Originally published by our sister publication Specialty Pharmacy Continuum
By Gina Shaw
For hospital and health-system pharmacists who spend hours navigating patient assistance programs (PAPs) on behalf of their patients, a session at the InformaConnect Patient Assistance and Access Programs meeting, in Philadelphia, in March 2026 offered an inside look at the financial and operational pressures shaping those programs, and why some patients fall through the cracks.
PAPs—manufacturer-sponsored programs that provide free medication to patients who cannot afford them—sit at the intersection of two distinct cost categories on a manufacturer’s profit and loss statement, and understanding both is essential to understanding why these programs come under pressure.
The first is gross to net: the difference between a drug’s list price and what the manufacturer actually nets after rebates, discounts, distribution fees, and copay program costs are accounted for. “When you ship a product out the door and it eventually becomes a therapy dispensed to a patient at a pharmacy, everything that happens in between—what type of patient that is, what programs they qualify for, what rebates are going out—all that is gross to net,” explained Patrick Coyle, a former pharma chief financial officer (CFO) who is now a gross-to-net risk advisor.
PAPs don’t directly appear as a gross-to-net expense, as the drug is given away, not sold, but there’s still a strong indirect relationship. A patient who enters a PAP inappropriately, for example, is a patient who isn’t generating commercial revenue or being captured in payor contracts. “When a PAP isn’t properly managed, it has deleterious effects on gross to net,” Mr. Coyle said.
The second cost category is selling, general and administrative expenses, or SG&A; this is where PAPs hit manufacturers most directly because SG&A covers the operational infrastructure required to run a PAP. “All of the activities that happen behind the scenes—making sure this is the appropriate type of patient, going back and forth on prior authorization, the time it takes for the product to get out the door—those are all things that hit the SG&A,” said Shawn Adeoye, the director of patient access and affordability at AbbVie. That means the hub vendors who field phone calls, verify insurance status, and process applications; the staff who oversee them; and all the manual case management required to get a free drug from a manufacturer’s warehouse into a patient’s hands.
When brand margins come under pressure, finance teams look for places to cut, and they often start with programs without a clearly articulated return on investment (ROI), Mr. Coyle said. “Nobody is calculating ROI on patient assistance programs. So, they become an easy target for people who don’t understand them.” He described his own evolution on the issue:
Before he was willing to recommend funding cuts himself, he went out on field rides, visited hubs and pharmacies, and saw firsthand what was actually happening to patients. That experience, he said, is what drove his current work helping CFOs understand why cutting PAPs is often a false economy.
The problem is compounded by a long-standing institutional reluctance to connect PAP performance to commercial outcomes, Ms. Adeoye said. “Because PAP is typically seen as off-limits to discuss from a revenue perspective, we don’t treat it with the lens it deserves. But this program is part of the total access package. It can impact the doctor’s perception of access, and ultimately the bottom line.”
She advocated for regular analytics reviews that go beyond internal PAP metrics, specifically comparing PAP program growth against top-line gross sales. “If our programs are growing off the rails compared to actual top-line growth, those are conversations you need to have with executive leadership,” she said. “Is it external pressure? Or do we have policies in place, even for our field sales teams, that are driving growth to a program intended for patients in need, and we’re not seeing it used in that capacity?”
When it comes to persuading finance and executive leadership of the importance of a PAP, Ms. Adeoye described what she called a “four-part method”: State the problem crisply and in monetary terms, present two or three concrete solutions, and frame the conversation around what happens if nothing changes. “Sometimes you have to say, ‘If I do nothing, no one’s getting their drugs. No sales are going out the door,’” she said. “Put it in a monetary sense, even though we resist ROI language for PAPs.”
AFPs ‘Hit on Two Fronts’
The most pointed discussion centered on alternative funding programs (AFPs). In an AFP arrangement, a pharmacy benefit manager carves a specialty drug out of a patient’s coverage and works with a third-party vendor to route that patient, often without their full knowledge, toward a manufacturer PAP.
“AFPs hit on two fronts,” Ms. Adeoye said. “They hit the copay program hard on the gross-to-net side, and then they drive up SG&A because every call to verify whether a patient is actually in an AFP is manual and costly.” Programs designed for patients who genuinely cannot afford their medications become financially strained by patients diverted from the coverage they were entitled to. Distinguishing AFP-diverted patients from truly eligible ones is nearly impossible without specialized analytical tools, she said.
Mr. Coyle added that manufacturers should look harder at fraud, waste, and abuse. “Start with a pharmacy audit. When you find bad actors and correct them, you return money back to the programs that need it, and you give the organization confidence that these things are being managed effectively.”
Ms. Adeoye described personally searching pharmacy addresses on Google Maps and finding that some were physically nonexistent. “There was a whole boarded-up front of an old Kmart abandoned. Fraud is real, and we typically don’t think of it in our PAP space. We know it exists with copay, but we need to check under every hood.”
The sources reported no relevant financial disclosures.