Legislative Update: Copay Accumulator Adjusters, PBMs, AB173, SB203 and Cole’s Act
The average annual cost of clotting factor therapies for a person with severe hemophilia is roughly $300,000. For patients with inhibitors, expenses can exceed $1 million per year. The total lifetime cost for patients with severe and moderate hemophilia B can exceed $20 million.
The treatment needs of patients with bleeding disorders do not typically vary during a given year, and patients need access to replacement clotting factor or other non-factor therapy year-round. Even the “average” hemophilia patient incurs tens of thousands of dollars of expenses monthly due to treatment cost.
There are many critical needs that people and families living with a bleeding disorder deal with every day. That is why GLHF continues to advocate for programs and services that help meet the needs of the bleeding disorders community of Wisconsin. That means staying involved in legislative activities. We are currently advocating for three pieces of legislation, Assembly Bill 137 (AB137), Senate Bill 203 (SB203) and Cole’s Act.
To understand these pieces of legislation, it’s necessary to understand copay accumulator adjuster programs and Pharmacy Benefit Managers (PBMs). Below are descriptions of both, as well as descriptions of the three pieces of legislation.
Copay Accumulator Adjuster Programs
A copay accumulator adjuster program is a strategy used by insurance companies and PBMs that stop manufacturer copay assistance coupons from counting towards two costs: 1) your deductible and 2) your maximum out-of-pocket spending. These programs affect people who use drug copay cards by not counting the payment that these cards assist with toward the deductible set by the insurance company. Patients are still allowed to apply to co-pay card benefits to pay for their medications up to the full limit of the cards, but when that limit is met, the patient is required to pay their full deductible before cost-sharing protections kick in.
According to federal regulation, copay accumulators are permissible only for branded drugs that have a generic equivalent, if allowed by state law. Health plans and PBMs are now prohibited by federal regulation from implementing copy accumulators for drugs that lack generic equivalents. Federal law allows states to prohibit copy accumulator programs. As of 2024, 20 states, the District of Columbia and Puerto Rico have laws that ban or restrict a health insurer’s or PBM’s use of copay accumulator programs.
Pharmacy Benefit Managers (PBMs)
PBMs are third-party administrators of prescription drug programs. They act as intermediaries between insurance carriers, pharmaceutical companies and pharmacies, negotiating drug prices and managing prescription drug benefits. The original goal of PBMs was to help to lower costs for insurers and patients by negotiating discounts with drug manufacturers and determining which medications are covered under health plans. They also influence the network of pharmacies and the medications prescribed by doctors.
PBMs have operated with little oversight, leveraging pricing strategies that drive up prescription drug costs for patients and employers alike. Many agree that reform is needed to increase transparency, prevent unfair pricing practices and ensure that savings are passed on to consumers rather than middlemen.
Assembly Bill 173 (AB173) (PBM Reform Bill)
Introduced on April 9 by Representative Todd Novak, Assembly District 51 (R-Dodgeville), and Representative Travis Tranel, Assembly District 49 (R-Cuba City), AB173 prohibits any PBM, or any insurer or self-insured health plan, from requiring or penalizing a person who is covered under a health insurance policy for using or not using a specific retail, mail-order or other pharmacy provider within the network or pharmacy providers under the policy.
The bill regulates PBMs, ensuring they act in the best interest of the pharmacy or pharmacists’ interests and ensure fair treatment within the pharmacy benefits plan. It prohibits PBMs from charging or collecting any form of remuneration that passes from the pharmacy or pharmacist to them, including claims-processing fees, performance-based fees, network-participating fees or accreditation fees. The statute also mandates that PBMs allow participants to use any licensed pharmacy or pharmacist in the state, regardless of the pharmacy’s network participation. Learn more about AB173.
AB173 does not explicitly ban copay accumulator adjusters, but recent legal developments indicate a significant shift in the regulatory landscape. As of 2024, the U.S. District Court ruled against copay accumulator programs, allowing insurers to count manufacturer copay assistance towards a patients’ cost-sharing limits. This ruling has led to many states now banning the use of copay accumulator programs, meaning that copay assistance is counted towards patients’ out-of-pocket limits. Therefore, while AB173 does not directly address copay accumulator adjusters, its implications align with the broader trend of increasing restrictions on such programs.
Senate Bill 203 (SB203)
Introduced on April 16 by Senator Mary Felzkowski, Senate District 12 (R-Tomahawk), along with her companion legislation, Cole’s Act, SB203 aims to regulate PBMs and their interactions with pharmacies and pharmacists. The bill requires PBMs to pay a professional dispensing fee to pharmacies or pharmacists, which is not less than the state’s Medical Assistance program rate. It prohibits PBMs from penalizing pharmacies or pharmacists for informing individuals about costs and reimbursement amounts. The bill also prohibits PBMs from requiring people to use specific pharmacies within their network. This legislation is part of a broader effort to ensure transparency and fairness in prescription drug payments and health insurance cost-sharing in Wisconsin. Learn more about SB203.
Cole’s Act
Introduced by Senator Felzkowski, Cole’s Act is aimed at reforming PBMs, a critical step toward ensuring fair drug pricing, increasing transparency for healthcare purchasers, and alleviating workforce challenges in the healthcare sector. The Pharmacy Society of Wisconsin, the state’s professional association for pharmacists, pharmacy technicians, and pharmacy students, lauds the introduction of the new Republican authored legislation
The bill is named in honor of Cole Schmidtknecht of Appleton, who passed away from a severe asthma attack in 2024 after his inhaler was removed from his PBM’s formulary. This legislation introduces much-needed reforms to increase transparency, prevent unfair pricing practices, and ensure that savings are passed on to consumers. By curbing excessive PBM fees and anti-competitive practices, the bill will help create a more sustainable healthcare system that benefits employees, employers, and healthcare providers. Read more about Cole’s Act.
Cole’s Act is not directly affiliated with SB203, but both are part of ongoing efforts to reform PBMs in Wisconsin. Both aim to lower drug costs and increase transparency. In addition, both have moved to committee for consideration, indicating their alignment with the goals of improving healthcare access and reducing costs for patients.
Senator Felzkowski wrote an OpEd about Cole’s Act, which was published in several places including the Eagle Herald (Marinette/Menominee), the Wausau Pilot & Review and Urban Milwaukee. If you like Senator Felzkowski’s OpEd, consider sharing it on social media and tagging Senator Felzkowski (@MaryFelzkowsi).
Read GLHF’s monthly e-newsletter, Headline News, as well as our social media platforms (@WiBloodDisorder) for future information about AB173, SB203 and Cole’s Act. Also, consider writing to your representatives in support of this legislation. It makes a difference! You can also post something on your personal social media accounts and tag your representatives. Find out who your representatives are here.