Web Companies Pull Back the Curtain on U.S. Drug Prices ; Online Lists Allow Public to Seek out Lowest Rates for Generic Prescriptions

By Thomas, Katie | International New York Times, February 11, 2016 | Go to article overview

Web Companies Pull Back the Curtain on U.S. Drug Prices ; Online Lists Allow Public to Seek out Lowest Rates for Generic Prescriptions


Thomas, Katie, International New York Times


Most major pharmacies do not list the prices of the drugs they sell, but two web companies are trying to make pricing information more transparent.

Americans have come to rely on their smartphones to help them do seemingly everything, like hailing a taxi and comparing prices of dog food.

But when it comes to buying prescription drugs, consumers still find the process maddeningly antiquated.

Now, a few entrepreneurs say they are aiming to fundamentally change the way people buy drugs, bringing the industry into the digital age by disclosing the lowest prices for generic prescriptions to allow comparison-shopping.

Most major pharmacies do not list the price of the drugs they sell. And even if they do, prices for the same drug can vary strikingly and cost far more than the rate that most insurers pay. Consumers often don't know how much they will owe until the pharmacist tallies the purchase at the cash register.

"The prices are all over the map, even within the same ZIP code," said Lisa Gill, deputy editor of Consumer Reports Best Buy Drugs, which tracks variation in prices. "It's a retail transaction that doesn't actually act like any retail transaction."

Frustration over drug pricing bubbled over at a congressional hearing last week, when Representative Peter Welch, Democrat of Vermont, directed an exasperated question at an executive of Turing Pharmaceuticals, which set off public outrage last fall after sharply raising prices on a little-known drug. "Why isn't it possible," he asked, "to just have a price where anybody who wants to know what that price is can go to a website and see?"

Drug pricing practices have furthermore become a populist issue on the presidential campaign trail. And many Americans are struggling with insurance plans that demand ever higher out-of- pocket costs.

The spotlight on drug prices could not come at a better time for at least two online ventures. One company, GoodRx, collects drug prices at pharmacies around the country and connects consumers to coupons to help them pay. Another, Blink Health, takes the process a step further by allowing customers to pay for their drugs online, then pick up the prescription at nearly any pharmacy.

"This is the first time the consumer knows what the price of the item is before they get to the register," said Geoffrey Chaiken, one of Blink Health's founders. "We cracked the code."

GoodRx and Blink Health often quote prices for generic drugs that are far lower than the prices that pharmacies typically charge customers paying out of pocket instead of through insurance. Instead, the sites and their apps are offering customers prices that are closer to the rate that is typically available -- or even visible -- only to insurers.

Ten of the country's 15 most commonly prescribed drugs, for example, cost less than $10 on Blink Health, including generic versions of drugs like Lipitor, which manages cholesterol, and the diabetes drug metformin.

The sites cannot help much with brand-name drugs, which are made by a single manufacturer and which carry prices that can be as high as hundreds of thousands of dollars. The purchases also often do not count toward a consumer's insurance deductible, which could be a problem for seriously ill patients with high medical costs.

However, nearly 90 percent of the prescriptions dispensed in the United States are for generic drugs, according to IMS Health, a consulting firm.

Edward A. Kaplan, the national health practice leader at Segal Consulting, a benefits consulting firm, said the prices he surveyed on Blink Health were comparable to prices he negotiated on behalf of large employers. …

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