Copay levels have increased steadily in most sectors during the last year, and HIRC predicts average copays will approach $10/$25/$40 (1st/2nd/3rd Tier) within two years. Percentage copays appear to be the next wave in pharmacy benefit re-design, as they increase consumerism, provide a stronger financial incentive for use of lower-cost drugs and protect plans and payers from drug budget inflation.

"The increasing use of three-tier and percentage copays is redefining formulary status from the traditional "On/Off" measures to a more complicated matrix of copays and patient price-sensitivity," comments Josh Mader, Research Director for HIRC commented that "In light of these dynamics, pharmaceutical firms will need to retool their managed care contracting and marketing strategies, including: measuring the effect of various copay structures -- and the resulting patient price-sensitivity -- on product demand; refining contracting and product pricing strategies to optimize profitability relative to tiered and percentage copays; and enhancing DTC communications and compliance programs."

The complete 50 page report is based on surveys and interviews with leading Health Maintenance Organizations (HMOs), Pharmacy Benefit Managers (PBMs), and Employee Benefit Managers (EBMs), and Employer Coalitions. The report includes detailed survey and interview results of plans implementation of copays and percentage copays. The report is available only to pharmaceutical firms at a fee of $7,500 or free to firms that purchase three or more HIRC publications.

Health Industries Research Companies (HIRC) was founded in 1995 to examine the trends and implications of managed care and national accounts. HIRC's home offices are in California and it's staff are located in California, Pennsylvania, New Jersey, Arizona and Delaware. HIRC has four syndicated services. Please contact Mr. Josh Mader, Research Director, with any questions at 831/426-5283 or jmader@hirco.com.