The average price for branded biopharmaceutical products in the U.S. rose by an average rate of 13.5% in 2014 (with a net increase of 7–8%, once off-invoice discounts and rebates were factored in), according to the latest annual spending data released by IMS Health in April 2015 . Overall, spending was up by 13.1% in 2014, reaching nearly $374 billion — the highest level since 2001.
These price increases, coupled with greater cost-sharing obligations for patients — in the form of higher plan premiums and deductibles, co-payments and coinsurance requirements for prescription medications — have created higher out-of-pocket (OOP) expenses for many patients. Similarly, fierce competition for favorable formulary placement has a direct impact on the affordability of branded medications, and patients’ ability to access them.
Coupon and co-pay offset programs provided by drug manufacturers give brand teams a direct way to help address this affordability gap. They are designed to help reduce OOP costs for patients, by capping the cost of the medication for the patient at some fixed dollar figure, or helping to offset some of the co-pay or coinsurance requirements the patient faces.
“Patients feel empowered when they walk into the pharmacy with the card or coupon in hand,” says Graham Lane, Account Manager for Triplefin. “They know what the cost of their medications will be, so there is more certainty and fewer surprises for the patient and fewer abandoned prescriptions at the pharmacy.”
“Similarly, physicians appreciate the ability to address affordability issues by offering coupons and vouchers to their patients at the point of prescribing, as they know that drug affordability is one of the biggest factors impacting patient adherence to therapy,” notes Tom Doyle, Executive Vice President, Commercial Solutions for H. D. Smith Specialty Solutions. “Physicians also appreciate the ‘hero points’ they get when they are able to present these valuable savings opportunities to their patients,” adds Graham.
Room for growth
The overall number of prescriptions for which patients used a co-pay card reached 8% in 2014, according to the IMS Health report, although in some particularly costly specialty classes, such as multiple sclerosis and rheumatoid arthritis have 70% usage of coupons that help to reduce out-of-pocket expenses to nominal levels. This leaves plenty of room for growth.
To date, these programs have proven themselves to be both valuable and effective, for patients and brand managers. High costs are known to be a major factor in patients skipping doses, splitting doses and abandoning their medications altogether at the pharmacy. For this reason, coupon and voucher programs are especially valuable for patients who face the high cost of therapies required to treat chronic conditions. According to the IMS Health report: “Lower adherence is seen at every out-of-pocket level for patients with a deductible, worsening after costs exceed $30. Standard insurance patients showed a substantial decline in adherence if their out-of-pocket cost exceeded $250.”
Meanwhile, for brand managers, coupon and co-pay programs provide a range of benefits. In addition to removing barriers to therapy for patients, these benefits allow physicians to prescribe medications based on clinical— and not cost — considerations. For instance, the availability of a coupon or voucher that makes the medication affordable helps to reduce the pressure to prescribe an alternative therapy that may not be deemed clinically equivalent — such as a different therapy in the same class that may have more favorable formulary status, or a generic alternative — simply because it will cost less for the patient.
Because greater affordability has more potential to drive adherence, it also has the opportunity to develop more robust outcomes data, which can help to drive market share for the brand. This is thanks to more rigorous, appropriate use of prescribed treatment regimes in the marketplace.
“Free trial vouchers, coupons and co-pay programs can also help to speed penetration at market launch, and ensure that patients and physicians are able to initiate treatment during the lag time that often occurs as a result of payer formulary evaluations and prior authorization requirements,” says Tom.
Building a relationship with patients
Another important benefit of these programs is that they provide a valuable, convenient “point of entry” for patients to connect directly with the brand, and access the many types of valuable services and resources that drug manufacturers typically offer (see the earlier article in Triplefin’s newsletter series: “High Touch Hub-Lite® Model Helps Increase Prescription Intake”) to support their branded products, especially costly specialty drugs.
Coupons and co-pay programs typically require the patient to register through an opt-in program, and this gives the brand team the rare opportunity to establish a direct link with the patient. The manufacturer is then able to provide useful, actionable information related to the medication and the underlying condition, and direct the patient to beneficial services. Access to a Contact Center, where they can get clinical questions answered, or get support from trained specialists who can help them navigate complex administrative requirements associated with their insurance program, prior authorization requirements, and Patient Assistance Programs is especially important.
When designing a coupon or co-pay program to support a particular medication, the brand team should consider the following best practices, which have begun to emerge in recent years.
• Design the opt-in process to be simple and effective. Most drug coupons or co-pay cards require patient activation prior to first use (through a website or toll-free phone number). One important aspect of this activation process is to quickly identify patient who are not eligible for the program (such as Medicare/Medicaid patients), due to federal rules associated with these programs.
• Collect and analyze data. “Coupon and co-pay programs allow the brand to collect de-identified patient longitudinal data, and analyze a variety of useful metrics associated with prescription fills and refills, and then compare such data for patients using coupons versus those who are not,” says Graham. Useful metrics may include, for instance, patient adherence, first-fill and refill rates, patient demographics, physician utilization, and the return-on-investment of the program, among other things.
“One analysis that pharma companies like to look at is the average OOP amount for the medication after primary insurance is billed, but before the coupon is applied,” says Tom. “This is helpful to determine the value of the co-pay card program.” Similarly, he adds that pharma companies like to look at patients who abandoned their prescriptions, to analyze price sensitivity at different OOP amounts.
• Choose the best mechanism(s) for patients to use. Traditionally, coupons and co-pay offerings have been issued as paper coupons, dropped off at physician offices by pharmaceutical reps, and at available at retail pharmacy counters. Today, they are also typically available as a downloadable coupon on the brand’s website or other sources. “Innovative methods have emerged for co-pay cards which provide added convenience to the patient, says Tom. “Physical plastic ‘fobs’ (to be kept on a keychain or in a wallet), for example, and bar codes that can be downloaded right to their smart phone, are practical solutions for patients.”
In recent years, the use of both electronic health records (EHR) systems and electronic prescribing has risen throughout healthcare. Today, coupons and co-pay offerings can be embedded in such a way that they are automatically transmitted to the pharmacy when the prescription is sent.
• Consider strategic deployment, potentially focusing on geographic regions where the coupon program will have the biggest impact. Experts agree that brand teams can and should tailor each program, to decide upon a strategic deployment of these coupon and co-pay programs, choosing to focus on certain geographic regions where, for instance, a dominant insurer has created substantial affordability barriers for the brand, or where socio-economic data demonstrates a particular need among the target patient population.
Similarly, the brand team should decide whether the offering will provide a per-fill cap or a yearly cap. “It is common to see prescriptions drop off early in the year, when the patient’s annual deductible has reset at the beginning of each calendar year,” says Tom. “Some coupon programs are specifically designed to offer a yearly cap that can help patients get past the high-deductible wall they may face early in the calendar year.”
“The coupon or co-pay program is just one piece of the brand’s overall go-to-market strategy, and it provides an important call-to-action for the patient. By encouraging the patient to take full advantage of the brand’s full hub offering, it provides one of the only opportunities for the brand team to engage him or her directly,” says Tom, who adds: “When it comes to designing a coupon or co-pay-offset program, there is no ‘one-size-fits-all’ program; you really need to design the program to best suit the current position and business needs of your brand.”