MANAGED CARE Q&A
How Software Tools Can Cut Pharmacy Spending
An Interview with Michael Rea, PharmD, Founder and CEO of RX Savings Solutions
Has the environment of heightened scrutiny on high drug pricing in recent months increased pressure on health plans to manage pharmacy costs more effectively?
Drug manufacturers ushered in the New Year with price hikes on more than 1300 prescription drugs, with increases that averaged nearly 10%. Many companies pledged to keep those increases under this mark, yet it’s still almost 4 times the rate of inflation. So, despite all the scrutiny and, in the more publicized instances, outrage, the industry continues to raise drug prices with relative impunity. Health plans have been under pressure to manage pharmacy costs for years. Most plans we’ve talked to were already planning for double-digit increases to their pharmacy spend this year. The latest price hikes only intensify that pressure.
Are there opportunities to reduce spending through better pharmacy cost management—or is pharmacy spending too unpredictable?
Pharmacy spending is actually fairly predictable, in that we know it’s going to go up, as annual drug price increases have shown us. Despite those realities, there are numerous opportunities to reduce the $100 billion in avoidable prescription costs each year. Consumers hold the keys here, so long as they are empowered to manage those costs themselves. They need to know what their options are, what they cost, how to attain lower-cost alternatives, and they need the ability to make these decisions as easily as shopping for a television, hotel room, or even a box of cereal. Our solution delivers all the information they need to make the best choices for their health and finances.
How can software tools help payers and employers to reduce health care costs and improve outcomes?
I think any tool that helps patients afford the medications they’re prescribed will lead to better adherence and thus healthier outcomes. That, in
itself, helps reduce health care costs. However, we can attribute much of the rising cost of prescription drugs on the sheer complexity of the system, one that makes it extremely difficult for even payers and employers to understand the true price of the drugs their members are prescribed and the plan is paying. What all of us need is transparency not only with respect to pricing but the availability of lower-cost therapies that can manage the same conditions with the same effectiveness. Some tools provide this, but only to a limited or skewed extent.
Can you break down the process of how Rx Savings Solutions’ software can help payers reduce pharmacy benefit spending?
It all boils down to putting the information in the hands of the consumer. Our solution starts off by analyzing imported pharmacy claims for each and every member on a health plan. Our patented algorithms look for all possible clinical and financial therapies. The majority of these savings opportunities take the form of therapeutic alternatives along with various generics, fulfillment options, and other options we present to members on their personalized dashboards. These savings alerts are displayed on a member’s dashboard, and the member can choose to receive notifications by text or email. By informing and educating the member on their savings opportunities, the member saves money on the next prescription fill and so does the plan moving forward.
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