PAN launches national educational campaign about alternative funding programs (AFPs)

Today, the PAN Foundation launched a new national educational campaign about alternative funding programs (AFPs), which are programs designed by companies and offered to employer-sponsored, self-funded health insurance plans to save the plans money. Use of AFPs by commercial, or private, health insurance plans jeopardizes patient access to specialty medications and redirects finite charitable funds away from uninsured and underinsured patients. This campaign will raise awareness of the harms of AFPs and what patients can do if they are impacted by one.

A 2023 national poll from PAN’s Center for Patient Research found that many commercially insured patients taking specialty medications reported facing medication access issues through their employer-sponsored health plan. Other key findings include: 

• 1 in 4 respondents (25 percent) covered by commercial insurance say their plan has told them that the specialty medication they need access to is a “non-essential health benefit.”
• 1 in 3 respondents (29 percent) covered by commercial insurance say they have been referred to an external company by their plan to help them find financial assistance for their specialty medication.
• 1 in 3 respondents (28 percent) covered by commercial insurance have been told the financial aid they receive for their specialty medication will not count toward their deductible or out-of-pocket maximum.

“Far too many patients across the country are being denied access to their specialty medications by their employer-sponsored, self-funded health plans. Instead, they are being passed along to separate, third-party companies, known as AFPs, often delaying access to life-saving medications,” said Kevin L. Hagan, president and CEO of the PAN Foundation. “Unfortunately, most people aren’t aware about the use of AFPs and their harm to patients. Through our far-reaching educational campaign, we aim to provide people with easy-to-understand resources to better understand the impact AFPs could have on their access to care. At the same time, we continue to advocate against these harmful programs and urge Congress and the administration to take steps to end their use.”

How AFPs harm patients

Health plan sponsors, like employers that fund their own health coverage, may use AFPs to save money by excluding some or all specialty medications from coverage, deeming them a non-essential health benefit. Since the health plan does not cover these specialty medications, a patient’s out-of-pocket spending will not count toward their annual deductible. Patients are then directed to AFPs—also known as specialty drug carve out programs—operated by vendors that are separate from their health plan and are not health insurance.

These vendors work to connect patients with financial assistance through a drug manufacturer or charitable assistance program. Unfortunately, if successful, this often means one less underinsured or uninsured patient will get the support they need from that financial assistance program. It’s important to note that, technically, prescription drugs are an essential benefit per the Affordable Care Act. This includes specialty medications prescribed by healthcare providers, and their costs should be covered by health plans. If an AFP is not able to secure financial assistance for the patient, they may direct patients to illegally import medications internationally. But help paying for these medications is not guaranteed from any of these sources.

More about the campaign

PAN’s campaign includes new English and Spanish language explainer booklets, animated explainer videos, and other resources. The goal of the campaign is to raise awareness of and understanding around the use of AFPs and their harm to patients, and what patients can do if they are impacted. In addition, PAN’s campaign offers people an opportunity to reach out to their members of Congress to express their opposition to AFPs. To learn more, visit panfoundation.org/AFP.

Additional resources

• Visit PAN’s AFP education hub
• Watch PAN’s AFP explainer video
• Read the complete results of PAN’s national polling
• Explore PAN’s Center for Patient Research

About the PAN Foundation

As a leading charitable foundation and healthcare advocacy organization, the PAN Foundation is dedicated to accelerating access to treatment for those who need it most and empowering patients on their healthcare journeys. We provide critical financial assistance for treatment costs, advocate for policy solutions that expand access to care, and deliver education on complex topics—all driven by our belief that everyone deserves access to affordable, equitable healthcare.

Since 2004, our financial assistance programs have helped more than 1.2 million people to start or stay on life-changing treatment. In addition, we’ve achieved major policy victories that increase access to care, mobilized patient advocates to call for change, and educated people nationwide on critical healthcare-related topics. We’re committed to working towards a future where equitable health outcomes are a reality for all. To learn more, visit panfoundation.org.