• 05 Jul 2012

    Co-Pay Program Design: Dos and Don’ts from Co-Pay Program Vendors

    Chris Wheeler, Director, Co-Pay Strategies, Zitter Health Insights

    Our latest syndicated research product, the Co-Pay Offset Monitor (COM), combines multiple data streams to provide a comprehensive resource on co-pay coupon and discount programs. One component of the COM is a partner selection guide designed to help marketers optimize their choice of vendors to administer their co-pay offset program.  The guide will provide information about the strengths and capabilities of co-pay program vendors (See Figure 1 for a selection of the vendors included in guide).

    Figure 1. Co-pay Program Vendors Profiled in the Vendor Guide.
    Co-pay Program Vendors

    We also provide ratings of vendors based on a survey of pharmaceutical marketers who have worked with them in the past (See Figure 2 for a sample vendor rating slide).



    Figure 2. Ratings of McKesson by Pilot Marketer Sample.
    Marketer Ratings of Co-Pay Vendors - McKesson

    We have interviewed several co-pay vendors to gather more complete information about their offerings.  We also used these interviews to draw on co-pay program vendors’ uniquely broad experiences with co-pay offset programs, and their understanding of trends and developments in the co-pay space. We also asked vendors for general advice and recommendations about co-pay programs. Here are some of their major suggestions.

    1.      Keep it Simple
    Vendors are eager to demonstrate that they have the capability to create highly targeted programs with a nuanced benefit design, but they also emphasize that simple programs are often the most effective.  A simple program is easier for patients to use, for physicians to recommend, and for pharmacists to process.  If patients don’t understand the offer terms, they may be resentful if they find that they do not qualify for the program or the benefit amount is less than expected.  This can be detrimental to brand loyalty. One vendor tells his clients that successful co-pay offset programs must offer a genuine, mutual benefit for the patient and the manufacturer.

    Clarity is also important in designing promotional materials.  According to another vendor, it is all too common for marketers to bury a coupon card in a busy brochure. Many patients will overlook the coupon card, leading to low redemption.

    2.      Define Unique Program Objectives — Don’t Just Imitate Competitors
    Many brands make the mistake of initiating a co-pay offset program without a clear sense of the program objectives.  Sample goals include increasing trial and brand recognition for a new product, or “buying down” co-pays in a region where the brand has a disadvantaged formulary placement with major health plans.  Without a clear program objective, brands often simply match the co-pay offers of direct competitors or of other brands within the same therapeutic area. But to be more effective, a co-pay program should be tailored to a brand’s unique competitive position, contracting, and formulary placement. The specifications or “business rules” of a brand’s co-pay program should be a product of its unique situation and program goals.

    3.      Budget Appropriately
    Vendors report that some brands have had to discontinue co-pay programs or reduce the benefit amount because they were taken by surprise by higher-than-expected program costs.  When planning their programs, some marketers underestimate the number of patients with very high co-pays.  Offers available to cash paying patients or “pay no more than” programs without a cap on maximum per-use benefit may drive up program costs.

    4.      Use Data and Analytics Reporting to Optimize Your Program
    As co-pay programs come to comprise a greater proportion of brands’ budgets, more energy is devoted to optimizing the use of these resources.  A vendor noted a trend toward a greater emphasis on the use of data and analytics to improve co-pay offset programs’ effectiveness.  More granular use of data and analytics can help to optimize programs. For example, if it is found that patients who receive monthly snail mail refill reminders are no more compliant than those who do not, this program feature can be dropped.

    5.      Take Advantage of New Technologies
    Several vendors emphasized the importance of e-prescribing as a new distribution channel for co-pay offset programs.  Social media and text messaging services have provided new channels for marketers to provide patients with coupon codes, refill reminders, and educational materials.  These new channels of communication provide opportunities for pharmaceutical manufacturers to build relationships with patients and enhance customer loyalty.

    One vendor who participated in an interview joked that his main advice to marketers was to “listen to your vendor”.  Co-pay program vendors have unique experience and perspectives on co-pay programs. For this reason, the Zitter Group’s Co-Pay Offset Monitor vendor guide will report on the subjective insights of vendors into the co-pay program space, as well as offering up-to-date information on vendor products and capabilities.