Big Employers Will Use Online Startup to Save on Medicine Costs
(Bloomberg) -- A group of large employers plans to use a new online prescription-savings tool as they confront high drug costs and try to steer patients to the most cost-effective medicines.
The Health Transformation Alliance, a coalition of more than 40 big companies that includes IBM Corp., Verizon Communications Inc. and American Express Co., has agreed to use a new online tool from startup Rx Savings Solutions to help the millions of people who work for the group’s members get better deals on their medications.
The HTA reviewed numerous comparison tools and chose Rx Savings Solutions because its app looked at prices and efficacy, said Robert Andrews, the group’s chief executive officer. The highest-priced drug is also sometimes the most efficacious and best value in the long-term, he said. Financial terms of the agreement weren’t disclosed.
“Our objective is not simply a better price on a drug but a better health outcome for a patient,” said Andrews. Member companies will have the option of using the new tool next starting next year, he said.
Separately, Andrews said that the HTA it was working with the nonprofit Institute for Clinical and Economic Review, which examines the cost-effectiveness of expensive new medications, to recommend changes in lists of covered drugs. The HTA plans to do such reviews regularly starting next year, he said.
Rx Savings Solutions’ app layers on top of existing pharmacy-benefit managers such as CVS Health Corp. or UnitedHealth Group Inc.’s OptumRx unit and can suggest drug switches within an employer health plan that might save money with no loss in effectiveness. If a patient is interested in switching, it will work with the doctor to see if she can change the prescription.
The Rx Savings Solutions tool has more than 20,000 savings recommendations that are vetted by staff pharmacists based on peer-reviewed scientific data.
The startup, which has about $25 million in venture capital, has faced pushback from some pharmacy-benefit managers who saw it as a threat, said Chief Executive Officer Michael Rea. But he says PBMs are beginning to embrace the service as employers demand more ways to generate cost savings.
The deal “is a vote of confidence from the market that there is a missing component in the pharmaceutical buying process for consumers,” Rea said. The tool can help employers save as much as 20 percent in drug costs, he said.
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