Understanding the Pros and Cons of Manufacturer-Supported Programs

With drug costs climbing and employee demand for specialty medications rising, many plan sponsors are turning to manufacturer-supported programs to ease financial strain—for both the plan and its members. But these programs aren’t as straightforward as they seem. While they offer the promise of reduced out-of-pocket costs, they also introduce complexity, potential compliance risks and unintended financial consequences for employers. If you’re a CFO or CHRO evaluating these programs, it’s critical to understand how they really impact your benefit strategy.

Defining Manufacturer-Supported Programs

Manufacturer-supported programs are funded or facilitated by pharmaceutical companies to help plan members access and afford their medications. While they can significantly reduce out-of-pocket costs for plan members, these programs require close assessment to determine their overall impact on plan sponsors, patient health and drug costs.

Copay Assistance Programs (CAPs)

Drug manufacturers cover a portion of a plan member’s out-of-pocket costs for specialty and non-specialty drugs. Manufacturers tend to provide more assistance for specialty medications than non-specialty medications like GLP-1s.

• While CAPs can be beneficial, they manipulate plan sponsors’ ability to manage their plans.
• Plan design:
  • Vendors and pharmacy benefit managers (PBMs) use CAPs to help plan members meet their deductible amount without any out-of-pocket expense, unless parameters are put in place.
• Plan formularies:
  • For example, we recommend that plans use formulary tiers, with generics as tier-one drugs because they’re lower cost and can have a lower co-pay. Then, use tier-two brands for higher rebates, which lower premiums. CAPs allow plan members to use any tier drug, even if it’s not on the formulary, because they don’t have to pay the co-pay. The plan must still pay its part of the drug.
• In the long run, plans pay for CAPs through drug inflation and the overall cost of the drugs coming to market.

PBM CAPs are typically either accumulator or maximizer programs.

Accumulator Program

Savings gained from the copay card do not apply toward the plan member’s deductible. Only the amount the member personally paid counts toward their deductible and out-of-pocket maximum. However, the PBM may not know that the plan member used a copay card for the prescription.

Maximizer Program

This program uses an accumulator program while also maximizing cost savings from copay cards. Medication cost share is adjusted to equal the maximum benefit available under the copay card.

Read more about Copay Assistance Programs.

Patient Assistance Programs (PAPs)

Pharmaceutical manufacturers offer financial assistance to plan members who meet certain income and eligibility requirements, covering up to 100% of the drug cost.

• The disruption is high on PAPs because plan members must provide financial documentation that proves their need for assistance.
• While the disruption is high, PAPs provide cost savings for plan members and sponsors.

The Takeaway

Manufacturer-supported programs can feel like a win-win on the surface—but the reality is far more nuanced. Do these programs drive long-term value or create hidden costs through drug inflation and benefit design erosion? Do they align with your plan’s goals and compliance obligations? As pharmacy benefits strategies grow more complex, employers need to be vigilant in how these tools are deployed.

If you’re unsure how manufacturer-supported programs fit into your overall pharmacy benefits strategy—or whether they’re working for or against your cost-control efforts—we’re here to help you navigate the details and make informed, strategic decisions. Let’s talk.