The mindset of most pharma executives and brand managers is to start off with the best copay program possible for a launch brand. Most translate that to mean the copay program with the lowest patient out of pocket. Looking at the current marketplace for copay programs, they will see many brands launch with a $0 copay offer and they may strive for the funding to get there.
While finding the right copay program structure is imperative for your launch, a $0 offer is almost never the correct starting or ending point. In looking at thousands of programs across the industry, we see that the $0 offer performs similarly to offers of $5, $10, or even $15. Many have speculated why brands get less when subsidizing more (this can be a lot more to get your offer down to $0). One school of thought is that a $0 offer sets a bad precedent in the patient’s mind. Free is free and cheapens the brand’s value. Then, when you want to raise the face value of the offer to something more than $0, it becomes difficult for the patient to accept.
Keep in mind, a $0 face value also depends heavily on the cap which is offered. Many caps are not sufficient to get patients to a $0 OOP cost. This creates an issue when the patient who was expecting to pay $0 is told they have to pay more, and sometimes substantially more. The interesting thing is they may have been willing to pay that $30 OOP cost before they saw the $0 offer but now it’s an outrageous amount. Rule of thumb is that your cap should be enough to cover 85% of your commercial patients to the advertised number.
The $0 OOP offer is the easy way out for brands too afraid to read and understand the historical data. Brands may think they can always raise the price later, however when the launch timeframe is over and they try and bring the face value up to, let’s say, $10, patients seem to react very negatively. Those same patients, if started at $5 or more, would react less when their OOP is increased slightly later on. After all they are used to paying something, now with the new offer it’s just a little more. You would think that the lower you go the more trial and adherence you will see…but studies show that is not the case. Starting your offer at a zero-face value does not guarantee increased patient trial or adherence… a true fact you should ponder seriously before setting your offer for your next product launch. For most brands it’s just pouring money down the drain resulting in a poorer net margin than necessary!