Which Ingredients Create a Brand’s Best Co-pay Partner?

Co-pay assistance programs are not without controversy, but despite all the talk, the use of these programs has only increased. When Zitter Health Insights last examined co-pay offset programs in early 2015, they found 708 brands were using such a program in the winter of 2014—compared to 440 in the summer of 2012.

So co-pay programs clearly remain an important tool in a drug manufacturer’s arsenal. But what should companies actually look for in a co-pay vendor? PM360 asked 10 experts what companies need to know when seeking partners to offer more affordable care to patients, including:

  • How do you determine what savings offer is best for a brand? What types of offers typically work best? How does the strategy differ between specialty medications vs. products for more chronic conditions?
  • With the increase of potential channels, how do you determine what channel strategy is optimal to ensure the best reach for your co-pay program?
  • How have changes to reimbursement models and other payer reform, such as the increase of co-insurance and high deductible plans, affected co-pay programs? Are there any changes pharma should pay close attention to in 2016? How can pharma ensure it remains compliant with private, state and federal payer guidelines?
  • What metrics are best to determine if the program is working? How quickly or often should you adjust your strategy based on the metrics you track? What is the best way to measure the ROI of these programs?
  • How can we expect co-pay programs to be different in 2016 and beyond?

Danita Florez









Healthcare is continuing to shift more cost to patients through high deductibles and co-insurance. As the “Cadillac Tax” gets closer to implementation, the number of patients enrolled in a high deductible plan will continue to increase. This shift will make it difficult for many patients to afford their medications. Past trends have indicated that in the first quarter of the year, patients become less compliant due to deductibles being reset. Co-pay cards will help patients offset some of the costs, but with the monthly limits set on many programs, numerous patients will still struggle to pay for their medications during their deductible phase.

Annual vs. Monthly Limits

It’s important for pharma manufacturers to evaluate their programs to determine if a shift to an annual limit versus a monthly limit will increase adherence by assisting patients through the deductible phase. This evaluation should include reviewing your competitors’ offers and ensuring your program will get patients close to, or better than the out-of-pocket costs your competitor offers, to prevent medication switching.

It’s equally important to conduct an ROI on your current program comparing the increased number of prescriptions for patients using a co-pay card program versus patients not using a co-pay program. This will provide you with the value a patient using your co-pay card receives and will assist in the evaluation of the maximum value you can afford to offer with your co-pay card program.

Chris Dowd









2015 saw the biggest jump in co-pays from the previous December—up nearly 30%. Typically, as patients meet their deductibles, average co-pays decrease through the spring and then spike mid-year as co-pays rise again.

However, we saw a different dynamic in 2015 (see graph below). Spring co-pays did not drop as much as the previous two years, potentially indicating that patient deductibles are rising and many are not meeting them. Additionally, instead of a mid-year jump followed by a fallback, the average patient co-pays at retail pharmacies actually climbed. In the previous two years, patient co-pays ended the year at their lowest level. In contrast, 2015 co-pays were roughly the same at the start and end of the year.

f4_tt_figure-1The bottom line: Patients are dealing with significant increases in drug costs. It’s not surprising then that they would actively search for financial assistance to stay on therapy. Indeed, in 2015 the percentage of co-pay claims coming from patients using consumer-directed Web-based offers increased substantially as a percentage of total claims.

Anti-Kickback Protection

The federal Anti-Kickback Statute (AKS) stipulates that when a person is covered by a government health plan and benefits are paid by the government, the use of pharmaceutical co-pay cards or patient savings cards is not permitted. Any violation of this provision could result in significant fines.

In their primary effort to comply with this AKS provision, key industry stakeholders have relied on one or more of several plan identifiers listed on a patient’s insurance card. These include the Plan ID, Payer ID, BIN (Bank Identification Number), PCN (Processor Control Number), and Rx Group number. Yet, recent estimates suggest that 15% to 20% of government beneficiaries illegally receive co-pay benefits in violation of the AKS.

In response to this continuing challenge, the industry is working to develop eligibility verification methods that go beyond the BIN/PCN/Group ID data in the NCPDP system. For example, one new methodology sorts and collects person-specific data points from up to 1,000 disparate data sources to ascertain whether a specific individual is participating in any government-run health insurance program, and then blocks ineligible individuals from receiving benefits.

Cathy DuRei

f4_tt_duReiUnder the ACA, the U.S. is gradually, purposefully changing system goals/alignment towards patient engagement and proactive, healthy activity—not reactive treatments.

Medicines can help with that by treating disease and keeping patients out of expensive hospitals. Many patients now pay attention to costs and rely on coupons for their medicines. It’s not radical to predict that for 2016 and beyond, medicine companies will continue assisting patients.

But for which medicines, which patients and how specifically will Rx coupons be provided? No doubt, specialty medication manufacturers will continue to provide substantial support to appropriate patients. In the ACO era, payers, providers and employers are increasingly savvy about costs and coupons. Medicines that have clearly demonstrated positive and superior health outcomes, with reduced hospital admission rates, may become most popular for Rx cost offsets. EHR data is now plentiful and can be used to identify these medicines.

The Need for Coupon Safeguards

Companies need to continue paying close attention to exactly which patients receive coupons via the pharmacy supply chain. An effort tied to www.NCPDP.org led to a wake-up call for pharma—more can be done to eliminate usage of coupons by Medicare or other federal beneficiaries. The OIG-issued report (http://1.usa.gov/XIVrg1) which spurred the NCPDP initiative, cites error rates of 6% to 7% in improper utilization. In response, pharma will likely install new coupon safeguards, whether in pre-screening/enrollment, at the pharmacy, or during claims adjudication on the back end.

Other themes to watch for tie to technology, with ePrescribing and texting data loops becoming more common. eRx coupon content may someday be conveyed from prescriber to pharmacist as structured data, to ease use of this efficient mechanism while also allowing edits/blocks against inappropriate usage. Coupons may get worked into multi-stakeholder care coordination platforms for patients. Keeping patients front and center throughout is key to success.

Steve Stefano

f4_tt_stefanoRecognizing the increasing burden being placed on patients, pharma companies are setting up pools of money in not-for-profit co-pay foundations to help defray the cost of medicines to the various patient populations. For instance, say a drug to treat cystic fibrosis comes with a $15,000 annual out-of-pocket price tag for the patient. In almost all instances such costs dictate a need for financial help. This is where the co-pay foundations come into play. To ensure the success of this financial assistance effort, pharma companies now also contract with hub centers that essentially serve in a triage effort, helping the patient locate money to assist with their co-insurance expenses.

But two major trends are putting pharma under a lot of heat.

1. All payers are now following the example of the big PBMs—Express Scripts and CVS/caremark—in establishing exclusion lists. This means launch drugs most likely won’t be eligible for reimbursement right out of the chute and may not be reimbursed until they are reviewed.

2. Big payers are also no longer tolerating the huge price hikes that have been occurring when new companies pick up old brands from big pharma. Payers are now writing clauses in their contracts that within any given contract year, a price increase must remain within single digits.

These trends mean that pharma must rely on innovation and value, growing its business through increases in prescriptions rather than price. New drugs must really make a difference over offering an incremental advantage, and resulting profit margins may be thin.

With that said, we don’t see an immediate change in co-pay programs other than they will keep growing and hub centers will be instrumental in aligning patients with co-pay sources.

Pharma has built models that are working today and are going to work going forward.

Marc Migliorini

f4_tt_miglioriniThe traditional distribution channel for co-pay cards is through the commercial field force. It is an integral part of the rep’s sales detail. However, it presents potential pain points to the marketer, such as impacting marketing budgets, the ability to reach no-see prescribers and white space management, and poor trackability on card distribution.

Marketers may look for non-personal strategies to combat these challenges, creating the need for alternate distribution channels (e.g., pharmacy POS, ePrescribing). While these channels help address these challenges, it is important for marketers to ensure promotions reach the desired sales target. With numerous pharmacy switches and more than 600 EMR/ePrescribing vendors, reaching sales targets may be difficult. This can lead to disappointing prescriber reach and card utilization rates.

Any successful co-pay supplier needs to be able to help its customers identify the most effective promotion channel. One way this can be done is by matching a customer’s sales targets to identify which EMR/ePrescribing software is used by their sales target. This enables pharma companies to more strategically partner with software suppliers where most of their targets can be reached.

Another method that can help identify the most effective promotion channel is by leveraging claims processing data. For example, a promotion within the ePrescribing workflow may not be effective for a cardiovascular drug (versus dermatology), given prescriber behavior. Likewise, a Web-based promotion may have greater utilization/redemption rates versus a pharmacy POS promotion for an asthma drug. Perhaps the greater opportunity rests in helping marketers better target prescribers based on overall brand value. Examining a history of claims data can identify prescribers within each disease class with the greatest card redemption rates.

These types of data metrics can serve as the framework for multichannel marketing recommendations, enabling customers to design the optimal promotional mix, achieve better outcomes, and deliver greater margin back to the business.

Doug Gabbard

f4_tt_gabbardReducing a patient’s out-of-pocket medication cost is a pretty simple concept, but the factors behind any one patient’s needs are much more complex. Instead of expecting significant change in the programs themselves, we should pay attention to the evolving environment in which the patients (and these programs) exist. If we continue to focus on and understand where the patient’s needs are coming from, we can better understand how we can help them.

Free Trial Vouchers

A good example of this is the growing trend toward “non-sampling” offices. Whatever the reasons may be for an office to ban product samples, there is still a need to allow patients a supply of medication to test for tolerability and efficacy. A free trial voucher performs the same way today as it always has, however now the market around them has evolved such that free trial vouchers are starting to play the role of “product sample.” Some physicians may even require them in much the same way as we’ve seen with samples over time.

I like to think of these as a tool or resource, like a screwdriver. The value of a screwdriver is defined by the need. Did you know that you can use a screwdriver to do all sorts of things that have nothing to do with turning a screw? You can use it to prop a door open or even to help open that box on your doorstep sealed with tape that is seemingly impossible to break. Don’t think about what something is called. That will only limit your ability to see what something can do once you understand what it does. Seek first to understand, then the solution will be easier to identify.

Reagan Tully

f4_tt_tullyAs we move further into 2016, patients and physicians face increased pressures. This will require greater attention from manufacturers in terms of how they become part of the solution to improve both access to medications and patient support. For manufacturers determined to address challenges with effective impact to patient co-pay and adherence programs, consider these important trends when selecting a co-pay partner.

More High Deductible Health Plans (HDHPs)

Approximately one-third of patients in deductible plans reached their deductible limits in 2014. Expect further decline as more patients are moved to HDHPs as a result of the ACA. Of note: Abandonment rates in HDHPs are 60% higher for branded drugs than those with standard plans.

Manufacturers must identify a strategic partner that will help devise and support a benefit optimization strategy that considers the change in financial burden for patients, while driving revenue and protecting margins. Additionally, to assist patients in navigating change to benefits, especially in the early months of the year when abandonment is the greatest, ensure your partner can provide integrated outreach services that identify and connect with patients lapsing therapy who may need additional support.

Value-based Medicine

The market continues to drive toward ACO/PCMH models, including the ability to measure and incentivize performance. ACOs and practitioners are looking to partner with organizations that can help them reach (and measure) their quality objectives.

Manufacturers will want to consider a partner who provides strategic and operational support across multiple channels for non-traditional providers including pharmacists, patient educators and health coaches, to more effectively drive advocacy, adherence and patient education/support. Additionally, ask your current/potential partner how they are assisting in providing a comprehensive co-pay program with supportive materials and positive patient outcomes that will help ACOs/providers in meeting their performance metrics now—and in the future.

Guy Payette

f4_tt_payetteCompanies in the financial assistance space should be able to evaluate a manufacturer’s product and provide a tailored co-pay strategy based on factors that influence product access and adherence. Product characteristics that could be considered include cost, current market landscape, provincial regulations and the brand’s lifecycle. The ultimate goal is to deliver customized financial assistance programs designed to meet a patient’s specific needs by reducing cost, providing access and maximizing adherence.

Patient Financial Assistance card offerings are increasingly seen as a competitive strategy for manufacturers. The technology can be seamlessly integrated into existing patient assistant programs and used for additional service offerings, such as adherence tracking, as well as enabling integration with electronic medical records for direct contact with patients, pharmacies and physicians. Overall, Patient Financial Assistance cards should not only support access to the medications patients prefer, but also create efficiencies in the patient journey and overall marketplace.

Effect of Payer Reform

Most payer reform is focused on finding ways to reduce the cost of prescription medication programs to insurers and governments, such as limiting access to formulary coverage or increasing the patient’s share of the cost. It’s important for pharma manufacturers to be aware of how these changes may result in new products with limited or no third-party insurance and ultimately impact a patient’s ability to afford and access medication.

It is likely that 2016 will bring growth in the utilization of patient assistance programs by manufacturers to increase access to medications as they position products for commercial success. Financial assistance card suppliers should be continually monitoring the changing reimbursement environment to provide updated client recommendations based on the latest regulations, while also considering the loss of exclusivity strategy, which is critical to each brand’s success in the marketplace.

Devin Paullin

For more than 20 years, co-pay programs have driven incremental revenue and ROI that can exceed many tactics in the brand POA (run a matched-pair analysis if in doubt). Yet brands haven’t capitalized on expanded channel distribution outside of standard field sales! Crazy, right? Why leave money on the table?

Brand managers and sales force managers will confirm that doctors’ offices tend to remember to hand out co-pay offers to less than 20% of eligible patients! It’s not their fault. The sample closet is not exactly present-in-mind or relevantly located at the point of prescribing and sale. Even with low patient involvement, these programs are one of the highest script generating opportunities in your marketing arsenal.

You can still be a hero! Innovative brands are using combined strategies of multichannel non-personal (Web/mobile/email), ePrescribing/EHR, and direct shipment distribution to dramatically increase HCP access and delivery to co-pay programs. Those efforts have proven to quickly drive patient starts for launch brands, maintain growth with mid-stage products, and slow revenue degradation in mature brands or post loss of exclusivity (LOE). Insist that your co-pay partner presents an optimized channel distribution and access strategy for HCPs and patients at the following teachable moments:

  • Point of prescribing (EHR).
  • Point of sale (pharmacy intervention).
  • Point the patient needs to consider continued therapy and re-fill.
  • Also, match your target universe to their network (you should be able to see not only how many of your physicians are accessible, but how many co-pay driving transactions you can expect).

Non-personal promotion channel options are creating awareness, frequency, and new coupon redemptions in “called” and “non-called on” audiences. They can reinvigorate brands facing generic intrusion—without sales support. Don’t let budget be a barrier either! A good partner can identify risk share options to minimize your cost and maximize reach. Embrace it! Your competitor likely has.

Dan Sontupe

f4_tt_sontupeA common tactic that creates the largest divide between pharma companies and health plans in the U.S. is the co-pay card. Health plans use co-pays to drive use of specific products for clinical or financial reasons.

Co-pay cards weaken formulary controls and directly impact rebate structures and management goals, while making product choices harder for physicians. However, healthcare reform is driving reimbursement from fee-for-service to fee-for-value, which in turn drives value-based strategies such as episodic payments. Isn’t now the time for pharma to think about working with the health plans to drive reduction in co-pays?

The value of co-pay reductions is the essence of Value-Based Insurance Design (V-BID). While co-pay programs can help lower patient out-of-pocket costs, V-BID is designed to achieve true value and savings by improving patient outcomes.

We can reduce unnecessary hospitalizations, ER visits and doctor office visits by working with plans, integrated delivery networks and accountable care organizations to provide patient cost relief, which drives adherence, and provide tools to help patients take an active role in their treatments. This will improve patient experience (one arm of healthcare reform’s triple aim), reduce costs for both the health plan and patient, and drive revenue for the manufacturer through adherence.

Outcomes-based Contracts

Similarly, manufacturers and their customers need to go beyond co-pay relief and consider contracts with aggressive use of newer therapies. Outcomes-based contracts stress appropriate brand positioning on formularies, regardless of cost, to drive lower medical costs linked to hospital admissions, transplants, ER visits, etc.

Changing the conventional thinking toward improving outcomes using innovative tools will help improve the overall value of the brand. It’s time to change thinking from the combative co-pay card war to working together to reduce costs and drive outcomes.