The purpose of this whitepaper is to explain the unintended consequences of alternative funding programs, raise attention to the risks for employers and employees, and provide more ethical cost-containment strategies for employer-sponsored health plans.

A recent survey showed that the vast majority of employers think health benefit costs are excessive, with four in five believing these costs will become unsustainable in five to ten years.[1] These concerns are warranted and reflect a decade-long rise.

Annual premiums per employee in 2023 cost employers an average:

  • For family coverage $17,393
  • For single coverage $7,343 [2], [3]

Key Definitions

  • Alternative Funding Program (AFP): Programs designed by for-profit third-party vendors and marketed to employer-sponsored self-funded health plans. AFP vendors either work with the health plan to exclude specialty drugs from coverage or deny prior authorization for specialty medications. In both instances, vendors then seek to procure the employee’s medication from a manufacturer patient assistance program (PAP).
  • Copay Assistance: Financial aid offered by drug manufacturers and non-profit organizations to help patients afford the copay for their medication.
  • Patient Assistance Program (PAP): Programs offered by drug manufacturers that directly supply prescription drugs at no cost to uninsured or underinsured patients.
  • Specialty Drugs: Prescription drugs treating rare, chronic, or complex conditions that may require special handling and close patient management; they are often higher priced than non-specialty drugs. his white paper was prepared

The coauthors of this white paper and represented patient communities urge employers to consider the risks associated with AFPs and the negative impact these programs have on their employees.
This white paper was co-authored by:  Ashira Vantrees, JD, Aimed Alliance – Ashley Gregory, Hemophilia Foundation of Northern CA – Estela Mata-Carcamo, Looms for Lupus – Kim Czubaruk, JD, CancerCare – Lindsay Videnieks, Headache & Migraine Policy Forum – Lynne Kinst, Hemophilia Council of CA – Madelaine Feldman, MD, Coalition of State Rheumatology Organizations – Patsy Writesman Pagan, Healthcare Educator – Richard Howard, MBA, Spondylitis Association of America – Terry Wilcox, Patients Rising.  

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