Picture this hypothetical, but common, situation: It's a typical Monday morning at the clinic, and Dr. Smith writes seven prescriptions for his patients. Of these, only four are being filled with the brands he prescribed and end up in patients' hands. Up to this moment, the marketers of these products did everything right, including significant investments in physician and patient education and managed care.
As the result of the high copay, the payer rejected one scrip and another was swapped for a competitive product at the patient's request. Furthermore, one scrip was actually refused by the patient at the point of purchase.
Patients across geographic and therapeutic areas are increasingly refusing their approved prescriptions due to higher copay costs and non-compliance, a phenomenon known as reversal or abandonment. Brand managers must have deeper analytic insights at the physician level in order to implement more effective strategies to tackle this increasing problem.
According to a recent Wolters Kluwer Pharma Solutions analysis of the US pharma market, prescription abandonment increased by 34 percent in 2008 compared to 2006 (from 5.15 percent to 6.8 percent.) Analysis of the top 10 therapeutic classes based on 2008 retail prescription sales reveals that patient reversals are happening regardless of drug tier, often at a rate that is as high as, if not higher than, health care plan rejection rates. When you combine these two forces, pharma companies are looking at millions in lost revenues daily across a wide spectrum of brands and therapeutic classes. (See chart 1).
Know the "Hot Spots"
Many marketers assume that higher copays equate to higher reversal rates. In fact, research shows that patient sensitivity to pricing varies by geography and therapeutic class, and some abandonment "hot spots" are in areas where copays are the lowest.
A case in point is the rescue inhaler market. A 2009 Wolters Kluwer Pharma Solutions study of the top 10 albuterol inhalers found that several brands lost more than 15 percent in revenues when factoring in the 6.9 percent of prescriptions denied by health plans and the 8.3 percent abandoned by patients.
Logic would dictate that the volume of abandoned prescriptions increased as the copay amounts increased across regions, especially among new prescriptions. In many cases that was true. However, applying advanced analytics at the regional level revealed important and surprising insights about patients' copay responses, and that average cost—which varies by geography—is only a piece of the equation. (See chart 2).