You know your patient copay subsidies are powerful tools for your brand and can make all the difference in the world for your patients to both start and stay on therapy. But did you know your copay offer can also be used to attract the right mix of patients to your brand? Understanding how you can reach different types of patients with your offer is critical to ensuring that you are designing the copay offer to attract your desired patient mix.
The first step is to segment your “patient universe” based both on brand usage as well as insurance coverage (or lack of coverage).
When looking at the category’s current patient universe based on brand usage, we see the following groups:
- Patients who have been diagnosed but are not currently on any drug therapy
- Patients who are purchasing a competitive brand
- Patients who are purchasing your brand, comprised of:
- Offer Utilizers – those purchasing your brand WITH a copay offer
- Non – Offer Utilizers – those purchasing your brand WITHOUT a copay offer
Next you should segment the patient universe based on insurance coverage:
- Commercially insured patients
- Insured not covered (INC) (they have commercial insurance but are not covered at this time)
- Government insured patients (Medicare, Medicaid)
- Uninsured patients / Cash payers
Your “patient universe” is comprised of all the groups noted above. The question is how many will finish their patient journey with a therapy recommendation which leads them to your brand? Your copay offer is out there hopefully packaged with marketing and educational initiatives. This package can play an important role in attracting, converting and retaining any of the desired patient groups noted above. The trick is being able to do this within your budget.
As you are planning your patient copay offer and program, the impact on each of these groups should be considered. You should continually ask yourself the question: “Is this offer structure and program design attracting the patient groups I want to attract at a margin structure that makes sense?”
Here are a few things to consider about the patients you will be attracting as you develop your “optimal copay program”
The importance of patients using your brand, but not using the copay offer. It’s very important for the viability of your brand to identify and hold on to these patients as they are your most profitable. Some but not all of these patients will have a copay out-of-pocket (OOP) amount less than your offer so they would be ineligible for the offer. See our blog entry and our white paper on Copay Offer Ineligible Patients (OIP).
Many brands make the mistake when revising their copay offer to now include these patients and start to give them discounts on Rx fills that were happening anyway (going from a PNMT $30 to a PNMT $20 for example). Few actions deflate your brand’s profitability more than giving your offer to a patient who would have filled anyway at their current OOP cost. You are better off spending that money on the patients at the higher copay ranges who currently are not filling. To do that you would increase your cap instead of lowering the face value of the offer.
The group of patients using your offer can vary greatly depending on how you structure your program. With a PNMT $30 offer, you can expect the patients with higher out of pockets to be the ones redeeming your offer since this is an attractive offer for those with high copays and those patients with copays lower than $30 would be ineligible for the offer. If you were to change your offer to SAVE $20, many of the high copay and cash patients would no longer take advantage of the program, greatly impacting the composition of the group of “offer utilizers”.
Here is a simple example of how much this group can vary: If you have a lucrative offer for cash payers while your competitors exclude them, there is a good chance you’ll pull more than your fair share of cash payers into your franchise (if that is what you want to do…and can do it profitably).
Use caution when using claims data to analyze and plan your copay program. Many times, brands only look at their current claims data to analyze and plan their copay programs because it’s the only group where the data is readily available. Just remember these are only the patients your current offer is attracting, not all the patients out there. Since the composition of this group can change drastically based on the offer(s) in market, we recommend using caution with some measures:
- The average patient copays calculated are usually overstated because these are the average copay amounts for patients who utilized your offer and those patients tend to have higher copays, driving the average up
- Patient adherence rates based on claims data can be misleading since they reflect the patient base and filling history of those using the copay offer (vs. the patient base not using the offer).
Should you extend an offer to uninsured cash patients?
Here is a very important question. If you decide you want to extend an offer to your cash patients, you need to be very precise with your cash offer. It has to be good enough to attract the number of cash patients you want, but not too lucrative as to negatively impact your projected profit on each script. You should expect your profitability to be much lower than for your commercially insured patients. The rule is to maintain an acceptable level of profitability so you are not stressed if the offer redeems at higher levels than you forecasted.
There is an old saying among pilots “I’d rather be on the ground wishing I were in the air, than in the air wishing I were on the ground!” You want to attract the cash patient but it makes the best business sense to do so profitably! You should have a cap on the cash offer which maintains a pre-determined margin. Remember you are discounting off the retail price and not off your contracted managed care pricing like you would do for a commercial patient.
There are many options to consider when determining whether your copay program should contain a cash offer. A simulation tool loaded with the proper data can be very helpful in testing the potential business impact of all the offers you are considering so you can settle on the one that best meets your objectives.
Understanding the different patient groups and how they can be impacted by your program activities is key, but it is only one of many aspects that should be considered in your overall analysis and planning process.