It’s Time for Drug Price Transparency
By Stanley Crane
Stanley Crane is the chief technology officer of InteliSys Health of San Diego, CA.
EHR vendors face a tough challenge in deciding which new features to develop and integrate for their next release and which ones to leave on the cutting room floor. The benefits of each potential enhancement must be weighed against the costs, usually measured in programming time. Moreover, features required for Meaningful Use and MIPS must be included, making the triage even more difficult.
However, EHR companies are missing the boat if they neglect to add a feature that could have a massive impact on their clients’ patients. I am speaking here of prescription drug pricing comparisons, built directly into the EHR workflow of prescribers
We’ve heard a lot about drug price transparency lately. But the public discussion hasn’t come close to the truth.
There are vast differences in the prices pharmacies charge for the same drug from the same manufacturer within the same geographical area. For example, the price of generic Plavix (clopidogrel) ranges from $6.16 at one pharmacy in Aurora, CO to an amazing high of $150.33 at another pharmacy just a few steps away. That’s the equivalent of a gas station charging $72 per gallon for unleaded regular when a station across the street is asking $2.95. This is merely one of literally millions of examples of the absurd variation in retail drug prices.
Most doctors and patients are unaware that retail drug prices vary by so much. As a result, many patients go to the pharmacy, get hit with sticker shock, and walk out without picking up their medication. Others pay far more than they should for the drug because they’re unaware of widespread price variance.
A handful of companies now sell prescription drug price comparison tools directly to consumers. These haven’t had much impact, however. First, because not many people know about them. But also because it’s too complicated for the patient to move their prescriptions to another pharmacy.
Imagine how the situation would be different if a patient’s own doctor could tell him or her what their medications would cost at different pharmacies, regardless of whether the patient has insurance.
What our healthcare system needs today is a modern price comparison tool that is integrated with an e-prescribing tool, ideally within an EHR. The range of prices for a particular drug would appear on the prescribing screen within milliseconds of a physician selecting that medication. Using real-time pricing data from pharmacies, the software could show the cost of that drug at the closest pharmacies to the doctor’s office or the patient’s home or workplace. None of this information is available via EHRs on the market today.
Such a solution could use the patient’s insurance information in their doctor’s EHR, as well as search health plan databases to determine a patient’s out-of-pocket cost (after factoring in deductibles, co-payments, and out-of-pocket minimums). If the patient is on the hook for the cost — either because of a high deductible, high co-pay, or because he or she is uninsured –the software could show the cash price of the medication. It could also indicate whether the cash price is lower than the co-payment under the patient’s plan, ensuring that the patient pays the lowest price each time.
At the patient’s choice, the doctor could then send the e-prescription to the most convenient pharmacy that charges the lowest price for that drug. If the price is still too high for the patient, the software could automatically analyze the selected drug against therapeutically equivalent alternatives, enabling the doctor to prescribe a lower-cost alternative, again comparing the prices at local drugstores.
Transparency in prescription drug pricing offers several benefits. Patients are likely to have better outcomes if they fill their prescriptions and adhere to their prescribed therapy. Physicians can garner higher quality scores if their patients take their meds and control their chronic conditions. Lastly, if price transparency becomes widespread, some pharmacy chains will be forced to lower their prices to avoid losing customers to lower-priced stores or chains. If that happens, the whole system benefits, including patients, plans, employers, and taxpayers.