MARKET DRILL-DOWN

As is often the case, it’s not a single driver that shapes a trend but rather a confluence of many. Market Drill-Down takes current market data and slices it in new ways to reveal what’s really driving the market.

COPING WITH Rx ABANDONMENT: THINK LOCALLY
By Paula Fullman, Wolters Kluwer Pharma Solutions

This month, we offer a fresh perspective on the trend of prescription abandonment. Some experts suggest that co-pay amount is the most significant factor to influence abandonment. After drilling down to state and local levels, we find that looking at co-pay alone is a bit one-dimensional. In fact, it isn’t the primary market driver in every case.

Before we drill down, let’s look at the national trend. According to a recent analysis of commercial claims by Wolters Kluwer Pharma Solutions, on average, 6.8% of all new branded prescriptions filled by U.S. pharmacies in 2008 were left unpaid at the counter. This trend, known as prescription abandonment, has steadily increased 34% over the past four years.

We found that branded drugs are hit hardest by the trend but generics also bear part of the impact. But what we found that we didn’t expect is that the rate at which prescriptions are abandoned varies markedly by geography and therapeutic class.

As a product manager, what can you do? How can you plot a course that helps reduce abandonment or at least minimizes its effects? The first step is to recognize that looking at a national view is not always enough. Understanding regional and local price sensitivity for your market and brand is critical to deploying resources at an optimal level. For example, if you’re implementing a couponing program, you need to target areas where price is driving abandonment versus other factors that a coupon won’t help.

Your market may buck the national trend as is the case with Rheumatoid Arthritis Biologics (RA Biologics), which saw abandonment decline in 2008, moving from a rate of 28% early in the year to nearly 22% in the last quarter. In this category, only three states are above the national average of prescription abandonment—Florida, Hawaii, and West Virginia.

Contrast the findings for RA Biologics with those of branded Oral Anti-Diabetics (OAD), which showed a slight increase in abandonment for 2008, starting the year at 6.32% and ending at 7.7%. In this class, 11 states are above the national average of abandonment for the class with California, Hawaii, Maine, Nevada, and Rhode Island all coming in above 10%.

As we drill down even further, we start to see that patient out-of-pocket expense alone cannot be used as the single indicator of abandonment. This is especially true when looking only at national out-of-pocket averages. Patient price sensitivity varies by geography and the differences can be quite dramatic at the local level. For example, OAD patients in Chicago have an average co-pay of $38. Patients in Orlando pay $29—an average of $9 less per prescription.

Intuitively, we expect that the Chicago patients will have a higher rate of abandonment than the Orlando patients because the co-pay is higher. However, the opposite is true. In Chicago, the abandonment rate is just under 6%, whereas the Orlando rate is 16%, nearly three times the rate in Chicago. This local-level detail, in combination with integrating two key pieces of information, paints a much clearer picture of local market drivers.

By understanding the entire sphere of influence for your product, you can apply the right marketing strategy to positively impact your product’s performance.

To download Market Drill-Down Tools for this issue’s topic, go to www.PM360online.com/tools

Have a marketing question that requires deep analysis? Email it to Paula.Fullman@source.wolterskluwer.com for her to consider for a future Drill-Down.

Paula Fullman is a Practice Lead with Wolters Kluwer Pharma Solutions, focused on patient analytics. She can be reached at Paula.Fullman@source.wolterskluwer.com