The top three places to find inefficient copay program spending

Written by Al Kenney on 27 September 2016. Posted in Co-Pay Program Optimization


There are many areas that contribute to inefficient spending within your copay program. After evaluating many different offer configurations, I’m prepared to name the top three areas where most programs waste money:

#3- Your cash offer: Brands seem to be struggling with how to best assist those patients who need the financial help the most, and this often leads to the discussion regarding including an offer for cash patients. It’s a fact that a cash patient’s adherence is less than half of the adherence rate for a patient with commercial insurance. It’s simply a matter of OOP cost (IE: the higher the out of pocket cost, the lower the adherence will be). So when considering including a cash offer, you must first think of what you can comfortably afford based on your current margin, and then how that net price will impact the trial and adherence of a cash patient. A cash offer has to be continual (multiple months) since once your offer disappears…your cash patient disappears as well. Stick first to what you can afford and then to what you think it will take to entice a cash payer to your brand.

#2- Your offer face value: Your offer face value (e.g.: The $5 in your “PALA $5” offer) is a very important aspect, but it is not the only consideration when structuring your offer. It’s really the combination of your face value and your cap that determines what the patient will actually pay which is a key factor in determining whether they decide to fill or not to fill. Every $1 increase in your face value has an impact on all of your claims. This means that by moving up $5 (from say $5 to $10) you have freed up a tremendous amount of money from the bottom (patients who may not need it) to the top end (patients who definitely need it). I call making the move the “Robin Hood Effect” taking from the rich and giving to the poor. Done correctly it can save you money and help you gain the incremental sales you are looking for. This is definitely something to consider next time you are thinking about making a change to your offer.

#1- Your Cap: The greatest area of wasted spend for brands (by far) is the cap you employ. All too often it’s too high as brand teams chase patients like insured, not covered (INC) patients. Trying to “save them” is very expensive since you are buying down all patients to the face value of your card which results in a lot of wasted spend. You have to find a subsidy level that is acceptable but still makes your highest OOP patients pay something.

Another thing everyone needs to remember is that fraud still can (and does) happen. Having a high cap will increase the likelihood that pharmacies process your cards incorrectly to provide the best benefit for their long time patients. Keep your cap in check and you reduce the problem to a very manageable minority.