Decision tools for drug purchasing still face challenges

November 19, 2007

Drug-buying decision tools work, they save consumers money and we now have the statistics to prove it, according to a founder of one of the most prominent of those Web-based aids.

Drug-buying decision tools work, they save consumers money, and we now have the statistics to prove it, according to a founder of one of the most prominent of those Web-based aids. But the tools still face challenges in getting more consumers to trust them, use them, and ask their doctors about switching to another medication, said Toby Rogers, executive VP of DestinationRx.

Rogers' company creates tools used for Medicare Part D and for Fortune 100 companies, for example. They are available to over 100 million Americans, he said. And beyond his own tool, he pointed to the development of tools by Medco, WebMD, RxEOB, Consumer Reports, and Subimo. He spoke at the Second National Consumer-Driven Healthcare Summit last month in Washington, D.C.

For a Fortune 100 employer that DestinationRx serves, Rogers said, employees did 6,600 drug searches the first year. The average potential savings per search was $314 for the member and $374 for the plan, an equivalent of about $5 million in savings. With a calculation based in part on other findings that about one-third of people who do the searches actually change drugs, Rogers estimated the employer saved about $1.8 million.

Rogers also pointed to research by Medco released this year, calling it the most scientific study to date on how well the online tools work. Looking at 55,000 users of the Medco tool, the study found they were 58% more likely to make a change than a rigorously defined control group that did not have the tool. In all, 14% of those with the tool had their prescriptions changed to a lower-cost alternative and about half of those conversions were from a name-brand medication to a generic or over-the-counter medication. Those who switched drugs saved an average of $171 on their out-of-pocket costs alone.

Medicare patients

But Medicare patients are the group with the most potential savings, said Rogers. He calculated that an average senior with the four most common conditions—diabetes, high cholesterol, hypertension, and GERD—would spend $3,353 out of pocket with his or her Part D plan on average. But if that senior substituted the lowest-cost drugs for their current prescriptions, those costs would be only $955.

And in that example, none of the drugs is very controversial in terms of substitutions, Rogers emphasized. "They are not going to get many doctors saying, 'I am not going to switch somebody from Lipitor' to one of the possible alternatives," he said.

Asked what expanded use of the tools would mean for pharmacists, Rogers indicated he thinks consumer-driven health care and "transparency" in health care will increase, and "pharmacists are going to have to deal with more people paying cash, and having to talk to them about pricing to help them understand what the prices are and hopefully what options might exist."

Rogers noted that gas station operators say they have constant difficulties deciding how to price their three types of fuel. So, he asked, "What happens in the drugstore market if we get true transparency of drugs and they have to price thousands of products and volatility increases as plans stop their network pricing?" He believes decision support tools will become more important.

Big challenges

But for now, Rogers stressed that the decision-tool industry has big challenges in expanding its operations. DestinationRx research found that for information about drug pricing, people trust their doctors, family members, and others with the same conditions. But only 11% trust those entities that the decision tools are usually related to, such as pharmaceutical companies, insurance companies, PBMs, employers, and "other" doctors.

So with 89% of people not trusting the tools' Web sites, getting inside that circle of trust is their biggest challenge.

And even beyond the trust factor, Rogers said, the tools are facing the hurdle of getting consumers to act. "It's a pain in the neck for people to move that prescription, or at least it is perceived as a pain." In addition, he said, "most of the people are covered under a benefit plan and so showing them retail cost does not do a whole lot."

Other challenges include questions on whether the sites should put primary emphasis on price or on information about the drugs. In addition, obviously, people in different coverage plans need different information. Rogers asked, "How do I provide the right service to GM with $5 co-pays and the right service to my CDH [consumer-driven healthcare] plans?"

Nevertheless, the country has come a long way in seven years since his company's 1999 founding, Rogers said. An analysis just completed by his organization found that 70% of people prefer generics to a brand. "My guess is that [this is a far cry from] when we started this," he noted.

THE AUTHOR is a writer based in the Washington, D.C., area.