Bringing analytic rigor to pharmaceutical couponing programs

Knowing how doctors, patients use coupons helps PSKW grow pharmaceutical marketing business 140% annually

PSKW has dramatically increased its business by providing the one service other pharmaceutical marketing companies often skip: analyzing exactly how the coupons they create for clients are used by physicians and patients. By tracking return on investment by physician, region, drug and program, the midsize company has grown its business 140 percent each year for the past three years.

"We are bringing the same rigor to the coupon industry that pharma has used to measure the effectiveness of detail (sales calls) and samples. No one had ever done this before," explains Robert Caprara, Chief Methodologist for PSKW. "This provides a differentiator for our business."

You need tools to turn data into knowledge. I've never seen anything as flexible and powerful as SAS for doing that.

Bob Caprara
Chief Methodologist

Finding a more efficient way to market prescription drugs

Pharmaceutical coupons are a less expensive alternative to sending detailers (drug reps) to physicians' offices with boxes of free samples. For companies that sell branded drugs, the coupons help grow market share. If a generic equivalent becomes available, coupons help the companies maintain market share.

Before PSKW started its two-person analytics department, the company created and deployed coupon programs – but didn't track outcomes. When Caprara began consulting with the company he realized PSKW was sitting on a data goldmine. "We have coupon usage data for more than 450,000 physicians. We had data for thousands of (coupon) programs on tens of millions of patients."

Caprara began mining data and brought in another programmer to deploy SAS® Business Intelligence for Midsize Business so business users have access to the mined data. "We didn't want to be the bottleneck," Caprara explains. He recommended SAS to company executives because of its strength in merging data from multiple sources.

Matching coupons to ROI

When Caprara first started with PSKW he discovered that the norm in the pharmaceutical marketing industry was a "pray and spray" approach to sending out coupons. That might have been fine in the beginning "but it's grown to be several billion dollar expenditure by pharmaceutical companies," he says. "Today, instead of us just asking 'How many coupons do you want printed up?', it's now an analytical sale. We analyze their targets and make recommendations before the coupons are even printed."

Coupons are designed so that when they are redeemed PSKW knows when, where, how and which doctor prescribed the drug. By incorporating other data on prescriptions, it can tell its pharmaceutical clients whether physicians continue to prescribe the drug even after the coupons ran out, and whether patients refilled prescriptions. From there, pharmaceutical companies can get a better sense of which physicians' offices respond to coupons and which patients might need follow-up coupons to continue filling a prescription.

Caprara also assesses coupon programs with ROI studies. He says for most programs, the ROI ranges from 4:1 to 12:1. More important than the financial return is the strategic information that PSKW provides to inform further promotions. This includes:

  • Measuring efforts to retain market share when a drug loses its patent. By analyzing the results from various coupon trials, PSKW helps branded drug marketers understand what price point helps its drug stay competitive with a generic drug. "Coupons allow patients and physicians to have the option to stay on a branded therapy that is working for them. We often see market share erosion stop and even reverse itself versus generics when this option is made available,'' Caprara says.
  • Analyzing the benefit of placing coupons with pharmacists who offer them to customers concerned about the cost of a drug. This reduces the chance the customer will call back to a physician's office requesting a different drug.
  • Identifying physicians that are most likely to prescribe the drug if they have a coupon/free sample, along with determining which drugs will benefit from having a coupon. For one client, there was 40 percent uplift in drug prescribing when PSKW helped them target the right physicians. "We did one analysis that showed that for every coupon that a doctor uses, he is writing four or five other prescriptions. That was a deciding factor in keeping the program,'' Caprara explains.

The analysis work has been so well-received that PSKW is growing by word of mouth within large companies – one brand tells another brand about PSKW's work. "We've averaged 140 percent growth every year in coupon usage since 2009 and it doesn't appear to be leveling off," Caprara says.

"Our clients have a ton of data. They don't want any more. What they want are insights and wisdom," Caprara says. "You need tools to turn data into knowledge. I've never seen anything as flexible and powerful as SAS for doing that."

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Challenge

Measure the ROI of coupon programs for pharmaceutical customers.

Solution

Benefits

PSKW analyzes the effectiveness of coupons by looking at how they impact prescribing rates and assist branded drugs in maintaining – or gaining – market share when generic rivals enter the market.

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