California man thought co-pay card would cover his $5,000 medication — then a big surprise bill exposed a costly insurance loophole

Initially, everything appeared to work as promised. His insurance authorized coverage, the co-pay card was approved for nearly $9,500 annnually and his first prescription refill came with no out-of-pocket expenses.

“I was happy when I got the message,” he told The Washington Post, adding that his doctor had reassured him the co-pay card was expected to cover the medication (1).

But just weeks later, Mishra was billed $441.02 for his second refill and was told his co-pay card had been depleted.

Co-pay didn’t prevent a surprise bill

Insurance records showed Mishra’s insurer covered only a small portion of Otezla’s roughly $5,250 monthly list price, paying just over $300 for a 30-day supply. Most of the remaining cost was covered by a manufacturer-funded co-pay assistance program he had enrolled in.

Health policy experts say situations like this reflect broader tensions in the U.S. prescription drug system. Aaron Kesselheim, a professor of medicine at Harvard Medical School who studies pharmaceutical pricing, has described co-pay assistance programs as part of an ongoing tug-of-war between drug manufacturers, which set high list prices, and insurers trying to limit how much they pay for expensive medications.

Insurers have increasingly adopted co-pay accumulator and maximizer programs, which determine how manufacturer assistance is applied to prescription costs. Under these policies, assistance may lower what a patient pays at the pharmacy counter but often does not count toward their deductible or annual out-of-pocket maximum, allowing the funds to be used up quickly.

The dynamic reflects the reality of the U.S. drug market, where patients pay far more for medications than those in other developed countries. In 2022, prescription drug prices in the United States were about 2.8 times higher than prices in comparable nations (2).

The companies involved offered differing explanations for how the costs were applied.

Caroline Landree, a spokesperson for UnitedHealthcare, said co-pay cards are arrangements between patients and pharmacies that operate outside of insurance coverage. Amgen, the drug’s manufacturer, pointed instead to health plan design.

“Co-pay assistance programs are designed to help patients start and stay on prescribed therapy, but the value of that assistance can be exhausted more quickly when a health plan requires patients to pay the full list price of a medicine,” spokesperson Elissa Snook said in an email statement to The Washington Post.

High prices force patients to ration medication

Many Americans cannot afford the list price of brand-name prescription drugs. U.S. households carry at least $220 billion in medical debt, with health care costs leaving millions of people owing thousands of dollars (3).

Facing uncertainty about how much his medication would cost, Mishra said he began stretching his prescription supply by skipping doses and cutting pills in half while waiting for a new manufacturer's co-pay card to reset in January. As he reduced his treatment, many of his symptoms returned.

According to the Centers for Disease Control and Prevention, the high cost of prescription drugs has led more than 9 million adults between the ages of 18 and 64 to skip doses, take smaller amounts or delay refilling medications (4).

Even after receiving a new co-pay card worth $9,450, Mishra said the assistance still did not cover his treatment. He paid additional costs from his health savings account to meet his $5,000 deductible, including a $550 charge in February. When he contacted his insurer about the next refill, he said he was told he could owe roughly $4,450 for a single month’s supply before reaching his out-of-pocket maximum.