Patients and prescribers should be able to see the total bottom-line cost of medications along with the clinical support for why they are using them.
Pharmacy touches nearly everyone, and medications have the ability to deliver miracles every day. But in today’s system, medications are approved (or not), and often prescribed, largely based on “pay for placement” and multiple layers of rebates and fees, not clinical evidence revealing which drug would be most effective for a specific patient.
And, because of the numerous and dramatic rebates and fees on the back end, a patient has no insight into the bottom-line net cost of the medication. This growing problem is exacerbated as the prevalence of high-deductible health plans grows and patient cost sharing increases.
Take the simple example of a drug that is sold for $1000, with a $200 back-end rebate that goes back to the pharmacy benefit manager. If a patient’s chosen health plan specifies that the patient pays 20% of the cost, shouldn’t that be 20% of $800 ($160) instead of 20% of $1000 ($200)? That $40 difference may not seem like a lot, but now imagine it’s a prescription that’s filled every month and is only 1 of 5 just like it that the patient is taking. High cost is the single biggest driver of poor medication adherence and therapy discontinuation.
Health plans feel a moral imperative to deliver exceptional service and affordable, high-quality care to their members. In most other parts of the system, such as primary and specialty care and hospitals, they are doing so by employing value-based care strategies designed to improve outcomes, control excess spending, and foster better experiences for all stakeholders. They are enabling this with increased (albeit not yet complete) cost and quality transparency to the provider and patient. Pharmacy data and those that control them have not enjoyed that level of transparency.
We have to show every patient and prescriber the true net cost of a medication to the system and to the patient of that medication. Higher “list prices” that are shown to the patient and determine their cost share, without factoring in or giving them the benefit of the rebates on the back end, only drive up their cost, which makes it difficult for many patients to adhere to recommended treatments. Poor adherence then drives up spending and contributes directly to unfavorable patient outcomes.
Further, the pharmacy data that exist (known as real-world evidence) can be used to systematically understand how a particular medication is performing across all patient types (eg, age, sex, ethnicity) and combinations of other medical conditions. Imagine a world where providers are equipped with this information at the point of prescribing to inform which medication will perform best for a patient’s unique situation, and prescribing decisions are made based on the best medication for the patient, independent of the rebate that a different intermediary might have negotiated or would receive. Moreover, if we know clinically the right medication for every person’s unique situation from the beginning, how much simpler could the patient experience be because tools such as prior authorization would no longer be necessary?
It’s time to transform the medication experience for patients. But to achieve meaningful change, every player in the pharmacy value chain will need to be an active, engaged part of health care’s new data economy, because when we share and innovate together, everyone wins.
Hank Schlissberg is the CEO of Evio, an independent pharmacy solutions startup that works with health plans to transform the medication experience for everyone: patients, providers, and the system at large.