If the dog is dropping too early to cue or immediately upon the removal from the hand, employ a regrab of the disc.
Once the dog removes the disc from the hand, try to take it away from him – regrab it and tug a bit. Keep the same removal from the hand criteria. Do this several times while backing up. This will give him a reason to hold the disc. It doesn’t take too many repetitions to prove that holding the disc is worth his while.