Demand for e-prescribing creates synergy between industry leaders

August 22, 2005

The competition between RxHub and SureScripts to dominate the e-prescribing market is cooling as each of the companies copes with an increasingly strong demand for e-prescribing technology. Representatives from both companies say they are pursuing the technology and service offerings they know best, replacing rivalry with synergy by targeting different but complementary components of e-prescribing.

The competition between RxHub and SureScripts to dominate the e-prescribing market is cooling as each of the companies copes with an increasingly strong demand for e-prescribing technology. Representatives from both companies say they are pursuing the technology and service offerings they know best, replacing rivalry with synergy by targeting different but complementary components of e-prescribing.

"RxHub continues to focus on providing critical pharmacy benefit and history information to clinicians at the point of prescribing for more informed decision-making," said Dave McLean, RxHub CEO. "We developed both a formulary/benefits and a medication history standard, which is now going through accreditation as a formal standard through the National Council for Prescription Drug Programs, a standards development organization. Thus the entire industry can benefit from the exchange of this vital information."

Although e-prescribing has received considerable media attention recently, the bulk of the more than 3.7 billion prescriptions issued last year was still written manually, generating the need for an estimated 150 million phone calls from pharmacists to physicians' offices for clarification on handwriting, dosing, and other issues, according to industry experts. About 40% of Rxs require reworking at the retail pharmacy before they are dispensed to the patient, according to the National Association of Chain Drug Stores.

The emerging support for e-prescribing may be due in part to several political developments, including passage of the Medicare Prescription Drug, Improvement & Modernization Act, which defines electronic prescribing as a key policy objective. In addition, President Bush has called for widespread adoption of health information technology using e-prescribing as a key component of that program.

New legislation, jointly proposed by Senators Bill Frist (R, Tenn.) and Hillary Clinton (D, N.Y.), titled the "Health Technology to Enhance Quality Act of 2005," would provide federal financial support for expanding the e-prescribing networks that RxHub and SureScripts offer.

RxHub's service emphasis harks back to how the company was created in 2001. It was formed by three large PBM companies: AdvancePCS (which was acquired by Caremark), Express Scripts Inc., and Medco Health Solutions. The PBMs formed the company, at a cost of about $20 million, to create a standardized network to link physicians, pharmacies, PBMs, and health plans. From the beginning, RxHub has focused almost entirely on electronic interactions that occur outside the pharmacy, especially within health systems, say company executives.

Last year RxHub made a significant leap toward its goal of tying physicians and health systems into formulary databases. The company signed an agreement with the Council for Affordable Quality Healthcare (CAQH) to launch an inclusive electronic database for prescribers of health plan formulary information. The partnership combines formulary information from 26 participating CAQH member health plans with that from RxHub's affiliated PBMs, creating a centralized formulary file available to technology vendors through the RxHub system. The result is a single source of formulary data from health plans and PBMs that together cover a majority of commercially insured Americans.

"Reducing administrative burdens in the healthcare system is at the heart of CAQH's mission," said Robin Thomashauer, CAQH's executive director. "We believe that we can support physicians and their patients more effectively by partnering with RxHub to create a robust resource for formulary data. The database is a perfect example of how health plans can work together and with others in the industry to streamline the system. The outcome of our collaboration will be a resource that will help reduce costs and improve care."

Currently, RxHub provides technology vendors access to pharmacy benefit coverage information, including formulary and medication history representing close to 80% of the commercially covered lives. CAQH's Formulary DataSource provides access to formulary data for some of the largest health plan-owned PBMs, including Aetna, Anthem, and WellPoint. Combining their data provides technology vendors with the most comprehensive and reliable information available, claim company executives. Currently, RxHub is processing over 1.7 million transactions each month, providing this information to physicians at the point of care.