‘Caught in the middle’: A battle between Vertex and insurers is leaving cystic fibrosis patients with crushing drug costs

Dan Brickey was stunned when he learned the news.

The cost of the cystic fibrosis medicine that his 2-year-old daughter, Ali, had recently started taking was about to climb from just $180 out of pocket each year to a whopping $43,600 in 2023. The dramatic change was due to a decision by the drug’s manufacturer, Vertex Pharmaceuticals, to slash the amount of financial assistance that it offers to patients this year.

So last November, Brickey scrambled to find a solution, quickly shifting his daughter to a different, more affordable health plan that will mean the drug, called Orkambi, will cost $7,500 this year. Although the price tag is much less than if he had stayed with his previous insurer, he remains upset at the unexpected shock and aggravation — and the far higher expense.

“We felt pretty helpless. We talked about what we could do financially, like if we needed to sell our house … but that would only help for so long,” said Brickey, a hospital nurse in Santaquin, Utah, where he lives with his wife, who is a kindergarten teacher, and their three small children.

“It makes me mad to no end. They put a price on our daughter’s life and it’s financially strained our family. If you’re in health care, whatever your role, you should always try to help, not make situations worse. That medication is already expensive, so why make it more expensive?”

The answer to his question is hardly straightforward.

A growing number of cystic fibrosis patients and their families, however, may soon encounter similar issues thanks to a grinding, behind-the-scenes struggle that is taking place between pharmaceutical companies and health insurers across the U.S. in response to the rising cost of prescription medicines.

But the decision by Vertex to reduce its annual copay assistance for its cystic fibrosis treatments — in this case, from approximately $100,000 a year to $20,000 — has greatly upped the ante.

This apparently marks the first time that a pharmaceutical company has taken such a drastic step, and underscores that many more patients are likely to get caught in the middle of a battle to control how medicines are paid for in the U.S.

For this reason, the episode is being watched closely — particularly, by physicians and patient advocates — as a harbinger for affordability.

“It’s a pharmaceutical company versus an insurer, and each is maneuvering to increase their profits. And we all understand their goals are to be profitable,” said Meghan McGarry, a pediatric pulmonologist at the University of California, San Francisco, who researches cystic fibrosis, a disease that severely damages the lungs and limits life expectancy to 46 years in the U.S.

“It’s a battle about who makes the most money,” she told us. “And patients are being putting at risk.”

The story begins with copay assistance programs, which drug companies have offered for years to help patients afford medicines by mitigating out-of-pocket and deductible costs. Health insurers counter that such assistance — generally, in the form of copay coupons or cards — is really just a marketing tool used to direct consumers to higher-priced drugs, which eventually raise costs to the entire health care system.

In recent years, health insurers and pharmacy benefits managers — which assemble the formularies, or list of medicines covered by insurance — have started striking back. As drugmakers offered more copay assistance programs, insurers and pharmacy benefits managers rolled out a complicated and confusing insurance tool with the wonkiest of names: a copay accumulator.

The advent of this tool, which is designed to blunt the use of copay assistance, was a watershed moment in health care, signaling a dizzying new round of gamesmanship between drug companies and health insurers.

Simply put, an accumulator does not count the value of copay assistance toward out-of-pocket drug costs applied to a patient’s deductible and out-of-pocket maximum. This means patients are on the hook for overall higher costs – unless the copay assistance from a drugmaker is sufficiently large enough to continue covering the expense. Insurers, meanwhile, keep copay assistance funds that are used by the patient.

Consider Brickey’s predicament.

Had he remained with his previous health insurer, he would have been charged $5,300 a month for his daughter’s Vertex medicine. Last year, the monthly $8,950 in copay assistance from Vertex would have more than covered his out-of-pocket and deductible costs. This year, though, the $20,000 annual cap — or $3,500 a month — means his assistance would have run out by sometime in late May. The new plan for his daughter does not have an accumulator, so he won’t face the same big jump in cost mid-year.

Underlying these dilemmas are the high prices for the Vertex drugs. The annual list price for Orkambi, the drug taken by Brickey’s daughter, is about $286,000, according to the data firm Elsevier Health. And the annual list price of Trikafta — a newer, triple-combination therapy that is effective in about 90% of cystic fibrosis patients — is approximately $322,000, according to SSR Health, a research firm that tracks pharmaceutical pricing.

To be clear, these prices do not reflect any rebates or discounts that Vertex may pay to pharmacy benefit managers to win favored placement on health plan formularies. But given that Vertex dominates this market, the company does not feel the same pressure to offer rebates compared with, say, several companies that all sell a similar rheumatoid arthritis treatment.

And patients have still other costs to consider. People with cystic fibrosis typically need additional medications — nebulizers, for instance — and frequent care to manage the disease, all of which adds up to substantial ongoing costs. Lowering the copay assistance has introduced a new layer of uncertainty into their lives, experts say.

“Patients are facing potentially significant affordability and access issues,” explained Mark Gooding, managing director of market access at the Avalere Health consulting firm. By January 2024, Avalere estimates that at least 13% of the total U.S. commercial health insurance market — or 18.8 million people — will be enrolled in health plans that restrict the use of copay accumulators.

Health plans most often apply accumulators to higher-priced, specialty medicines for combating chronic and hard-to-treat diseases, such as AIDS, hemophilia, rheumatoid arthritis, Crohn’s disease, multiple sclerosis, and different forms of cancer. So far, other drugmakers have not appeared to slash copay assistance for medicines used to treat other diseases, according to officials at several advocacy groups. 

For its part, Vertex declined to explain its decision to limit copay assistance to $20,000 this year. In an email, a Vertex spokesperson called accumulator programs “predatory,” because copay assistance is “designed to help patients, not insurance companies. … Even if we were to double or triple our assistance, patients would still have an increased cost.”

Vertex also refused to soften its position when asked by the Cystic Fibrosis Foundation, according to officials at the patient advocacy group, which hustled last fall to educate patients and families about the changes. Although the organization many years ago once invested in Vertex’s drug development efforts – it was called venture philanthropy – those old ties failed to make a difference as foundation officials were unable to convince Vertex to rollback its planned cuts.

“They want insurance companies to pay more than they are now and step up and cover this expensive drug,” said Jerry Nick, who chairs the Cystic Fibrosis Foundation Center Committee, which oversees accredited patient care programs. “I think what they’re doing, in a sense, is playing chicken and hoping they can force patient groups to mobilize and get accumulator plans changed.”

As for insurers, a spokesperson for America’s Health Insurance Plans, an industry trade group, argued that the copay assistance is an “elaborate scheme by drug manufacturers to keep their drug prices high.” He maintained the drug companies do this to help patients “circumvent” their deductible costs, rather than simply lower their prices, which causes insurers to pay much of the cost of a medicine.

“Big pharma masks the true cost of their drugs,” he wrote us. “Commercial (health) plans recognize these (copay assistance) schemes increase overall drug spending. Without use of accumulators and adjustment tools to neutralize their effects, plans would otherwise have to raise premiums or reduce coverage to pay for these high-priced drugs.”

Accumulators, by the way, are not the only insurance program scrambling the calculus.

There are also somewhat similar programs called copay maximizers, which reduce costs for a health plan by shifting costs to a drugmaker. Last year, Johnson & Johnson sued a company working with Express Scripts, the pharmacy benefit manager, for allegedly exploiting its copay coupon program and causing it to pay at least $100 million more in copayment assistance than it would have otherwise.

Nonetheless, accumulators are gaining most of the attention and prompting growing outrage.

As of last month, 16 states enacted laws that ban health plans and pharmacy benefit managers from using accumulators and at least another 10 states are considering a ban, according to Avalere Health. Earlier this month, a bipartisan group of congressional lawmakers introduced a bill to ban the use of accumulators, the second time such federal legislation has been attempted in the past two years.

“Only health plans and pharmacy benefit managers could take a program designed to reduce patients’ out-of-pocket prescription drug costs and turn it into a money-making machine,” said Rep. Buddy Carter (R-Ga.), a co-sponsor of the legislation, in a statement. The bill was quickly endorsed by several advocacy groups representing patients with multiple sclerosis, hemophilia, cancer, and AIDS.

Meanwhile, several patient advocacy groups filed a lawsuit last year against the Biden administration for implementing a rule that allows health plans and pharmacy benefit managers to use accumulator programs. Accumulators, they argued, are preventing Americans from accessing the “most promising” therapies and “harm patient health.”

Making things more complicated, many people are unaware that their health plans even have accumulator programs. Every health plan differs, but few rarely note in explicit language that they contain accumulators. And most people remain unaware since they have no reason to inquire when copay assistance from a drug company covers their expenses.

The issue only hit radar screens last fall when Vertex told patients their copay assistance was going to be cut this year. Few people, however, understood the implications or how to prepare, according to Jeff Zobell, an advanced clinical pharmacist in the Cystic Fibrosis Center at the Intermountain Primary Children’s Hospital in Salt Lake City, Utah, where he advised patients and families on how to cope.

“It’s been catastrophic for some,” he told us. “Many weren’t aware they’d run out of medicine during the year or that this would cause financial difficulty. And if they did figure out how to make some kind of change, it meant they would face out-of-pocket costs somewhere else. People have had to make sacrifices in other ways they weren’t planning on. There’s paperwork, time, new worries.”

Timing was also a factor, Zobell explained. Vertex began informing patients and their families shortly before open enrollment season typically begins, which left little time to understand details or how to plan. “It’s been a mess,” he said, adding that some families had already selected their health coverage for 2023 and were unable to make a subsequent change.

The Vertex spokesperson, however, maintained that the company has worked with patients who take its various cystic fibrosis treatments and “confirmed access” for more than 97% of those who were affected by the reduced copay assistance. She also maintained that 88% of those patients have already scheduled or received their first refill this year.

Nonetheless, some patients have been racing to compensate for the cut in copay assistance by applying for 12-month grants from nonprofit organizations that provide financial assistance as a stopgap. One charity that cystic fibrosis patients have been approaching is the HeathWell Foundation, which caters to people who are underinsured, according to Krista Zodet, its chief executive officer.

Already, two funds help nearly one-third of all cystic fibrosis patients in the U.S., much higher than the 1% to 2% for people with other diseases, she said. So far, there has not been an increase in grant applications from cystic fibrosis patients or families, but she expects that might increase as more people see their Vertex copay assistance start to run out over the next few months.

Brickey, for instance, is receiving a $15,000 grant this year from the HealthWell Foundation, which he said will help him cover his premiums and the higher cost of the drug for his daughter.

Grace Knight is also one of those who needs a grant, but even that may not be enough.

A third-year law student at the University of Texas at Austin, Knight takes Trikafta, the triple-combination therapy for cystic fibrosis. Last year, Vertex copay assistance covered all of her costs associated with the medication, but this year, the new copay cap means she will be short about $25,000 — and that’s after a $15,000 grant.

“These companies — the drug company and the insurer — like to point fingers at each other, but it’s not right to put the burden on the patient. It’s a lot of extra work to apply for grants, run your numbers over and over again. And not all patients are like me — a student — who has time to do this,” she told us. “But I don’t know what I’ll do when the grant runs out. Maybe find another grant or call Vertex. I don’t know.”

The need for assistance is tangible, according to a recent study in the Journal of Cystic Fibrosis. Overall, people in the U.S. who have the disease experience a high financial burden, which is associated with unmet medical needs. Income is the biggest risk factor for dealing with a financial burden for these people, and those covered by both Medicare and Medicaid are particularly at risk.

The study looked at nearly 1,900 patients, 64% of whom faced a financial burden. Specifically, 55% had problems with debt, 26% cited housing issues, and 33% said they were facing food insecurity. Moreover, 24% of patients were unable to meet prescription needs due to cost and the vast majority of those people experienced debt problems, according to the study.

Meanwhile, cystic fibrosis treatments are ringing the Vertex register.

Last year, these medications generated $8.9 billion in revenue for the company, an 18% increase from the year prior. The gain was due to a big jump in sales of Trikafa, since the medicine is much more effective than older cystic fibrosis medicines and, therefore, has become more widely prescribed. Sales of older cystic fibrosis drugs declined. But with $3.3 billion in profits in 2022, Vertex has found itself clearly in the crosshairs.

In a letter to Pediatric Pulmonology titled “How many billions is enough?”, McGarry, Zobell, and four other medical professionals slammed both the pharmaceutical and insurance industries for contributing to the financial strain being felt by patients. And while they demanded an end to copay accumulators, they saved most of their outrage for Vertex.

“The fact that Vertex is drastically decreasing its copay assistance program while earning these jaw-dropping profits truly exposes its corporate greed,” they wrote, and called for the company to restore its copay assistance program. “Changing the copay assistance program is akin to denying access to (the medicines) and will lead to the deterioration of health in people with cystic fibrosis.”

For Vertex, such accusations may have a familiar ring.

Earlier this month, a coalition of families petitioned four governments — South Africa, India, Brazil, and Ukraine — to make it possible to obtain generic versions of Trikafta. They hope that Vertex patents will either be sidestepped or revoked because the drugs are not available in their countries, which means the surest route to access is import the medicine and pay the U.S. price, which is too costly.

That effort emerged from a long-running battle in which families and advocacy groups have implored Vertex to make its medicines available in low- and middle-income countries. Just 12% of the 162,000 people estimated to be living with cystic fibrosis in nearly 100 countries are receiving Trikafta, according to a study released early last year. By contrast, the drug is available in 40 mostly wealthy countries.

Vertex has previously made headlines over the hardline it takes on the cost of its treatments. The company has battled with a string of wealthy governments that sought to negotiate lower prices before agreeing to reimbursement. An especially bitter struggle occurred over a recent four-year period in the U.K., where Vertex was accused of using patients as pawns in its negotiations.

To some, the decision to slash its copay assistance is reminiscent of that approach.

“We’re caught in the middle,” said Brickey. “No matter how much I scream, I know I can’t change anything. I just know it’s not fair to my daughter.”  

This post was updated to clarify that, by January 2024, Avalere estimates at least 13% of the total U.S. commercial health insurance market will be enrolled in health plans that restrict the use of copay accumulators.