Brand lifecycle: The often forgotten, but major consideration when structuring your patient copay program.
There are many factors influencing your copay program but a key driver impacting your objectives is where the brand is in its lifecycle. Your objectives for the brand will certainly be different depending on which lifecycle stage your brand is in:
Launch – At launch, you want to drive as much trial as possible so this is when most brands put forth their most lucrative offer. The key here is to give enough of an incentive to get patients to fill but not to give more than is necessary. If your brand has a unique point of difference, you may not have to go as deep as some of your competitors.
You can expect your gross margin to be low as your brand will be struggling to secure commercial contracting coverage, as well as the extra cost in your copay program due to uncovered patients. This unfortunately will cost you money. This is not the time to try and increase net margin.
Growth stage – When the brand is firmly in the growth stage, copay offers should be adjusted. They still need to provide a good incentive, but you can start to dial the offer back a bit once you feel your brand has good traction and acceptance with your patient and HCP communities. How much you can dial it back and not impact your volume is the real consideration. Here a simulation tool comes in really handy when planning adjustments to your copay offer.
Maturity – Once your brand is mature and/or a leader in the category, you might want to dial your offer back even more (adjust face value and/or reduce your cap) to try and capture a bit more profitability before going into the decline stage (pre-LOE). You will also be focused on driving increased adherence and ROI more than ever before. You may trade a tiny bit of volume, but the result should be greatly increased profitability.
Decline – There will be a decline stage as the brand approaches its loss of exclusivity date or if any new competitors come to market. Here your strategy will be to defend what you have and maintain or increase patient adherence rates prior to the loss of exclusivity. This will give you the best chance of maintaining your patients post LOE.
Post LOE – Some brands give up on their copay program once the brand goes LOE, but this is usually not the best decision as many brands have greatly benefited from keeping some kind of copay program in place post LOE. Let’s face it, many patients, if given the choice, would like to stay with the brand which got them to where they are now. Generics deliver uncertainty which many patients will choose to avoid. If your brand has good brand loyalty, chances are keeping a copay offer in place will greatly benefit both your patients and the brand.
During each of these brand stages having the right offer in place is the best way for you to achieve your brand goals. Optimizing the offer amounts, caps, # uses etc. for the brand’s life stage is critical for achieving the brand’s goals.
