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In response to brand-name drug manufacturers developing co-pay assistance programs to help patients pay high out- of-pocket costs for expensive brand-name drugs, insurers have developed co-pay accumulator adjustment programs (CAAPs) that exclude payments made by drug manufacturer assistance programs when calculating whether beneficiaries have met their yearly out-of-pocket maximums. By doing so, these programs are intended to drive beneficiaries to lower-priced generic alternatives. A rule finalized in July 2020 makes such programs permissible even when a brand- name drug does not have a generic or medically appropriate alternative, while not requiring transparency from payers about the existence of such programs. This commentary explains how CAAPs work and how this finalized rule may affect spending on prescription drugs. [ABSTRACT FROM AUTHOR]

This Viewpoint explains how "skinny labeling" works (bioequivalent drugs approved for unpatented uses and excluding patented indications from the generic drug's labeling), the uncertainty about this pathway, and how the government and generic manufacturers can help restore timely generic competition in the face of brand-name drugs protected by patents. [ABSTRACT FROM AUTHOR]