written by Chris DeAngelis

Few would be surprised that a challenging economy has impacted consumer spending on healthcare. A recent report by IMS on US consumer use of medicines showed that consumer spending on medicine rose 3.7% in 2011 to $320 billion.  Factoring inflation spending was almost flat.  Consumer visits to physician offices dropped 4.7% apparently influenced by interest in saving on co-pays.*

Consumers are squeezed and forced to make choices about products and services they need like housing, fuel, food and healthcare and this is impacting branded drugs.  Payers are requiring that consumers share the burden of  higher co-pays for branded drugs.  Consumers make rational choices when faced with a $40 co-pay for a branded drug vs. a few dollars for a generic version.  Drug companies are going to need to justify the premium for branded drugs by having a clearly understood benefit in the mind of the consumer that justifies the premium.

If the future holds that consumers are going to take on more of the cost burden of generic drugs then it follows that drug makers are going to need to do more research on a variety of key drivers that impact the healthcare spending decisions.  Research on things like alternative dosing–including non-pill options, easier to swallow pills, packaging that is innovative and easy to use, and other differentiators that justify the premium for a $40 branded co-pay.  Understanding the impact of online & social media influences and the impacts of recommendations from trusted sources as well as direct retention efforts and after care activities can create added value in the mind of the consumer.

Let’s face it–consumers are discerning, they expect real advantages and benefits.  They are going to make rational decisions about $40 co-pays.  Advertising and marketing are a piece of the puzzle but ease of use and other previously mentioned benefits will be differentiators for consumers.  Research should play a critical role helping understand patients and caregivers and the dynamics of the reasons why they choose branded solutions in their decisions about out-of-pocket healthcare spending.

How does your consumer see your brand in the contact of their current co-pay amount vs. the generic alternative and what differentiators and value-adds are you leveraging to help make their decision simple?

*Source DTC Perspectives April 6, 2012