Wednesday, September 12, 2012

A New Reality Check on Co- Pay Offset Programs

The Zitter Group recently released the Co-Pay Offset Monitor (COM), an intriguing mid-2012 snapshot of co-pay offset programs.

The research identified 419 co-pay offset programs from 440 unique brands and 131 pharmaceutical manufacturers. In addition to a boatload of benchmarking data, the report challenges some widely-held beliefs about these controversial programs:
  • Only 3% of the 440 brands with co-pay offset programs had a generic equivalent, undercutting a major criticism of these programs.
  • Seven out of ten biologics have a co-pay offset program, compared to only 44% of traditional brand-name drugs.
  • Twenty-four manufacturers sponsored 5 or more programs for their promoted brands.
Read on for the details. Anyone interested in understanding the topic or benchmarking current programs should get access to this research. Indubitably.

THE DATA

The Zitter Group’s Co-Pay Offset Monitor (COM) report identified 419 co-pay offset programs from 440 unique brands and 131 pharmaceutical manufacturers. A co-pay offset program can be applied to more than one brand, and vice verse. There is lots of detailed analysis that describes specific manufacturers’ strategies and patterns across major therapeutic classes.

The report also provides some useful conceptual frameworks, such as a classification of six co-pay offset program types. The report includes interviews and survey research with physicians, patients, pharmacists, marketers, and co-pay program vendors.

The Zitter Group has published the following two short articles about the report:
The good folks at TZG provided me with the full report, but it is not readily available for purchase or download. For more information about the report, email Chris Wheeler at TZG. Tell him that Drug Channels sent you!

A VICTIM OF SOYCUMSTANCE?

I have long been intrigued by the battle over co-pay offset programs.

Payers don't like these programs, believing that co-pay coupons boost brands at the expense of generic alternatives. PBMs are also unhappy because direct-to-consumer discounts via a co-pay offset are an alternative to contracting for access via a PBM rebate. See Wake-Up Call for Co-pay Cards.

At the same time, co-pay programs can be valuable tools in helping employers ensure a healthy workforce by reducing prescription abandonment data. See Co-Payments and Prescription Abandonment.

NOT UNDERMINING GENERICS? OH, A WISE GUY.

Contrary to expectations, co-pay offset programs are not being used to discourage generic substitution. Of 440 brands with co-pay offset programs, only 13 brands (3%) faced a generic therapeutic equivalent.

These data are consistent with the results cited by the Amundsen Group’s Mason Tenaglia in A Defense of Co-Pay Cards. High-profile programs like Pfizer’s Lipitor strategy appear to be the exception, not the rule.

Note that the report did not evaluate whether the brands faced a generic product in the same therapeutic category, e.g., simvastatin vs. Lipitor.

SUPPORTING BIOLOGICS. WOO WOO WOO!

As the chart below shows, biological drugs are much more likely to have a co-pay offset program, compared to a sample of nearly 1,000 non-biologic brands. Specialty drugs tend to be tier 4 drugs and often require patients to make prohibitive coinsurance payments.


Even How Copay Coupons Could Raise Prescription Drug Costs By $32 Billion Over the Next Decade, the PCMA’s major attack on these programs, excused specialty drugs, because “specialty products do not undermine generics and manufacturer price concessions to health plans in the same way that copay coupons on non-specialty brands do.” Sointenly.

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The COM data make an important contribution to the co-pay offset debate. I look forward to updates that track the programs' evolution.

3 comments:

  1. It would be helpful to see an analysis of the copay offset claims (as a percentage of total claims count or revenue for those 440 brands) that have a generic alternative available, in the category.

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  2. Another point of interest that cannot be measured is how copay offsets incent members to utilize brands that are not preferred by PBMs or that generate lower manufacturer revenue (and thus generate lower payer rebates).

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  3. On the point about PBMs not liking them, because they encourage continuation on brands rather than a move to generics, vis-à-vis the TZG study saying that only 3% of the 440 brands being supported by co-pay offsets have a generic equivalent… The TZG chart uses the words “direct generic available” (or not). I suspect the PBMs would argue that a lot more of those 440 brands actually have “therapeutic equivalent” generics available, even if a particular brand is still patent protected. That’s what a lot of the step therapy and generic substitution programs are based on – one or more good medical alternative generics being available in a particular drug class that also has brand drugs in it.

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