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Why a $0 copay offer should not be your starting point

Written by Al Kenney on 23 January 2017. Posted in Co-Pay Program Optimization

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Why a zero $0 copay offer should not be your starting point for your Pharma Product.

The year 2017 should be a big year for the pharma industry with many products expected to be approved across a wide range of categories in all areas (retail, specialty, and buy and bill). Once completing the FDA’s extensive hurdles to get to phase #3 and then onto final approval, these brands will be quite involved with managed care contracting strategies and most likely a patient copay subsidy program as well.

The mindset of most pharma executives and brand managers will be to start off with the best copay program possible. Most will translate that to mean the copay program with the lowest patient out of pocket. Looking at the current marketplace for copay programs they will see many brands still at a $0 copay offer and they may strive for the funding to get there.

While finding the right structure for your offer is imperative for your launch, a $0 copay offer is almost never the correct starting or ending point. In looking at thousands of programs across the industry we see that the $0 offer is almost always outperformed by the $5, $10, or even $15 offer. Many have speculated why brands get less when spending more… a lot more to get your offer down to $0. My thought is that a $0 offer sets a bad precedent in the patient’s mindset. Free is free and actually cheapens the brand’s value. Also when you want to change that offer to anything else suddenly the patient sees it’s no longer free!

The $0 OOP for a patient sounds like a real win for brands who can afford it. It seems fine in the beginning, however when your launch is over and you try and bring your offer up to lets say pay as little as $10, patients seem to react very negatively. Those same patients if started at $5 or more react less when their OOP is increased slightly later on. After all they are used to paying something, now with the new offer it’s just a little more.

You would think that the lower you go the more trial and adherence you will see…studies show that is not the case. Starting your offer at zero does absolutely nothing to increase patient trial or adherence… a sad but true fact you should consider for your next product launch. For most brands it’s just pouring money down the drain resulting in a poor ROI!