Copay program utilization rates - What should your rate be?

Written by Al Kenney on 10 October 2017. Posted in Co-Pay Program Optimization

Utilization Rates

One of the questions we are frequently asked is about copay program utilization rates.  Many want to know what rate ranges they should be shooting for.  What are the brands that are “doing really” well getting? Thinking about what other brands in the marketplace are getting should not be something you should be concerned with. These rates depend on many factors, including your brand's objectives for the program, your margin requirements, your adherence and abandonment rates, and others.

Everything here depends on the brand’s situation.  Some brands have managed care issues with a large percentage of patients seeing NDC blocks and step edits at the pharmacy.  In these cases I’d be looking for an extremely high utilization rate on my copay program. The reverse situation would be true for a brand with great managed care coverage. Here I’d be selective with my offers and structure the program to try and help high OOP patients only.

Obviously, the offer itself and the channels used to distribute it, have a lot to do with utilization. A brand with lots of reps (for distribution) and maybe a Relay Health program with a $15 copay offer with a high cap could have a very high utilization rate, but at the same time this program would be taking a heavy toll on their margin, which may not be necessary given their situation. Sometimes it is a “be careful what you wish for because you might just get it” situation.  

In many companies we have the finance department as watchdogs over these programs which can be a real blessing as long as they too understand the levers that can help achieve the desired brand objectives.  Sometimes a high level of spending is necessary and other times its not.  If the brand focuses too much on ROI and profit (which is many times the case), without thinking about lost sales, the net result would not be positive.  You need to have the analytical tools, data, and understanding in place to achieve the right balance.

The real moral of the story here is that the optimal copay program utilization rate for your brand should come from within your own walls and within your own numbers, budgets, and objectives. One little change in a brand’s situation could completely change your strategy on what you should be doing and what you feel the correct utilization rate should be.