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How do you know when you are spending too much?

Written by Al Kenney on 11 July 2016. Posted in Co-Pay Program Optimization

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How do you know when you are spending too much of your budget on copay?

Do you sometimes feel like Steve Martin from the movie "The Jerk" when he said "I stopped giving blood when I cut myself and nothing came out"? Patient copay programs can be a never ending "money pit" for brands.

That's OK if the program is generating the incremental volume to make up for the spending, but what if it's not? Copay vendors don't give you an incremental volume report - they can only tell you the total number of claims your program has produced. So how do you know what percentage of those claims are going to those patients who would have filled anyway (base script volume)?

How many patients started therapy on your brand as a result of the patient copay program you offered them? Can you answer this question? If not, don't worry- you are in the majority! Most brands have no idea what their program is actually doing for the brand. They just know they need to have a program in market and that it "is working" because they see claims coming in. The problem is that program claims don't equal incremental trial or adherence. They make you feel good, but it is important to establish benchmarks for success so you can track and improve the performance of your program over time.

Many brands measure success by looking at redemption or utilization rates. Redemption rates are calculated by taking the # of card claims divided by the number of offers distributed. However, redemption rates can easily be over or understated if the quantity of coupons distributed is not accurately tracked. In contrast, utilization rates are calculated by taking the number of claims divided by the TRx's for the brand. Utilization is the better of the two measures to be looking at because it is a more accurate measure and it shows what % of TRx's were actually moved with a coupon. Let's say your average utilization rate is 15%...sound good? Is it? What should it be? Looking at what other brands are doing with similar offers is one way to benchmark yourself but it is important to preset your goals for utilization based on your brand's unique profile. This is the only way you'll know if your program performance is in line with what you should expect.