John Verner | Getty Images
Back in 2010 Doug Hirsch, a techie who has worked at Facebook in addition to Yahoo, had a frustrating experience trying to pick up a prescription. He went to a big chain pharmacy in Los Angeles in addition to was told — to his dismay — which his prescription would likely cost $450. An experienced shopper, Hirsch decided to do a cost comparison. So he went to another pharmacy, where he learned the same prescription would likely cost him $300. Then he went to a third, where the pharmacist tried to negotiate, asking if he had a copay card in addition to offering to match the cost at another pharmacy.
“For me This kind of was eye-opening. I just figured the item was a person in a white coat in addition to they came up with the cost. To learn there was a competitive market blew my mind,” he said.
When he got home coming from his pharmacy visits, he searched the drug name in addition to cost on Google only to come up empty-handed. Unlike shopping for plane tickets or shoes, drug prices can be almost impossible to find until you’re at the pharmacy trying to fill a prescription.
Hirsch’s experience led him in addition to two some other tech geeks to start GoodRx, a Santa Monica, California-based company which helps consumers find in addition to compare prescription prices close to home or work through a free in addition to easy-to-use app in addition to website.
To get the information, GoodRx partners with pharmacy chains such as CVS, Target, Walgreens, Kroger in addition to Walmart; pharmacy benefits managers (PBMs) such as Express Scripts in addition to Caremark; in addition to pharmaceutical companies. Individuals can at This kind of point get real-time prices at 70,000 locations nationwide.
The company, which ranks No. 6 on the 2019 CNBC Disruptor 50 list, says consumers can save up to 80% with its free GoodRx Pharmacy Discount Cards, as well as through coupons on its site. The company claims which the item’s helped Americans save $10 billion on prescriptions since launching in 2011.
An industry cloaked in secrecy
As the item turns out, Hirsch’s experience will be pretty standard. Most Americans don’t know which prices can vary wildly coming from pharmacy to pharmacy.
“Most Americans are buying blind. They don’t know how much a drug will be going to cost when they get a prescription … in addition to they don’t know which they might be able to get the item for less if they just pay cash or walk into another pharmacy,” said Robin Feldman, a law professor using a focus on intellectual property in addition to antitrust at UC Hastings College of Law in addition to author of “Drugs, Money, in addition to Secret Handshakes.”
This kind of will be becoming an increasingly critical issue as drug prices from the U.S. spiral out of control. Even after rebates, Medicare spending for brand-name drugs rose 62% between 2011 in addition to 2015, says Feldman. The prices of the 20 most commonly prescribed brand-name drugs for seniors have risen nearly 10 times more than the annual rate of inflation over the past all 5 years, according to a congressional report released earlier This kind of month.
Prices are continuing to rise. According to a quarterly report coming from GoodRx, the average list cost of drugs — which’s the cost set by the supplier received a — rose 2.9% from the first quarter ending March 31, 2019.
Rising drug prices have many patients in addition to doctors very concerned. The consequences are alarming. in addition to bad for everyone.
“Americans are struggling to pay for prescription drugs which have huge consequences for their health. Numerous studies have found people delayed treatment, split pills, or rationed medication because of the extreme costs which we experience from the United States. The high prices hit people from the pocketbook. They also affect their health,” said Adam Garber of U.S. PIRG, a public interest advocacy group which recently released a report on spiraling medication costs.
More coming from CNBC Disruptor 50:
These charts coming from Uber’s IPO filiing show why investors are nervous
How Pinterest makes money
23andMe hoping to reach millions more users
Even with insurance, Americans are struggling to pay for medications. Since Obamacare, more in addition to more Americans have insurance, nevertheless most are underinsured. A recent report by the Kaiser Family Foundation found which 40% of Americans have a high-deductible health insurance plan which requires them to pay more than $1,000 out of pocket before insurance kicks in. Yet less than half of Americans have $1,000 in emergency savings. This kind of means which more than half of all Americans with insurance can’t pay their deductible without going into debt.
Prescription costs are affected by a web of factors. Pharmaceutical companies sell medicine to consumers via PBMs, which then deal with insurance companies in addition to pharmacies, using tactics such as discounts in addition to rebates to set prices. The agreements at every step along the way are confidential, hidden not only coming from consumers nevertheless also coming from lawmakers. Not only which, nevertheless various forces channel patients into more expensive drugs. As a result of these agreements, prices can vary wildly coming from pharmacy to pharmacy.
GoodRx founders in addition to co-CEOs: Doug Hirsch (left) in addition to Trevor Bezdek
Against This kind of muddled backdrop, GoodRx helps patients by shining a spotlight on drug prices in addition to how much they can vary. The site shows the cost for various medications, easily searchable by name, in addition to makes the item easy to pull up coupons coming from manufacturers, GoodRx in addition to pharmacies. GoodRx also features a monthly subscription program, GoodRx Gold, which offers additional discounts.
nevertheless the site only has access to information on how much patients would likely pay without insurance. Pricing agreements between insurance companies in addition to pharmacies are not available, in addition to patients generally cannot get which information until they get to the pharmacy counter.
Companies like GoodRx are “adding some transparency, nevertheless I think ultimately we need to restructure how prescription drug prices are set — to look at the value consumers are receiving in addition to creating sure which our dollars are creating us healthy at a reasonable cost,” said Garber.
Drug prices are from the regulatory spotlight
High drug prices are getting more attention these days with lawmakers in addition to advocacy groups pushing for modifications which can lower drug prices in addition to improve transparency.
There are at This kind of point various bills pushing for more transparency around health-care costs, including prescription drugs, at the federal level in addition to in most states. There’s discussion on both the state in addition to federal level about creating expert review boards to examine pricing in addition to evaluate ways to reduce prices or focus on cost gouging by requiring companies to justify huge cost increases.
“The thing which I think will be most interesting on the transparency side will be which you’re seeing policies like the item move at the state level in red in addition to blue states,” said Garber. “Everyone knows someone using a prescription drug problem or has had to deal with This kind of in addition to felt the frustration,” he added.
The pharmaceutical industry, which says pricing information will be a trade secret which should not be revealed, will be fighting these transparency efforts through the legislatures in addition to various lawsuits.
“Well-functioning markets don’t operate in a shroud of secrecy. I like to say which markets, like gardens, grow best from the sun in addition to they wither without information. An industry full of secret deals in addition to secret handshakes will be unlikely to be not bad for consumers,” said Feldman.
There will be plenty of room for improvement, starting with more transparency.
“We have a long way to go. Over 0 million prescriptions are left at the counter each year. These are prescriptions which are fulfilled, in addition to then people walk away. which will be a travesty which people walk away because they can’t afford them,” said Hirsch.
He adds: “Ultimately I’d like to see our nation provide quality, affordable health care to everyone. the item seems unlikely which we’ll replace our current system anytime soon, in addition to the item’s worth noting which existing government-administered programs — Medicare in addition to Medicaid — contain significant gaps.
“Canada provides single-payer health care, in addition to yet market forces actually make many generic medications cheaper from the U.S. If all medications in addition to health care were free, we’d be happy to move on to some some other challenge, nevertheless sadly I think which remains out of reach for the moment,” says Hirsch.