Data for Drug Savings

What is something employers don’t understand, but should, about their prescription drug costs?

ERIC LEVIN: Most employers make the mistake of thinking they’ve negotiated a contract with a PBM [pharmacy benefit manager], so the PBM is going to do everything they can to keep costs low. But that’s not their job. Their job, as a company, is to make as much money as possible off of you. That’s just the capitalist system. There’s a lot of discussion about transparent PBMs versus traditional PBMs, but at the end of the day, PBMs really just determine how drugs are priced through the benefit plan design and what drugs are going to be paid for by you on your formulary. And there are decisions being made every day by doctors and with plan members that aren’t necessarily optimizing for cost.

How does Scripta’s drug navigation platform offer additional insight for employees at the pharmacy counter?

LEVIN: We believe we add a really thoughtful decision layer on top of what you’ve already put in place as your [prescription] plan design. No matter who your PBM is, no matter what your plan design is, there’s always going to be people making decisions as to where they’re going to spend. Employers give you a deductible so you have skin in the game and make better decisions, and we can help the members do that.

How common are copay coupons—discount programs for insured consumers who buy a brand-name drug directly from the manufacturer—and how much can consumers save using them?

MIRIAM PARAMORE: Overall, there is potential for about $30 billion in savings a year through these coupons, and most of it goes unused. With our 1,300 brands [on the platform], which don’t have a generic equivalent, there are about 1,800 coupons. Most coupons bring the price down to between zero and $25. For a drug like Skyrizi, which is a very popular medication for rheumatoid arthritis and other autoimmune conditions, the out-of-pocket cost can be around $1,000. With a coupon it’s about $5. Not all savings are that dramatic, but at least consumers have the option to see them.

Could that kind of price jump be the difference between someone taking their medication or walking away from the pharmacy counter?

PARAMORE: The abandonment rate at the pharmacy counter starts when the patient is looking at more than $30 out of their pocket. People are much more price sensitive than you might think. About 90% of prescriptions are generic, which means they’re low dollar. Most of the time when I go to the store, I’m getting a drug for around $10. It doesn’t mean that everyone is walking away at $30, but research shows that’s the point where people go, “I don’t know about that.” And many either don’t get the pill, or they buy them and split them to make them go farther.

RxUtility also provides the cash price of drugs, which is often difficult to pinpoint, right?

PARAMORE: Depending on the report you read, between 11% and 15% of all prescriptions that consumers buy are paid for by cash. There isn’t just one cash price; so, the question is, what’s the cheapest?

Last year, I had eye surgery and needed special eye drops that weren’t covered by my insurance. They cost $57, and I figured I could get them cheaper, so I manually searched every cash price vendor’s website. I found those same eye drops could be $15, $37, or $57 if I was Eric Levin paying cash, depending on the pharmacy.

There are a whole bunch of vendors like GoodRX, BuzzRx, and BlinkRx that have cash prices. We aggregated all of them and made them available to be part of this knowledge set. We believe that we have every price for every drug at every pharmacy in the U.S. Cash prices are dynamic. Literally, they change throughout the day on every drug, and we have a real-time feed.

The prescription navigation platform gives people information they can discuss with their doctor or pharmacist to get the best price when they fill a new prescription. Is that where employers see the most savings?

LEVIN: No. What happens is that we’re mostly pattern-disrupting refills. When a [large corporate] client starts with us, they’re already spending $100 million [on their prescription drug plan] a year, so the next drug that gets filled is very important. But if their trend is a 10% increase each year [in drug spending], about 85% of that is refills. So, it’s less sexy than opening your app at the pharmacy and negotiating a better price—everybody loves that story. In reality, the money is already there in this refill cycle. And pattern-disrupting refills is really where you generate the bulk of the savings and start to bend your spending trend.

How do you catch people who have been taking medications for years, maybe, and disrupt that cycle?

LEVIN: We do a lot of outreach to [clients’ plan] members. They get a savings report from us that’s personalized. We can send them by snail mail, email, and text. The savings report says, “Eric, you take these three drugs, and if you consider switching two of them to one of these alternatives, you could save $100 a month.”

Sometimes it’s more campaign-based. We may identify a cohort of employees who are on a certain drug, and a generic version [of it] is coming out in a couple of months. We’ll start reaching out to them, letting them know to talk to their doctor, because if they switch they could start saving, maybe, $800 a year out of pocket. And now they have that information. We really do think of ourselves [as being] in the information business. We’re not in the stick business; we’re in the carrot business.

How effective is this information in getting people to change their medications?

LEVIN: Some people may not care; they are happy to spend that money because they are comfortable with their medication. But a lot of people are going to switch, and it’s for two reasons. Some people are feeling the pinch. They’re finding their medicine too expensive. But it’s not always just people who can’t afford things who are price sensitive. There are people who just don’t like overpaying. They will save $400 a month if they’re getting literally the same medicine. It just feels wasteful.

There’s a lot of room for employers to optimize. We’re typically going to find 30% to 40% savings opportunity. That does not mean we’re going to capture all of that—that’s if everyone switched their medications, and not everyone is going to, nor should they. There may be good reasons to stay on their current medication. But we do know that a certain percentage will switch, and across our book of business last year we generated about five times ROI for our clients.

What about GLP-1s? That’s an area where no one seems to be able to get a grasp on pharmacy spend.

LEVIN: We’re doing the best we can. The reality is there are not a lot of great options out there. Generally, you either have people not covering them at all, or they’re covering them and trying to control the cost. So, we do a couple of things. One is we have a GLP-1 buyers’ guide that’s built into our app, and it’s the No. 1 most visited part of our product. We did it because I had a family member who wanted to start GLP-1s and they weren’t covered. I was trying to navigate the internet to figure out the best deals and I was overwhelmed. So, we created a buying guide and we update it constantly. We provide the best programs to pay for them.

We also have a partnership with RXSaveCard that does a cash-pay carve-out program. Right now, we think that is the best program on the market, because the cash prices are much lower than the insurance prices. And with insurance, the health plan sponsor doesn’t know exactly what they’re paying. They can kind of guess—GLP-1s are about $1,300 and you may get a rebate of $600, so it’s about $700. But the member will have to pay full price until they hit their deductible. If you carve out and help fund a cash-pay program, you can get [Zepbound] for $299 on [Eli] Lilly. Then you can set up an arrangement with the save card where you can split it 50/50 or you pay $200 and the member pays $100. Things are always changing, so two months from now, there may be a better program. I also think PBMs are going to come up with some alternatives. When there’s so much pressure on an issue at some point they are going to have to respond.

It’s interesting that you aren’t trying to change the system, but to work around it. There isn’t much anyone can directly do about rising costs, is there?

LEVIN: We specifically and strategically decided to work within the system. When you have a problem this big and it hasn’t changed for 20 years, everyone has tried to do something “disruptive.” But when you’ve got to make dramatic change, it’s been really hard to make work on a mass scale.

Fundamentally, we are dealing with a capitalist system. PBMs are publicly traded companies, and their fiduciary duty is to their shareholder. They will try to maximize profits at every point.

Employers should stop thinking about a PBM as a benefits vendor and look at them like any other vendor. The example I use a lot is, if you’re a large company, you probably have a contract for an IT equipment provider. If you have 1,000 new interns starting for the summer, you have to buy 1,000 laptops, and you probably have an IT guy who knows all about technology. He looks around and finds the best value and buys 1,000 of those from your vendor. You need to do the same thing with the pharmacy. Figure out how to buy better within the contract that you have. Within our system, you have to treat it just like you do any other business transaction between two for-profit companies.