F135 Why is Medication Price Transparency a Challenge in the US? (Carm Huntress)
Because US healthcare is private and operates by the rules of the free market, prices for services and medications can differ substantially. It is very difficult for patients and doctors to know the medication cost in advance.
Solutions such as GoodRx and Amazon Pharmacy are addressing price transparency for consumers. On the other side are the Real-Time Prescription Benefit Providers which help physicians see drug prices for a specific patient even before that patient leaves their office.
The challenge with knowing how much a drug will cost a patient lies in the fact that different insurance companies have different policies regarding how much they will pay for medication. Patients might have a plan with high deductibles. But it’s not just the provider and the insurance company: prices depend on the Pharmacy Benefit Managers (PMS) - intermediaries that manage prescription drug benefits on behalf of health insurers. PBMs negotiate prices with drug manufacturers and pharmacies.
“CBI insights did a great study on this that showed that about 41 cents of every prescription dollar are going to middlemen, whether that's wholesalers, pharmacies, PBMs, or payers. I think in the next five to ten years, because of where healthcare is going, and because of the desire to move into value-based systems, we will see a compression of that 41 cents. You're starting to see this in niches where you have direct-to-consumer players like Hims, and Hers, and maybe some of the work Amazon is doing. I think that trend is going to continue and put pressure on sort of reshaping the economics of the value chain,” says Carm Huntress, the CEO of RxRevu. RxRevu is a Real-Time Prescription Benefit Provider that works with all the major health insurance companies and hopes to reach 200.000 doctors by the end of 2021. “There’s still a long way to go because there are around 1.3 million prescribers in the US,” adds Carm Huntress.
Carm Huntress.
While some treatments are getting increasingly precise and personalized, they also tend to be very expensive, because they serve a small population of patients. To enable healthcare sustainability healthcare systems around the world are looking at value-based models to contain the costs. “I get a little bit scared when I hear about sort of the next revolution of drugs and gene editing and other categories that are multimillion-dollar cures, essentially. But that's not really sustainable. I've heard crazy ideas such as people having drug mortgages, where they're going to have to pay off a curative treatment over their lifetime. We need to find more rationally value-based ways of approaching these challenges that work for patients, insurers, and employers. It's gonna be a tough road ahead because today it's still kind of the wild west where drugs are relatively priced at whatever kind of the manufacturer feels is appropriate. And we all kind of live with that price. And I do think that has to change,” says Carm Huntress.
When a doctor is able to see drug prices at the point of prescribing, the prescribing process turns into shared decision-making with the patient. He could check which option is affordable for the patient, since if the patient will not pick up his or her medications from the pharmacy, he might be readmitted to the hospital due to a deteriorated health condition, mentions Carm Huntress. “The third of the reason for the abandonment of drugs is cost. There was just a study that came out that showed just a 10% increase in the copay costs to a patient leads to much higher abandonment rates. And the reason for that is when patients are used to paying 20 dollars and all of a sudden that price goes to 50 dollars, they don’t take their medications. The scary part of that study was that this is leading to higher mortality.”
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Some questions addressed:
Let’s start by outlining the environment you work in. RxRevu’s mission is to bring prescription price transparency to every provider across the country. For the international listeners: can you describe how big of a problem is drug price differences in the US?
You are a Real Time Prescription Benefit provider. How many are there? How can for example a patient know his doctor has an access to the drug price transparency tools?
At the moment, drug prices before the final amount the patient pays, are negotiated by pharmacy benefits managers. These are intermediaries that work with drug manufacturers, wholesalers, pharmacies, and plan sponsors. Their objective is to curate pharmacy prescription benefits plan options; and to help patients with greater access to appropriate medications.
How is drug price related to clinical decision making?
In one of your surveys a doctor stated that doctors never know for sure what medication will be covered by insurance until they prescribe it and submit it to insurance. Does it happen that doctors change prescriptions after they get feedback from insurance?
In the US cost of medications can significantly impact medication adherence because if they are too expensive patients might not take their prescribed drug. Why is that not only a patient but also a provider issue?
Unlike company called GoodRx which focuses on giving consumers an overview of drug prices in different pharmacies, RxRevu focuses on bringing price information to doctors before they even finalize a prescription, so they know how much the patient will pay. How does this transparency influence prescription decision making? Do you also offer decision support in a form that you would list generics and their prices or biosimilars to doctors, so they would know which brand is most affordable for the patient? Is that potentially the next step?
How does using RxRevu and other RTPB solutions impact the physician’s workflow? How does it impact the time needed for a prescription or consultation given that now the doctor has an insight into drug prices and can think twice before finalizing a prescription
After the doctor checks drug prices with your solution, does it still make sense for the patients to check drug prices with GoodRx?
What are you plans for the future? What are the challenges in price transparency and broader you still wish to tackle?