The start of every new year can be challenging for pharmaceutical manufacturers and their brands. As annual deductibles reset at the beginning of the year, patients become increasingly cost-sensitive when filling their medications – which decreases the number of claims for branded drugs. Those in the pharmaceutical industry call this effect the “January claims drop.”
In addition to deductibles resetting in January, patients can also face an increase in their branded drug’s price if the annualized price of their drug increases. Additionally, PBMs can change their drug formulary in Q1 and new entrants in the market can increase competition in the start of the year – meaning higher prices for the patient. All said, many factors can lead to higher consumer prices for drugs and thus a loss of patients for brands at the beginning of each year.
To understand more about the January claims drop – and how pharmaceutical manufacturers can stabilize branded claims during the beginning of the year – Truveris studied claims information from December 2019 to January 2020. Here’s what we found – and what it means for your brand’s adherence.
Certain therapeutic categories are especially susceptible to the January claims drop
In order to understand the impact of the January claims drop on branded drugs, Truveris’ data science team inspected how brand volume changes at the onset of a new year – compared to generic volume.
In January 2020, Truveris’ analysis showed that monthly claim volume decreased by 14% for branded drugs, but decreased less than 1% for generics. This significant drop in claims for branded drugs was observed in claims for both 30 and 90-days supplies. For 90-day supply brands, there was a 25% decrease in claims, compared to a 6% increase in 90-day supply for generic, non-branded drugs. These findings reflect the efforts of payers and providers to curb patient brand use at the beginning of each year. For example, this data shows that while there was a sharp decrease in branded claims during January 2020, generic claims were increasing.
Truveris also studied how specific therapeutic categories are impacted by the January claims drops. The findings show that some therapeutic categories are much more susceptible to brand claim decreases during the start of the year. Specifically, contraceptives, proton-pump inhibitors (to treat heartburn), thyroid agents, and anticonvulsants (to treat epilepsy) all show significantly lower branded claim volume compared to generic claim volume. These four categories need to plan for a much more dramatic January claims drop than other therapeutic categories, which might feel less of an effect.
How should brands manage the impact of the January claims drop?
Truveris’ analysis highlights an annual market-wide occurrence at the beginning of each year that can weaken a brand’s usage. Targeted patient access strategies can help brands better prepare for and mitigate the impact of the January claims drop. Truveris clients have been successful in optimizing the January claims drop by implementing the following three strategies.
1. Create a custom copay offer for January – and adjust quickly
To stay agile and successfully navigate the January claims drop, it is imperative that brands have the ability to make updates to their copay assistance programs quickly. Truveris’ account management and data science team optimize copay program business rules multiple times throughout the year to adapt to deductible shifts and other market dynamics. With this approach, brands have successfully mitigated the January claims drop by implementing a more generous copay offer at the beginning of the year, and modifying the benefit later in the year. Some brands have used this approach to craft personalized offers that in fact drove increases to claims made in January.
2. Offer patients a 90-day supply – before the start of the year
Converting patients from a 30-day to a 90-day supply is always a best practice to drive adherence – but this strategy can be especially effective at mitigating the January claims drop. A patient who fills their 90-day supply in December can continue into the subsequent year without the need to make any fills in January, when their deductible may be higher. A brand can also choose to promote a compelling copay offer on 90-day supplies during Q4, while keeping their 30-day supply targets steady. Truveris clients have found success achieving a 90-day supply transition with tiered copay programs using innovative copay assistance technology. In addition, to successfully transition 30-day supply patients to a 90-day supply, many brands use a patient messaging program to directly contact the patients about this shift. For example, brands can communicate to patients about the additional savings they would receive if they transition to a 90-day supply. Using this strategy, a Truveris client was able to increase 90-day supply claims in their copay program by 4% while keeping overall claim volume steady.
3. Control the messaging with a real-time benefits check
Truveris has been studying patient engagement habits for over a decade and this research has shown that patients who understand the cost of their branded drug are more likely to fill – and continue filling. Because patients are aware that their deductible resets each year, they are more likely to seek prescription cost information in the beginning of the year. To support this effort, brands can offer their patients a real-time benefits check tool. With real-time benefits checks, patients can access transparent price information, and brands can segment their patients and message patients with a deductible differently than those with a flat copay. When patients know what they will pay out-of-pocket prior to going to the pharmacy, they are 25% more likely to fill their medication.
The methodology for this data analysis: Truveris’ data science team inspected how brand volume changes at the onset of a new year compared to generic volume. We investigated claim dynamics between December 2019 and January 2020 across a wide range of therapeutic categories. Brand and generic claim volume was investigated at an overall level and within the therapeutic classes. A national sample of claims from our proprietary data warehouse was used. We compared brand claim volume to generic claim volume and looked at common therapeutic classes. The data was also segmented by days supply (DS).