Contracted Prescription Drug Pricing versus Discounts

1. Consistent Pricing: Contracted pricing creates a stable price point for medications, which can enhance budget predictability for both patients and healthcare providers.

2. Better Negotiation Power: Pharmacies can negotiate better rates with pharmaceutical companies, which can lead to lower overall costs for patients and insurers.

3. Improved Access: Consistent contracted pricing can improve access to essential medications, ensuring that patients can afford their prescriptions without relying on fluctuating discounts.

4. Transparency: Contracted pricing often comes with clearer agreements on costs, making it easier for patients to understand what they will pay for their medications upfront.

5. Lower Out-of-Pocket Costs: Contracted prices can lead to lower out-of-pocket expenses for patients, especially if contractual agreements include pricing that align with insurance benefit structures.

6. Predictable Cash Flow for Pharmacies: Pharmacies can benefit from guaranteed pricing contracts, which provide assurance and predictability in their revenue streams. This is not the case with Discount programs like GoodRx and SingleCare.

In a November 4, 2024 edition of Benefits Pro article: “Independent pharmacies sue GoodRx over price-checking strategy”, Community Care Pharmacy of Garden City, Michigan, and Keaveny Drug of Winstead, Minnesota, each filed suits in the U.S. District Court for the Central District of California, accusing?GoodRx?of teaming up with the PBMs this year to push?down the payments the pharmacies get and to increase the amount of transaction fees GoodRx gets for sending the patients to the pharmacies.

7. Reduced Administrative Burden: Contracted pricing can streamline the billing process and reduce the administrative complexities associated with managing multiple discount programs.

8. Essential Medications Focus: Contracts can be tailored to ensure that high-need, essential medications remain affordable, which may not be the case with some discount programs.

Sources

1. Healthcare Policy Research Papers:

? ?- Academic journals such as Health Affairs or The American Journal of Managed Care often publish research on pharmaceutical pricing strategies and their implications.

2. Government Reports:

? ?- Reports from organizations like the Centers for Medicare & Medicaid Services (CMS) or the Congressional Budget Office (CBO) can provide insights into how contracted pricing affects healthcare costs.

3. Pharmacy Benefit Managers (PBMs):

? ?- Many PBM websites (like CVS Caremark, Express Scripts, or OptumRx) provide information on how contracting with pharmacies can lead to cost savings and improved accessibility for patients.

4. Consumer Advocacy Organizations:

? ?- Organizations like the AARP or the National Patient Advocate Foundation often release studies focusing on prescription drug costs, pricing transparency, and the impact of discounts versus contracts.

5. Pharmaceutical Industry Reports:

? ?- Industry analyses from firms like IQVIA or the Pharmacy Times provide evaluations of pricing strategies and their market impacts.

6. Books on Healthcare Economics:

? ?- Texts such as "Pharmacy Management: Essentials for All Practice Settings” and others may discuss the implications of pricing strategies in the pharmacy sector in detail.

7. News Articles:

? ?- Reputable news sources such as The New York Times, The Washington Post, or health-focused outlets like STAT News frequently cover developments in drug pricing and the pharmacy landscape, including articles on the efficacy of contracted pricing vs. discounts.

8. Benefits Pro: November 4, 2024

?