Consequences of Alternative Funding Programs for Specialty Drugs: Patient Risks and Industry Concerns

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Alternative Funding Programs (AFPs) are third-party vendors that help self-funded employers cut costs on specialty drugs by excluding them from coverage as non-essential health benefits (non-EHBs), forcing patients into alternative sources like patient assistance programs (PAPs), copay assistance, or international importation.1236

Patients face risks from non-FDA approved drugs sourced from countries like Turkey or India, lacking US labels, warnings, and safety information, potentially jeopardizing rare disease patients.14

AFPs coerce patients by denying coverage or imposing 100% coinsurance unless they use the program, creating administrative hoops and distress, especially when standard benefits are exhausted.156

Critics, including RAAP, PAN Foundation, and Aimed Alliance, argue AFPs shift all risks to patients for employer savings and PBM profits, operating in ethical and legal gray areas, with calls for regulatory action.137

Recent reports (2025-2026) highlight growing AFP adoption among small- and medium-sized employers, with one in three businesses exploring them, amid investigations like CNBC's exposing opaque supply chains.245

Sources:

1. https://www.prnewswire.com/news-releases/raap-alternative-funding-programs-put-rare-patients-in-jeopardy-302655266.html

2. https://www.fiercehealthcare.com/payers/new-wave-middlemen-promise-savings-specialty-drugs-patients-bear-risks

3. https://www.panfoundation.org/fierce-healthcare-on-alternative-funding-for-specialty-drugs-patients-bear-the-risks/

4. https://www.safemedicines.org/2025/11/5-takeaways-from-cnbc-afp-doc.html

5. https://ncoda.org/news/alternative-funding-programs-implications-for-patient-care/

6. https://aimedalliance.org/alternative-funding-programs/

7. https://www.pharmaceuticalcommerce.com/view/faq-decoding-alternative-funding-programs