Situation:
A major pharma company needed to trim $30MM in copay program spending company-wide and still maintain their growth. The company came to Alpha 1C to optimize their copay programs across their product portfolio. Objectives were as follows:
- Maintain sales growth while reducing cost by $30MM (-16.6%)
- Stay within the assigned corporate budget overall, but set budgets and offers for each brand to optimize the copay spend
- Wanted to understand each brand’s price “tipping point”. Specifically were they buying down the price more than they needed to acquire a patient?
- Complete the entire project in a 6-week time period
- Start fresh, all options would be considered
Our Process:
- Detailed questionnaires were sent to each brand team and interviews were set with senior management
- We built customized optimization models for each brand using both client data and data from our industry database
- Copay budgets and program parameters were determined for each individual brand through an iterative process (to ensure the objectives set by management for the total portfolio would be achieved)
Results:
- Over 1,700 scenario forecasts were produced for the brands
- A projected P&L containing key line items was provided for every scenario run
- Adjustments to patient offers were recommended for most brands
- Two brands had offers in market that did not need to change
- One brand’s copay program was discontinued
- The company achieved its $30MM cost reduction goal, significantly increasing profitability, while maintaining its sales growth trajectory
