Follow the leader has been a strategy used countless times over the centuries but the vast majority of times it has not worked out well for the follower. These days when we talk to brands, many say the same thing: “We just match or try and beat our competitor’s copay offer”. That strategy sounds like a safe strategy… but is it?
There are many assumptions that you will be making when choosing to follow the competition. You are assuming that your competitor knows the best approach – but do they? Would that be the best approach for your brand as well? Does copying your competitor’s copay program structure best address the unique situation and patient base for your brand and will it meet your specific corporate objectives? You could just be following your competitors down the rabbit hole they are trying to get out of!
Most times, the “follow the leader” strategy results in brands not meeting their goals. This is because most of time there is only one way to go with this strategy and that is down… down to a lower face value (and a higher cap payout). Then everyone sits around and wonders why no one is making any money. We often hear “We don’t understand how our competitors could be making any money with that offer amount”. Let’s face it…this follow the leader strategy is driven by fear of the unknown. It’s the easy way out just like when you were a kid and your mom asked you “if Jonny jumped off a bridge would you too”? I guess the answer can still be yes.
The optimal copay program structure is one that best addresses the patient’s needs while also meeting the brand’s goals and budget. A thorough predictive forecasting analysis should be done before the copay program structure is finalized to ensure that all goals are being met, including net margin objectives and budget requirements.
Matching your competitor’s program could be costing you millions of extra dollars and likely will not achieve your brand’s goals! And, while you are talking about potentially matching your competitor’s offer, they are likely having the same conversation and may be interested in matching yours! Many times, brand teams are just waiting for the other brand to move in a different direction and shortly after they will follow suit.
Be the confident leader and not the follower!