Prescription Drug Price Transparency and its Visible Impact on Medication Adherence

February 14, 2019


Prescription Drug Price Transparency and its Visible Impact on Medication Adherence

Medication non-adherence exacts a heavy toll, both on patients and the broader healthcare industry. According to a review in the Annals of Internal Medicine, 20 to 30 percent of medication prescriptions are never filled, and approximately 50 percent of medications for chronic disease are not taken as prescribed. Each year, this lack of medication adherence is estimated to cause 125,000 deaths and at least 10 percent of hospitalizations, costing the American healthcare system $100-$289 billion.
Fortunately, the increased availability of sophisticated prescription drug price transparency tools is making a positive impact on medication adherence, as well as patient outcomes. Multiple studies have identified high out-of-pocket costs for prescription drugs as a major contributor to medication non-adherence. By providing patients, and their physicians, with more insight into prescription drug costs at the point-of-encounter – clinicians and patients have the opportunity to discuss alternative therapies or seek options for financial assistance.
In 2019, we predict the value of prescription drug pricing tools will become increasingly visible across the industry. We have reached a tipping point; demand for these solutions will accelerate, and more PBMs and payers will seek to participate. Here is some important background on what is driving this trend.
Drug Costs and Medication Adherence
Recently released analysis from the Office of the Actuary at CMS found that spending for retail prescription drugs reached $333.4 billion in 2017, which represents 10 percent of overall health spending. High prescription drug prices are a major contributor to medication non-adherence, as evidenced by the results of a recent consumer survey: 48 percent of respondents reported that in the past few years they have not picked up a prescription from the pharmacy due to cost. Moreover, the survey found that even a $10 increase in copay has been found to increase the likelihood of prescription abandonment by as much as 19 percent.
Real-time prescription drug price transparency tools, such as myBenefitCheck, aim to give patients and their physicians increased visibility into the actual out-of-pocket costs of prescribed medications based on an individual patient’s formulary and benefit design. Armed with these details, prescribers, and patients can discuss the best course of action that drives better medication adherence.
Key Trends in 2018
As we look at industry trends from last year, one key factor that has helped drive the prescription drug price transparency discussion is the continued move to consumer-centered care. More than ever, patients are encouraged to engage in their care and be involved in clinical decisions that impact their health. Payers and pharmacy benefit managers (PBMs) recognize that a critical component of these discussions involves prescribed drug therapies and their associated out-of-pocket costs. More and more PBMs and payers are now willing to get onboard with price transparency initiatives.
An additional trend is an increased demand for tools that give prescribers patient-specific drug pricing details at the point-of-encounter. Instead of relying on comparative data based on past claim and prescription histories, physicians and their patients require details that are current and accurate, that consider where the patient is in terms of meeting his or her deductible, that include formulary-specific co-pay amounts based on the patient’s specific benefit plan, and that reflect the prior authorization (PA) status. These tools help alleviate situations that cause patient frustration at the pharmacy, such as being confronted with higher-than-expected, out-of-pocket costs or that the prescription cannot be filled due to prior authorization requirements.
When physicians have access to real-time pricing information at the point of encounter, they are empowered to engage directly with patients, discuss therapeutic options, and review financial assistance options if the cost is a barrier. Real-time prescription price transparency takes friction out of the system and ultimately improves medication adherence and clinical outcomes.
The Forecast for 2019
In 2019, look for increased participation from payers, PBMs and large health systems, all of whom can benefit from real-time prescription price transparency initiatives. Today, approximately 25 percent of PBMs are involved in these types of efforts, but that number will continue to grow as more organizations recognize their value and impact on medication adherence.
Larger hospitals and integrated delivery networks have been somewhat slow to participate in prescription drug transparency programs, in part due to their on-going focus on optimizing EHR implementations and migrating newly acquired providers to their organizations. However, adoption is on the rise because C-suite executives recognize that physicians need access to this information to counsel patients and drive better outcomes.
A related trend is an increased demand for technology partners that can integrate multiple systems and connections into a single solution. Rather than adding many individual direct connections, it is preferable to work with a single, comprehensive solution that connects across multiple PMBS and payers and can handle various aspects of the price transparency issue, including cash pricing and electronic PAs. Incorporating electronic PAs into workflows is particularly critical because it eliminates many of the extra steps required for a prescriber to order a drug.
Demand will rise for solutions that offer flexible implementations and the ability to interact with multiple platforms. For example, a single health system may be running multiple EHRs, or even different versions of the same EHRs. Workflows may vary between providers based on specialty or the patient population. Health systems are seeking technology partners that have experience working in complex environments and across multiple systems to rapidly develop the functionality they need without straining their internal resources.
To make implementations easier and to leverage best-of-breed functionality, health systems will continue to adopt technologies that leverage APIs. Using APIs can minimize implementation times and take advantage of prescription price transparency tools sooner.
A final trend for 2019 is an increase in access to pricing information on specialty medications, which on average are nine times more expensive than other branded drugs and 100 times higher than generic drugs. Specialty medications are also more complicated because they are fulfilled in a variety of ways (e.g., mail order, specialty pharmacies, etc.), may have specific handling and storage requirements, and are sometimes covered by medical benefits instead of, or in addition to, drug benefits.
These price transparency tools drive better medication adherence and are a rare example of a solution that is a win for all parties, including patients, providers, payers, and PBMs. Look for more visible evidence of their benefits in 2019 and beyond.