How much impact do competitive offers have on your brand? The quick answer is competitive offers certainly impact your brand to some degree but at different levels depending on the category and your brand’s position in it.
We have found most brands put much too much stock in their competitor’s offers which result in the brand overreacting with a more lucrative offer than is needed. Every situation is unique and I’m certainly speaking in generalities here, but we have seen that the bigger and/or more unique the brand is, the less impact competitive copay card offers will have on that brand, provided that the brand’s offer is somewhere in the ballpark of the other offers in the category.
This means that if you are currently at a PNMT $20 offer and your competitor goes to a PNMT $15 or even $10 you probably don’t have too much to worry about. There is a good chance that your competitor just went down the road to reduced profitability and will have much less to show for it. The question is…do you want to follow them down that path? All indications are that HCP’s are still doing what they should be doing which is matching their patient’s therapy to the drug that they feel will do the best job regardless of what their offer is.
As I’ve already stated in some of my other blog entries, companies such as Zitter Health have questioned doctors and found that a high percentage of the time the HCP can’t recall the specific offers of the drugs they write most. I’m sure they know if the brand offers some copay assistance, but they most likely can’t recall what your offer is. If they can’t remember it, there may be very little impact from a change in offer.
If you are not the number one medication in your category, then the impact of competitive offers on your business may be somewhat greater – so you may want to do some deeper price sensitivity analysis to be able to measure the actual impact…but again as long as you are “in the ballpark” with your offer versus your competitors, you should be fine.
There is obviously a “fine line” here with these offers and when planning your program, you need to understand all the moving parts with respect to your brand and category. Many times, small changes to your offer can have a big impact on its performance, however it’s usually on the cost side of the equation and not on the incremental sales side.