Co-Pay Program Optimization

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The Five Most Misleading KPI’s

Written by Al Kenney on Sunday, 28 June 2015 00:00. Posted in Co-Pay Program Optimization

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There are many commonly used KPI’s for planning or evaluating copay programs. Here is my list of a few of the commonly used KPI’s and examples of why each one can be very misleading if looked at individually:

1. Cost per Claim – the cost you paid on average for each claim derived from your copay program. Many feel their underlying objective is to reduce this number to produce a better financial outcome for the brand. This KPI is very deceiving and here is why. As an example, let's take a Pay No More Than (PNMT) $30 offer. You decide to move to a PNMT $25 program, fully expecting that because your offer is better that your cost per claim will go up...results are now in showing that your cost per claim went down. Why is that? It probably happened because you have now opened the offer to a higher percentage of your patients that were not eligible for it before (patients paying between $25.01 and $30). Each of those patients received up to a $5 discount and that $5 paid on those claims may have brought your overall average cost per claim number down.

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Are You Closely Tracking Your Patient Abandonment Rates?

Written by Al Kenney on Monday, 15 June 2015 16:07. Posted in Co-Pay Program Optimization

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As the industry continues to adopt e-prescribing (and for good reason) few are aware of the negative impact on their reported patient abandonment rates.

This is important because many companies and brands track abandonment as one of their key KPI’s without knowing that the continuing expansion of e-prescribing is actually counteracting their other efforts to reduce these rates.

To understand the issue in more detail lets take a look at what an “abandoned” prescription really is and how abandonment rates are recorded. An abandoned script starts with patient intent to actually fill it. In other words the patient has to start the process with the intent of actually filling the script. Taking the written script and presenting it to a pharmacy is the start of that process.  

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Secrets to Developing the Optimal Co-Pay Offer

Written by Al Kenney on Tuesday, 02 June 2015 16:07. Posted in Co-Pay Program Optimization

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For years now we have been asked the same seemingly simple question “what is the best co-pay offer for my brand?” As if this is something we’re supposed to know off the top of our heads.

 Unfortunately there is no one co-pay offer across the industry that will work for every brand in every situation. By now everyone should know the best offer is different for every brand as each has different attributes and competes in a very different and constantly changing market. Even if we were to determine the perfect offer for the brand today, that offer should be revisited in a minimum of every six months. Seemingly small impacts in the category or even in within your company can have a major impact on the offer which should be put in market.  

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Do Incentive Programs Really Work?

Written by Al Kenney on Thursday, 23 April 2015 16:07. Posted in Co-Pay Program Optimization

man shruggingIs the practice of delivering these patient discounts changing behavior by increasing trial, compliance, and/or persistence? This is such a loaded question.

Of course it can pay out... but if you look at the current marketplace, based on what I have seen, only about 20% of all incentive programs currently in market are producing a positive ROI for their brands.

The bigger issue ... Brands don't know their offers are not working because so little effort goes into the design of the program/offer and almost no one has a sound process/methodology to evaluate the programs they have in market. One major reason for this is "learned apathy" on the brand side. Doing the same thing we did last year (i.e.: same offer, same vehicle, same delivery, same vendor, same everything!) My grandmother used to tell me that the definition of an idiot is doing the same thing over and over and expecting different results. How long have you had the same offer in market and not been happy with the results before you did something?

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Do Patient Co-Pay Discounts Disrupt our Health Care System?

Written by Al Kenney on Friday, 16 January 2015 16:46. Posted in Co-Pay Program Optimization

health careIn the past year there have been a series of articles written by the general press implying that the use of patient incentives by manufacturers disrupts and adds cost to our managed care system.

They point out that in many cases when a brand name manufacturer incents a patient to buy their drug (not the competitive drug or the generic equivalent) the insurance company’s plan dictates they buy millions of dollars of cost are transferred over to the insurance companies. This is because a generic drug may cost the insurance company $50 to provide to their patients with a $5 co-pay while it may cost them $100 or more to provide their members the name brand drug. The articles imply the insurance companies, seeing lower profits, will work to transfer those costs to their members in the form of increased premiums, raising the cost of our national healthcare by billions overall.

On the flip side there’s evidence showing that if manufacturers spend a bit more on medication discounts and bolstering prescription drug adherence among their patients, in most cases total health spending can actually be lowered. Studies cited by the National Council on Patient Information and Education (NCPIE; Bethesda, MD), in its 2007 “National Action Plan for Enhancing Prescription Medication Adherence,” conclude that drug non-adherence adds $100 billion per year to overall healthcare costs, and the indirect costs. If you include absenteeism from work and lowered overall job productivity you can add another $77 billion. Another study which shows similar conclusions is called “Medication Adherence Leads to Lower Health Care Use and Costs Despite Increased Drug Spending”. It appears in the January 2011 issue of Health Affairs.