There is a major flaw in the way companies evaluate their copay incentive programs and it can cause a brand to overspend.

When it comes time to renew a program, a brand may choose to increase their patient incentive offer intending to increase sales (lower the face value from $20 to $10 for example). The reality, however, is that more aggressive offers may generate more “claims”, but these offers may not deliver the desired impact on “sales”. Unfortunately, more claims don’t necessarily mean more sales, it may only mean more cost. Analyzing copay programs based solely on claims is not a sound analytical practice and may encourage the implementation of increasingly more and more aggressive offers…eventually driving the offer down towards a $0 price point.

Although every brand’s situation is unique having their own price sensitivities, a more aggressive offer typically attracts a very small percentage of additional patients from the higher copay groups unless the cap is also increased. This is because the face value change does not decrease their out-of-pocket cost. That action will actually reward the patients in the lower copay groups who most likely would have filled the prescription anyway.

Your business rules will always exclude certain patients, we call them “Offer Ineligible Patients” (OIP).  Sales from OIP patients are all but forgotten because they don’t show up in your claims data (only in your TRx’s). This is because their fill does not produce a claim. Knowing what is happening to these patients will allow you to make the best decisions about optimal program structure moving forward.

Here is a real-world example. Let’s say you have a PALA $20 offer but your abandonment rate information shows there isn’t much patient script abandonment between the $20 and $30 levels.

Let’s say you moved the face value of your offer to $30 and let’s also say that 5% of your patients have OOP costs between $20 and $30. These patients will now become ineligible for a discount based on your new offer so your claims will now go down by at least 5%. Does that mean your sales just went down 5%? No, absolutely not. The answer to this question resides with the OIP patients.

Will they fill anyway without your copay offer? If their coverage is good and their OOP costs are low, (like under $30) they most likely will. In that case, your proposed change would be a very good move for you. We believe it is critical that our clients understand the OIP patient and their fill probabilities when considering changes to their copay offer.

Alpha 1C’s models track the forecasted takeaway of the OIP patient and allow you to add back in the sales from OIP patients into the analysis to get the entire picture of what would happen and the impact on sales with a proposed change in the copay offer.    

To read more about the OIP patient, please ask us about our free white paper!