As faithful readers will already know, this week we sponsored and attended the West Coast Access and Coupon conference. The three biggest takeaways were:
#1) A wide gap still exists between the leaders in the space and those who are new to the area. While this is natural and a part of the landscape, coupons are becoming too big (estimated to be $13B in aggregate spend by 2019) to leave coupons to the newest members of your brand team. Time to set up a Center of Excellence, if you haven’t already done so, and put as much time and attention into creating and monitoring these programs as you do on Managed Care strategy. In fairness, the members of COEs that I do know from Pharma weren’t in attendance – but this is a problem too, because we need opportunities to get together, brainstorm, and collectively address points #2 & #3.
#2) From our perspective, neither Industry nor the Copay Card providers are taking fraud and abuse seriously enough.
Only one panel covered fraud and abuse, and only at the most basic level. The comment was made that performing audits and excluding pharmacies from the network is the job of manufacturers – which seemed strange to us – as profiting, via volume-based contracts, in situations where fraud is either confirmed or highly suspected, would AT A MINIMUM put the commercial interests of the copay vendors in opposition to their pharmaceutical clients.
We, at ChiralLogic, aren’t lawyers and can’t/don’t provide legal or compliance advice. But suffice it to say that our eyebrows were raised. If we were directly managing these programs, we would provide written instruction to our copay card provider to make us aware, in writing, of any pharmacies in their network either confirmed or strongly suspected of fraud – either for our programs or in their network for another company. We’re also working on establishing a real-time fraud detection capability and starting to think about working with ChiralLogic clients on implementation.
We support human and computer driven monitoring looking for suspicious pharmacy activity. For more information on what we’d look for, please contact us directly.
#3) The industry is losing – losing the battle of contracted access, and losing the battle by bearing the brunt of increased patient out-of-pocket
Various sources, from the companies that report their Gross-to-nets, to ESI’s 1.8% price increase, to the performance of most large pharma and biotech stocks suggest that the tide for price increases has changed and the payers and PBMs have won. The coupon industry is stuck doing things the way they’ve always done them – they’re still focused on coupon aggregators (easily fixed by increasing your cap to avoid the ‘copay surprise’) when the payers are counting their rebate dollars (increasing while access is stable and declining).
What’s needed is new and truly innovative thought. That might come in the form of an upstart copay provider. Innovation might come at the expense of the employers – but from what I’m learning employers and PBMs are innovating FASTER than the industry. Retail will, eventually, win the battle and issue their own copay adjustment vehicles (for obvious reasons they probably won’t be ‘cards’ but they’ll act similarly). Vertical integration means MORE copay aggregation as the payers get increased access to even retail transactions.
So even the innovation edge is going to the payers/PBMs. Coupons and copay cards are here to stay until 2023, at the earliest. Let’s work together to turn this around for manufacturers, patients, and providers.