated about the illegality of importation.

CNBC's Melissa Lee candidly interviewed representatives from several AFPs. Overall, they all painted themselves as being altruistic by providing a public service to people. They described their actions as saving employers money while giving patients access to expensive medications they would otherwise not be able to obtain. The representatives complained that prescription drugs are much cheaper overseas, thus Americans should have access to those lower prices. They feel they are enabling Americans to exercise their rights.

AFPs incorrectly argue that their importation activities are legal under FDA guidelines. However, Leigh Verbois, the former director of the Office of Drug Security Integrity and Response at the FDA, stated on camera, “What AFPs are doing is importing misbranded and unapproved foreign drugs, which is illegal.” AFPs claim they are legal and operate under the FDA’s personal importation policy. Verbois noted this is incorrect. She explains that the importation policy is particular and limited: “If a drug is not approved or available clinically in the United States, an individual can obtain a product from a foreign source, assert they are importing that product for themselves, and then bring that product under a limited supply of 90 days into the United States.”

Photo Source: KFF News

This is not how AFPs operate. AFPs buy drugs that are approved and commercially available in the United States from foreign entities at lower prices, then distribute them to U.S. patients. Notwithstanding the illegality of the operation, AFPs are not honest in their sourcing. They claim to source only medications from reputable tier-one sources such as the United Kingdom, Canada, and Australia. However, the investigation revealed that drugs are actually also coming from places such as India, Turkey, Germany, and New Zealand. 

The foreign entities distributing these medications are not licensed to practice pharmacy anywhere in the U.S., and almost all have no assets or staff here. Should they make a mistake and harm a patient, there is no way to hold them responsible. Should they decide to cut corners and dispense subtherapeutic or counterfeit medication, they cannot have their license suspended, be brought into court in the U.S., or be forced to compensate the patients they harmed.  The medicines they dispense are not part of the U.S. track-and-trace system, so there isn’t even a way to authenticate them. Sometimes, they also break the law in their own country by exporting critical medicines meant for domestic patients.  These are not legitimate healthcare providers that patients should depend on for their lives.

Most importantly, many AFPs do not purchase foreign medications and instead distribute them to patients. In some cases, foreign suppliers and pharmacies ship medications directly to patients. This enables the drug shipments to avoid law enforcement and customs and enter the country under the radar. Thus, it makes it almost impossible to tell how many drugs are entering the country illegally.

This was part of the way Gilead Sciences was alerted, and it subsequently filed a lawsuit to prohibit the importation of foreign versions of its medications sold in the United States. A patient whose prescription drug plan was serviced by an AFP was sent a bottle of the HIV antiviral Biktarvy from Turkey, complete with labelling written in Turkish. The investigation found that, according to the Office of the U.S. Trade Representative, Turkey is one of the world’s largest suppliers of counterfeit medications. The operators of AFPs not only fail to effectively screen their sourcing but also lack the means to do so. Mayall also stated, “You don’t know how that product was stored, handled, or distributed.” She added, "and it travels through an illegal supply chain that’s easily infiltrated with counterfeits.”

Unfortunately, patients subject to utilizing AFPs who engage in foreign importation have no choice. Their employers tell them that if they do not use the AFP, they will have to pay the list price out of pocket for the medications they need. The patients who are uncomfortable with and aware of the foreign sourcing of their medications must risk their lives just to obtain their medications.

Photo Source: Partnership for Safe Medicines

Unfortunately, bad actors continue to flourish. Shabbir Safdar, Executive Director of The Partnership for Safe Medicines, revealed in the documentary that his organization discovered over $5 million in illegally imported medicines over a two-year period. CNBC’s Lee even explained that the U.S. House Appropriations Committee is so concerned about illegal drug importation that it asked the FDA to produce a comprehensive report on how to strengthen oversight. No matter how inexpensive, any drug is expensive when the price of taking it is the risk to one’s health. Continuing to raise awareness of the pervasiveness of AFPs, educating patients and employers about the dangers of obtaining foreign medications, and encouraging policy oversight are among the most effective ways to protect patients' well-being so they are not treated as pawns for profit.

[1] Fein, Ph.D, Adam. (2025, January 7). Inflation-Adjusted U.S. Brand-Name Drug Prices Fell for the Seventh Consecutive Year as a New Era of Drug Pricing Dawns. Drug Channels Institute. https://www.drugchannels.net/2025/01/inflation-adjusted-us-brand-name-drug.html

[2] NASTAD. (n.d.). Alternative Funding Programs. Retrieved from https://nastad.org/sites/default/files/2025-07/resource-afp-issue-brief-2025.pdf

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.    

Courts Put Guardrails on 340B Program, Aiding Reform Efforts to Ebb Abuse

By: Ranier Simons, ADAP Blog Guest Contributor

Since 1992, the 340B Drug Pricing Program has enabled eligible health care providers, referred to as covered entities, “to stretch scarce federal resources to reach more eligible patients or provide more comprehensive services.”[1] One of the most notable characteristics of the program is that it is not funded by the government. Since it requires drug manufacturers to sell medications to eligible entities at steep discounts, in essence, it is a legally mandated reallocation of financial resources from private industry to providers. As such, abuses of the program are especially egregious. The vast growth of the 340B Program over time has led to increased abuses in it as big hospital systems and mega service providers sought to enhance their profits over serving vulnerable patient populations. A tug-of-war among varied interests has generated many legal challenges in attempts at 340B reform. Recently, the pharmaceutical industry has achieved wins in its favor.

Photo Source: PharmaLive | Biospace

In May of this year, D.C. Circuit Court of Appeals ruled in favor of Novartis and United Therapeutics. Both companies separately sued the Health Resources and Services Administration (HRSA), which is the federal agency charged with overseeing the program. HRSA sent oversight enforcement letters stating the pharmaceutical manufacturers were in violation of the 340B statute because they imposed new restrictions on covered entities and limited their number of contract pharmacies.[2] The manufacturers had issued conditions on the usage of contract pharmacies 340B qualified entities utilized to purchase drugs they sold. Some of the conditions included requiring covered entities with in-house pharmacies to use those pharmacies to dispense 340B drugs and limiting entities without in-house pharmacies to only one contract pharmacy.[2]

HRSA claimed that the 340B statute allowed covered entities to utilize an unlimited number of contract pharmacies; thus, drug manufacturers were mandated to ship 340B drugs to wherever entities wanted. They issued enforcement letters threatening civil monetary penalties due to non-compliance.[2] The D.C. Circuit consolidated both companies' cases and ruled that the 340B statute did not explicitly forbid manufacturers from imposing conditions on the distribution of covered drugs to covered entities.[2] Additionally, the court quashed HRSA’s enforcement letters, stating that they were arbitrary and capricious under the Administrative Procedure Act (APA).[2] Thus, the manufacturers can continue to impose conditions.

Pharmaceutical companies have instituted conditions on contract pharmacies as one way to fight against abuses of the 340B program. Mounting evidence has demonstrated too many bad actors are taking advantage of the program, increasing profit instead of using the proceeds to benefit patients. Some hospitals have purchased 340B drugs and then sold them at full price or more to affluent, fully insured patients as well as uninsured patients.[3] This harms uninsured and vulnerable populations, cutting access when they cannot afford the pricing instead of helping those the program was meant to help. Another abuse is entities prescribing higher-cost medications when effective lower-cost drugs are available for the sole purpose of maximizing profit from the 340B discount spread.[4] Abuses like these are possible because the law in its present state does not specify drug discounts remain reserved only for those who are needy.[3] This is why manufacturers are trying to limit distribution to entities and pharmacies directly benefiting needy patients.

Photo Source: Fierce Healthcare

There is fierce opposition to the growing chorus calling for reforms to the 340B Program, that is actually anti-reform. Those fighting against 340B reform posit that those in support of 340B reform are attempting to gut the program and save themselves money by reducing the number of drugs they are discounting. The reality is the anti-reform movement is more concerned over what is seemingly an unlimited ATM with few strings attached, if any. For example, the American Hospital Association wrote a letter against H.R. 8574, the 340B Affording Care for Communities and Ensuring a Strong Safety-net (340B ACCESS) Act.[5] The act does several things, including creating updated eligibility requirements ensuring that authentic safety-net providers serving needy, underserved populations are the only entities benefiting from the program. It also establishes that federal grantees and their contract pharmacies must provide affordability assistance policies that ensure patients are not denied access to 340B medicines based on their ability to pay.[6]

The well-resourced forces who are against 340B reform are against it because reform prevents them from utilizing the 340B Program revenues as cash flows to expand services, acquire practices, and engage in other ventures that are not focused on safety-net population medical care. In June of this year, a study conducted as a combined effort of Appalachian Learning Initiative, ADAP Advocacy, and Community Access National Network highlights how large organizations use 340B funds.[7] The full text of the report can be found, here. 

One of the most notable findings involves CEO compensation. The study examined data on the entities studied, showing changes in activity before and after obtaining 340B eligibility. It was found that executive compensation increased by an average of 231.51%, and the provision of charity care as a percentage of annual hospital revenues decreased by 14.79%.[7] Additionally, they found that the overall yearly revenues of the entities studied increased by an average of 824.32%.[7] This would indicate that as revenues increased, the level of spending on charity care decreased. Charity care is not the only avenue available to covered entities to support their poor and underserved populations. However, if the purpose of the 340B program is to generate revenues to help those in need, one would expect to see an increase in charity care.

Photo Source: Drug Channels Institute | iStock Photos

The recent court ruling by the D.C. Court of Appeals, and other ones, is finally putting some guardrails on the 340B Program, which has ballooned to a record $66.3 billion in 2023.[8] In his recent analysis of the program’s growth, Dr. Adam J. Fein with the Drug Channels Institute summarized, “Lobbyists claim that manufacturers’ 340B contract pharmacy changes are 'stripping billions of dollars from the healthcare safety net.' But every year, the data tell a very different story. Only in the U.S. healthcare system can billions more in payments and spreads be considered a cut.”[8]

Whether it's using 340B eligibility to expand into financially prosperous communities for profit, structuring operations to maintain the bare minimum share of low-income patients required for 340B qualification, or other questionable actions, there is a demonstrated need for 340B reform.[9] The recent wins in the name of 340B reform achieved by pharmaceutical companies are steps in the right direction. Nevertheless, it is imperative that ongoing reform efforts reach a harmonious balance of weeding out bad actors, stabilizing the finances of covered entities acting in the best interests of their patient populations, and ensuring that pharmaceutical companies can continue to contribute without worrying about adverse effects to their operational finances.

[1] Health Resources & Services Administration. (2021). 340B drug pricing program. Retrieved from https://www.hrsa.gov/opa/index.html

[2] Grimm, D., Hethcoat, G., Trunk, S. (2024, June 27). The 340B ‘Saga’ Continued: HRSA, States, and Drug Manufacturers Contest 340B Contract Pharmacy Restrictions in Court. Retrieved from https://www.jdsupra.com/legalnews/the-340b-saga-continued-hrsa-states-and-9025687/

[3] Center for Medicine in the Public Interest. (2022, September 12). New Report Demonstrates How Hospitals, Pharmacies & PBMs Exploit the Federal 340B Drug Program to the Harm of Disadvantaged Patients

[4] Pitts, P., Popovian, R. (2022, September). 340B and the Warped Rhetoric of Healthcare Compassion. Retrieved from https://www.fdli.org/2022/09/340b-and-the-warped-rhetoric-of-healthcare-compassion/

[5] Hughes, S. (2024, July 26). AHA Comments Opposing the 340B ACCESS Act (H.R. 8574). Retrieved from https://www.aha.org/lettercomment/2024-07-26-aha-comments-opposing-340b-access-act-hr-8574

[6] ASAP340B. (2024, May 28). ASAP 340B Applauds Introduction of the 340B ACCESS Act. Retrieved from  https://www.asap340b.org/post/asap-340b-applauds-introduction-of-the-340b-access-act

[7] Hopkins, M. J., Macsata, B. M., & Laws, J. (2024, July). The 340B Drug Rebate Program and its potential impacts on annual revenues, executive compensation, and charity care provision in eligible covered entities. Nags Head, NC: ADAP Advocacy.

[8] Fein, Ph.D, Adam J. (2024, October 22) The 340B Program Reached $66 Billion in 2023—Up 23% vs. 2022: Analyzing the Numbers and HRSA’s Curious Actions. Drug Channels. Retrieved from https://www.drugchannels.net/2024/10/the-340b-program-reached-66-billion-in.html

[9] DiGiorgio, A. M., & Winegarden, W. (2024). Reforming 340B to Serve the Interests of Patients, Not Institutions. JAMA Health Forum, 5(7), e241356–e241356. https://doi.org/10.1001/jamahealthforum.2024.1356

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates. 

Co-Pay Accumulators are an Extremely Dangerous, Anti-Patient Policy

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

Today's lexicon outside healthcare policy discussions probably doesn't include the words, co-pay accumulators. But that is slowly changing as more and more people encounter what is widely recognized as an extremely anti-patient health insurance policy. Co-pay accumulators amount to nothing more than the greedy health insurance industry (and other payers) making prescription drug coverage less affordable for patients, especially for those living with chronic health conditions such as HIV/AIDS.

The Hepatitis B Foundation defines a copay accumulator (or accumulator adjustment program) as "a strategy used by insurance companies and Pharmacy Benefits Managers (PBMs) that stop manufacturer copay assistance coupons from counting towards two things: 1) the deductible and 2) the maximum out-of-pocket spending."[1]

Last year in the ADAP Blog, guest contributor Marcus J. Hopkins provided an excellent description on these potentially harmful policies: "Essentially, what a co-pay accumulator attempts to do is increase the amount of money consumers pay in order to decrease the amount of money insurers have to pay, once their annual deductible and/or Out-of-Pocket Maximum (OPM) is met. When consumers are allowed to count co-pay assistance cards against their deductible/OPM, they reach those limits sooner, meaning that insurers are then on the hook for every pharmaceutical fill after that date."[2]

Photo Source: Bankrate

Co-pay accumulators are particularly problematic for the HIV community because they rely on specialty drugs, such as anti-retroviral medications. In 2018, Dr. Adam J. Fein with the Drug Channels Institute warned, "Patients today are being asked to pay a significant share of prescription costs for more-expensive specialty drugs, because of high coinsurance amounts."[3]

Unfortunately, increasingly health insurance companies and PBMs have elected to institute co-pay accumulators. Make no mistake about it, but these co-pay accumulators will lead to patients being unable to afford their medication...and that will lead to less medication adherence...and that will lead to higher costs for the entire healthcare system. Our response is simple: It is time to advocate for the patient!

The AIDS Institute recently published an in-depth report, "Double Dipping: Insurance Companies Profit at Patients' Expense - An Updated Report on Copay Accumulators." According to the report's findings, in 45 states and the District of Columbia, there is at least one plan with a copay accumulator adjustment policy.[4]

For people living with chronic health conditions, such as HIV or viral hepatitis, co-pay accumulators generally pose significant problems for patients. As the report highlights: "With the many crises plaguing our health care system today, this very confusing issue can easily be dismissed. However, for the patients it affects, it simply cannot be ignored. And for those who haven’t experienced a copay accumulator yet, it may only be a matter of time."[5]

The problem for patients is much broader, though. According to the Patient Access Network Foundation (PAN), more than 10 percent of seniors shared that they took on credit card debt to afford prescriptions, while nearly 20 percent of seniors said they reduced spending on everyday purchases, including groceries and transportation.[6]

Photo Source: PAN Foundation

The Biden-Harris Administration recently had the opportunity to pump the brakes on co-pay accumulators, similar to the way they stopped the harmful demonstration project designed to weaken the six protected drug classes under Medicare's Part D. They failed to so, and the patient advocacy community was quick to express its concern.

“We are deeply disappointed that CMS passed on addressing the issue of copay assistance for prescription drugs and requiring insurers and pharmacy benefit managers to count assistance towards patient out-of-pocket cost-sharing and deductibles,” commented Carl Schmid, executive director of the HIV+Hepatitis Policy Institute. “Even before COVID-19, patients were struggling to afford their medications and relied on copay assistance from drug manufacturers. Now, the need is even greater. We know that the Biden-Harris administration wants to improve patient affordability of healthcare, particularly for vulnerable communities; however, they missed a perfect opportunity to demonstrate this commitment.”[7]

In a recent letter, U.S. Representatives A. Donald McEachin (VA-04) and Rodney Davis (IL-13) asked President Biden to halt the Trump Administration's copay accumulator policy ― which was included in the 2021 Notice of Benefit and Payment Parameters (NBPP).[8] It is now left in the hands of the Congress to reverse course on the extremely dangerous, anti-patient policy known as co-pay accumulators. Patient health depends on it!

[1] Hepatitis B Foundation (2020, March 4). Copay Accumulators – What They Are and What They Mean For Your Prescriptions. Retrieved online at https://www.hepb.org/blog/copay-accumulators-mean-prescriptions/#:~:text=A%20copay%20accumulator%20–%20or%20accumulator%20adjustment%20program,the%20deductible%20and%202%29%20the%20maximum%20out-of-pocket%20spending.

[2] Marcus J. Hopkins (2020, July 16). CMS Co-Pay Accumulator Rule Aims to Increase Consumer Costs. The ADAP Blog. ADAP Advocacy Association. Retrieved online at https://adapadvocacyassociation.blogspot.com/2020/07/cms-co-pay-accumulator-rule-aims-to.html.

[3] Adam J. Fein, Ph.D. (2018, January 3). Copay Accumulators: Costly Consequences of a New Cost-Shifting Pharmacy Benefit. Drug Channels. Retrieved online at https://www.drugchannels.net/2018/01/copay-accumulators-costly-consequences.html.

[4] The AIDS Institute (March 2021). Double Dipping: Insurance Companies Profit at Patients' Expense - An Updated Report on Copay Accumulators. Retrieved online at https://aidsinstitute.net/documents/2021_TAI_Double-Dipping_Final-031621.pdf.

[5] The AIDS Institute (March 2021). Double Dipping: Insurance Companies Profit at Patients' Expense - An Updated Report on Copay Accumulators. Retrieved online at https://aidsinstitute.net/documents/2021_TAI_Double-Dipping_Final-031621.pdf.

[6] Amy Niles (2021, April 19). Morning Consult survey: high out-of-pocket costs causing concern for seniors. PAN Foundation. Retrieved online at https://www.panfoundation.org/high-out-of-pocket-costs-causing-concern-for-seniors/. 

[7] Carl Schmid (2021, April 30). Biden Administration Passes on Protecting Patient Affordability of Medications. HIV+Hepatitis Policy Institute. Retrieved online at https://hivhep.org/press-releases/biden-administration-passes-on-protecting-patient-affordability-of-medications/.  

[8] The Honorable A. Donald McEachin (2021, March 22). McEachin Leads Bipartisan Letter Asking President Biden to Reverse Previous Administration’s Copay Accumulator Policy. The Office of U.S. Representative A. Donald McEachin (VA-04). Retrieved online at https://mceachin.house.gov/media/press-releases/mceachin-leads-bipartisan-letter-asking-president-biden-reverse-previous.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.

Kudos to Janssen for its 2017 U.S. Transparency Report

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

On March 20th, Janssen Pharmaceutical Companies of Johnson & Johnson hosted a stakeholder meeting in Washington, DC to unveil its "2017 Janssen U.S. Transparency Report" and also promote a dialogue on value, access, and pricing transparency. It is the second time the company has released the comprehensive report, and as such the ADAP Advocacy Association extends its kudos to them for doing so. Patient advocacy groups are often left out of these conversations, yet patients are the people who have the most to gain from transparency. Numerous disease patient advocacy groups were also in attendance, including groups representing people living with diabetes, rheumatoid arthritis, and various mental health conditions.

(Editor's Note: This blog is not intended to be an endorsement of any product made by Janssen Pharmaceutical Companies of Johnson & Johnson but rather acknowledge their efforts to educate stakeholders on their corporate responsibility)

The transparency report highlights four key areas, including Janssen's ongoing investments in new medicines, value assessments, pricing and patient access, and resources for patients. An increasing amount of the public policy discussion has focused on drug pricing, so the information conveyed by Janssen in the report helps patient advocacy groups like ours (and others) refine their areas of interest. It is also important to gain insight into Janssen's work to develop new medicines considering the complexities of the current health care system.

The purpose behind the transparency report is spelled out in a letter from the company leaders, Jennifer Taubert, company group chairman, and Anastasia G. Daifotis, MD, chief scientific officer:

"We want this information to be useful to all our stakeholders: patients, families, caregivers, and advocates, who are asking questions about out-of-pocket costs for medicines and what resources are available to help them; health care professionals, who are increasingly being asked to consider the overall value of the medicines they prescribe; policymakers, who are working to make policy changes to help their constituents get the care they need; and others in the health care system, like payers, who consider value and price information when they make decisions about coverage and access."

The report can be downloaded online at Janssen.com/2017ustransparencyreport.

The stakeholder meeting also featured an interactive panel discussion on Innovation, Pricing & Patient Access, as well as another one on Moving to a Value-Based Approach. Each included representatives from Janssen Pharmaceutical Companies, but also independent experts who were asked to share their insight. The two panels offered good analysis on the oddities of the current health care system, and some tough questions from the audience about what needs to change.

The panels discussed numerous issues, including medication adherence, rebates, insurance discriminatory design, valued-based contracting, importation, among others.

Adam Fein, CEO of the Drug Channels Institute, outlined the problem with the "gross-to-net bubble," as he phrased it. For example, whereas the average net prices offered by Janssen declined by 4.6% last year, it is unlikely the reductions were passed along to consumers. Interestingly too, Fein noted that 9 out of 10 drugs on the market are relatively inexpensive with low-cost generics available. However, it is the 1:10 specialty drugs that are the true cost-drivers.

Dan Leonard, President of the National Pharmaceutical Council, addressed the question over value by noting sick people are currently subsidizing the healthy people. Leonard's analysis echoed the recent remarks by U.S. Food & Drug Administration (FDA) Commissioner Dr. Scott Gottlieb. Leonard also touched on how most insurance benefits are valued from the point of sale, except for drug costs due to the complexities of the existing market (i.e., rebates).

One of the more notable — and troubling — observations was shared by Janssen's own, Dr. Anastasia Daifotis. Upon answering a question from a stakeholder in attendance at the event, she said transparency is important because it sheds light on the rise in non-medical switching and how these patient decisions are being driven by budget and not appropriate patient care.

The ADAP Advocacy Association recognizes that the cost of pharmaceuticals is an important part of the broader conversation about the current health care system. In fact, many of the specialty drugs mentioned earlier in this blog directly impact the HIV/AIDS community, and unfortunately we've witnessed patient cost-sharing for these therapies increase under many insurance exchanges. We encourage more conversations like the one hosted by Janssen, and also to reserve a seat at the table for the patient perspective. It is imperative!