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What percent of your overall business should come through subsidized copay programs?

Written by Al Kenney on 25 October 2016. Posted in Co-Pay Program Optimization

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In working with clients over the past few years, one of the questions I am frequently asked is what percentage of a brand’s business should come through their copay program. This question which on the surface seems like a relatively easy one to answer with a fixed percentage is actually quite complex and the reason brands dig deep on their analysis of their programs with us.

I will start the answer by saying that the answer is a triangulation between at least three major components:

  1. The brand’s current objectives – It ollowing to look at the next two variablese at least a strating baseline the brand, not a situation where you are running arouis very important the brand have objectives they monitor throughout the year for things like sales, trail, adherence, ROI and profit. These will help set the framework for right percentage of claims. Next we need to look at the following two variables
  2. The brand’s financials - WAC and Margin are going to play a major role here as knowing what you can afford will help you triangulate the correct utilization percentages for each brand. Keeping this in mind you can determine at least a starting “baseline” for a percentage you can afford. One rule of thumb we like to live by is to always make sure the program you put in market is producing a profit on a per claim basis. . This is because if the program actually does better than expected you want it to be a good thing for the brand, not a situation where you are running around trying to shut everything down and counting your losses.
  3. The brand’s lifecycle – where the brand is in its lifecycle will help determine the correct range here. A brand in its launch or growth stage should have a greater percentage of their TRx’s coming from copay program usage verses a brand that is either mature or beginning to

With that said it is no surprise that there is not a one size fits all answer to this question. There is a “right” percentage for every brand but you must dig into your market position, your objectives, and the brand financials through detailed analysis to determine the percentage that is right for your brand.