HIT Perspectives: Improving Drug Price Transparency: Progress and Opportunities

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HIT Perspectives – September 2018


Improving Drug Price Transparency: Progress and Opportunities


By Tony Schueth, Editor-in-Chief



This is part 2 of a two-part series on drug price transparency. The first article focused on drivers for change and the information gaps inherent in the current prescribing process.

A new revolution is coming to the point of care. First was the advent of electronic prescribing (ePrescribing). This revolution leverages ePrescribing to provide accurate, patient-specific information on medication prices and related out-of-pocket (OOP) costs for the patient at the point of prescribing. Such actionable information will help reduce costs, improve medication adherence and outcomes and enhance patient and provider satisfaction. While improving drug price transparency is a work in progress, considerable headway has been made. This article describes some of those advances and six opportunities for improvement.

Progress. Leveraging improvements in technology and a perceived value proposition for key stakeholders, the industry is moving forward rapidly and aggressively with transparency. Several developments are worth noting:

  • Transaction Standards. While some stakeholders are using application programming interfaces, transaction standards are building blocks for implementations that can be used successfully on a uniform, broad scale. Standards development organizations are developing transaction standards that can be used to address price transparency. For example, the National Council for Prescription Drug Programs (NCPDP) has worked over the past several years with payers, pharmacy benefit managers (PBMs), vendors and pharmacies to create consensus-based industry standards. NCPDP workgroups currently are working on developing two standards for the Real-Time Benefit Check (RTBC) formats as well as an implementation guide. RTBC enables data access in real time and directly from the payer, providing accurate and detailed patient-level benefit information about medication coverage, copays and plan restrictions. Use of RTBC will help improve formulary compliance and medication adherence by ensuring that the patient knows OOP costs before arriving at the pharmacy and can receive the most effective, least expensive, approved drug.
  • Recognizing the need for and value of drug price transparency at the point of prescribing, the industry has forged ahead despite the absence of a finalized standard. Major players, such as Surescripts, CoverMyMeds and DrFirst, have built solutions. Startups are popping up, including RxRevu and Gemini Health. There were 3.1 million RTBC transactions in 2017 through the Surescripts network alone, indicating a value proposition for RTBC.

So far, three different implementation models for RTBC have emerged: direct connection between the electronic health record (EHR) and payer, connection through an intermediary or a combination of both. This menu of options creates challenges for the hundreds of EHR vendors in the market. Which model should they select and how should that choice be integrated into their EHR solution? This is especially challenging for the direct connection option. In this model, prescription benefit information comes directly from the PBM/payer to the EHR. The EHR needs to connect directly to multiple PBMs, which would require each EHR to contract with all payers and for each payer to develop, maintain and support connectivity to every EHR. Such issues may sort themselves out in the future with the rollout of an NCPDP standard and as the market matures; however, it seems likely that the direct connectivity model will be used primarily by the largest vendors and others will leverage intermediaries.

 Opportunities. While much progress has been made, there are still many opportunities for improvements and innovative solutions. Six come to mind. 

  1. Developing RTBC for drugs covered under the medical benefit. The current RTBC transaction focuses on medications covered under the pharmacy benefit. However, there is a need for RTBC for specialty drugs covered under the medical benefit. There are several reasons. For one, the use of specialty medications is rapidly growing and roughly half of the specialty drugs prescribed today are covered under the medical benefit. Use of RTBC could help identify under which benefit the drug is covered and address long-standing issues of transparency and access for these expensive medications. It could also help providers understand benefit restrictions, find less expensive alternatives and identify the appropriate specialty pharmacy to fill the prescription. This will help lower costs and improve speed to therapy, outcomes and patient satisfaction while reducing hassles for the prescriber. However, RTBC for medical benefit drugs is on a longer-term horizon. Specialty pharmacy is in the very early days of automation. NCPDP recently has formed a Specialty Workgroup that is working to address specialty medication and network restrictions during prescribing. (See the article in this issue of HIT Perspectives addressing the need for a related transaction, the electronic medical prior authorization). 
  1. Improving formulary and benefit (F&B) files. The need for F&B files will not go away with the advent of RTBC. Rather, F&B will evolve to support RTBC by consistently alerting prescribers of the need to perform a RTBC due to mitigating factors, such as noncovered drugs. Thus, eligibility-informed formulary is still important because it helps determine whether an RTBC is needed. As a result, payers must address the shortcomings in F&B data. For example, data regarding individual patients’ insurance coverage, coverage restrictions, therapeutic class guidelines, deductibles and other information are not always complete or accurate. Whether or not prior authorization is required will migrate to the RTBC response transaction, where it can more accurately reflect member-specific benefits.
  1. Fixing the prescription rework challenge. ePrescribing vendors need to be innovative to address a challenge related to prescription rework when using the RTBC. One confirms that prescribers using the RTBC frequently change the drug prescribed when provided with information regarding a patient’s insurance coverage and OOP costs. When that happens, the prescriber is faced with extra steps when selecting an alternative, whether it’s for an entirely different medication or just a change in packaging and strength. This is a hassle and one reason why so many prescribers just say, “Let the pharmacist sort it out.” How does that happen today? It’s often resolved by phone; many physicians perceive it as easier to have a nurse answer the phone than to rewrite a prescription. In any case, any rework takes precious time away from the patient visit and adds to physician dissatisfaction. To ensure broad adoption and sustained use of RTBC, interoperability between the EHR system’s ePrescribing system and RTBC application must be carefully designed and implemented to pass RTBC results as a new prescription to eliminate clinician rework.
  1. Settling on a pricing model. Because of the way RTBC has evolved, there are varying pricing models for use of the transaction. Pricing may be outcomes based for those payers engaging in significant numbers of value-based contracts. Our research shows multiple pricing models will likely be in place for quite some time and the reimbursement models will support key objectives. These include getting patients on the appropriate, on-formulary drug; avoiding drugs requiring prior authorization when an alternative is available and improving medication adherence.
  1. Integrating information on payment assistance programs. Another information gap affecting patients’ potential OOP liability is the unavailability of information on payment assistance programs offered by manufacturers and others. Having this information at the point of prescribing can help the physician identify more cost-effective options for the patient. This ultimately improves outcomes and medication adherence and reduces costs. There are plenty of assistance programs available, but the physician must know about them before they can acted upon. For example, many manufacturers fund coupon and copay card programs to offset the costs of drugs for consumers. In fact, manufacturers offer coupons for nearly half of the top 200 drugs, creating billions of dollars in potential savings opportunities. They also fund financial assistance for patients’ drug copays or other medical expenses through nonprofit foundations. Many states have similar programs, although details vary as to for whom and what conditions may be covered. Several payers also offer drug assistance programs, such as CVS Health and Express Scripts’ InsideRx.

Currently, the prescriber must hunt for information about these programs, taking valuable visit time for research. However, things are changing with the digital age and such information can be incorporated into the ePrescribing workflow so it is available at the point of prescribing. While this is an opportunity, there are challenges for EHR vendors. They must identify such programs, figure out how to integrate the information into their EHR and keep the information updated.

  1. Understanding the patient’s financial picture. The prescriber is likely to lack understanding of a patient’s financial obligations, which influence whether a patient can afford a medication at a point in time. Factors include coinsurance, other insurance copayments, and drug deductibles, as well as the patient’s finances. The RTBC only provides part of the picture: a snapshot of a patient’s potential OOP cost for a particular drug at a particular time. This varies because payers do not calculate the patient’s OOP costs the same way and there is no standard for presenting OOP costs. In addition, the RTBC may not aggregate OOP costs for all drugs prescribed for an individual patient, so the problem is exacerbated when multiple drugs are prescribed at the same time.

Other unknown financial factors may affect whether a medication is affordable.  Examples include income and various responsibilities, such as rent or funding a child’s education. These can change dramatically from visit to visit.

All of this is unknown to the provider at the point of care, who may have to ask about such very personal information — especially if the patient needs a very expensive drug with a very large copay, such as an oncology medication. Providers may be reluctant to have this discussion and patients likewise may be reluctant to provide such information and keep it available in the EHR. Some hospitals and integrated delivery systems maintain staff to assist with this matter, but it is beyond the purview of most ambulatory prescribers.

These kinds of sensitive financial issues must be addressed going forward if drug price transparency at the point of care is to become an optimal tool for providers and consumers.

Moving forward. Considerable headway has been made to streamline processes, reduce costs and improve speed to therapy through advancements in drug price transparency at the point of prescribing. The RTBC will become a valuable tool to help ensure that patients will get the right, most cost-effective approved drug before they get to the pharmacy.•

Keep current with Point-of-Care Partners. We are monitoring these developments and are active in the development of — and enhancements to – these and other standards related to ePrescribing. Drop me an email at tonys@pocp.com. I’d be happy to fill you in.