A prescription to help cure high drug costs?

May 25, 2017

Online outlets provide savings, but physician buy-in remains varied

Patients who lack health insurance or have high deductibles for prescriptions can avail themselves of numerous options to purchase medications at a discount.

 

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Doctors whose patients use these services-such as GoodRx, HelpRx and Blink Health-say they provide savings, primarily on generic drugs. But it’s debatable how much help these services truly provide in meeting the challenge of high deductibles for prescriptions.

George G. Ellis Jr., MD, an internist in Youngstown, Ohio, and chief medical adviser for Medical Economics, says he provides patients with information regarding one or more online prescription services and encourages them to comparison shop.

“I’ve got a lot of elderly patients, and I want to make sure they get their meds and are able to afford their meds,” he says. “My concern is taking care of the patients and making sure that patients receive the medications they need at a reasonable cost, so they don’t compromise their health.”

These online services are addressing a very real need, given the variation in the prices of prescription medications, the result of a dizzying series of negotiations among manufacturers, insurers, distributors and pharmacies, says Darius Lakdawalla, Ph.D., a health economist at the University of Southern California.

“At the end of that complicated dance, there ends up being a lot of diversity in the price of what seems like an identical drug,” he says. “More information is almost always better, and here, the case is that more information about pricing is definitely better because there’s so much idiosyncratic variation.”

Leaders of these online prescription services cite national statistics that they say underscore the challenges patients face. GoodRx chief executive officer Doug Hirsch points to figures from the Kaiser Family Foundation that show 29% of consumers were covered by high-deductible plans in 2016, up from 13% in 2010.

And Matthew Chaiken, cofounder and chief operating officer of Blink Health, says figures from the Commonwealth Fund and Kaiser indicate that 70 million patients in the U.S. are either uninsured or underinsured, which he notes can translate to high deductibles and copays. 

The online services provide greater benefits to those without insurance, says Edward Kaplan, senior vice president and national health practice leader at Segal Consulting. Segal’s employer clients have become more interested in finding discounts on drug prices, given that 40% offer percentage-based (as opposed to fixed-dollar) copays and/or high-deductible plans, yet their interest in services like GoodRx and Blink Health has been tepid. 

“We bring them up to our clients,” he says. “We say, ‘You’ve got these firms out there, they’re free, you can promote them to [benefit plan] members and maybe they can be better shoppers. We haven’t gotten a huge amount of interest from HR and benefit directors.”

 

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To the extent individual policy holders might be using those plans, Kaplan notes that their employers would not necessarily know about it. “It’s an individual going onto a retail site and doing their own thing,” he says. 

Next: Understanding the savings mechanics

 

 

Savings Mechanics Vary

The online prescription services vary in the mechanics of how they provide savings. 

 

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For example, GoodRx negotiates specific prices with pharmacies for each medication and ends up offering a wide range of prices for some medications. Patients must take the GoodRx discount code to their pharmacy to get that price. 

In contrast, Blink Health negotiates a single price with the manufacturer for each medication and sells them directly to patients. HelpRx provides a third approach, negotiating a specific percentage discount at one of its 17 participating pharmacy chains, a group that includes Walgreens, CVS and Rite Aid. It also offers the discounts to supermarket and mass merchant chains including Walmart and CVS-operated Target pharmacies.

Ellis believes that, by and large, patients find somewhat cheaper prices using online services than they would by going to a pharmacy. “With the high-deductible plans, patients are struggling,” he says. “I often don’t know how patients are going to be able to buy their meds. They either eat, or they buy their prescriptions.” 

 

Savings Real, But Modest

But the savings on the medications are usually modest, Ellis adds. 

“It’s really difficult to say that any of these companies are making a dent” in high deductibles, he says. “If you look at drug prices, they’re going through the roof. Even the generics have gone through the roof.”

 

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The discounts are not significant, agrees Ashesh D. Patel, MD, a Washington, D.C.-based internist. He adds that the discounts are often advertised as ranging from 10% to 90%, but often they turn out to be at the lower end of that range. 

Kaplan points out that insured patients must weigh the benefits of whatever discounts the online services provide against the reductions already built into the pricing of their employer health plans. “When you pull [prices] up and compare, sometimes it’s a little cheaper, sometimes it’s a little higher,” he says. “You’ve got to go drug by drug.”

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For the most part, Kaplan adds, the services are not attractive to people with solid prescription insurance through their employers, which means Good Rx, Blink Health and the like “are just getting the low-hanging fruit, people who have out-of-pocket costs and high-deductible plans.”

Not all doctors are impressed by the online prescription services, however. Jonathan Weiss, MD, who practices internal, pulmonary and critical care medicine in Monticello, New York, says neither he nor his colleagues in his office recommend them to patients. Patients have not been asking about them and he would prefer to support local drugstores, Weiss adds.

 

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Lakdawalla has a set of suggestions for Hirsch, Chaiken and owners of other online prescription services: “I think it would be very useful if these services began to provide information about value to providers and patients,” he says. “That is, in addition to price, they could begin to compile information about clinical benefits, side effects, modes of administration and other attributes that help patients understand which drugs are right for them.”

Kaplan hopes the online prescription services continue to add value in terms of increased transparency. “They protect the individual consumer from individual pharmacy price gouging,” he says. “That’s their main value-you can get some comparisons.”

Lakdawalla hopes the online prescription companies continue to succeed. 

“There’s a lot of stuff in healthcare that’s complicated. This isn’t complicated,” he says. “Imagine if you were trying to buy a car, and nobody would tell you what you had to pay. It’s a little bit crazy. That’s the system of healthcare.”