Going to the pharmacy is something of a singular experience in American retail life. The reason for that is simple. Usually, the consumer has no idea what the cash register is going to tell them. There is almost no such thing as looking at a price tag ahead of time when one heads to the pharmacy. The buyer finds out what the medication costs the moment they attempt to pay for it.
And that element of surprise doesn’t have good effects, Carecard’s CEO David Hannon told PYMNTS in a recent conversation. When the sticker shock sets in, consumers walk away from needed medication, and the prescriptions are left on the pharmacy counter by consumers who can’t afford them.
That bad news, he said, is made worse by the fact that this problem isn’t going to fix itself because the price of drugs isn’t going to go down. What we’ve seen pretty consistently over that last several years, he said, is that drug prices are consistently going up between 6 percent and 10 percent each year. And while there had been a lot of talk about “now” being the time that someone had to step in and do something about prescription drug pricing, the pandemic he said, has pretty neatly displaced that desire.
“A year ago everyone wanted to frame these pharmacy companies as the boogeyman,” Hannon said. “But now it looks like they’re coming out of this more hero than villain. I don’t see any change coming in the next few years. We’re just going to keep seeing the same price hikes that we’re seeing in the past 10 years.”
Which means, he said, the problem is going to keep on getting worse for a large swath of patients priced out. Carecard exists, he said, to take the mystery out of the price and hopefully help more consumers get the drugs they need in hand at a lower price. The company does that by supplying a bulk discount to a catalog of 10,000 FDA approved prescriptions. The service, he said, was built mainly to serve the uninsured and underinsured in the market, as that is the segment with the most apparent need, but Carecard will work for just about any patient.
To accomplish this, Carecard has a platform which contains a powerful AI engine capable of tracking the rather dynamic prescription drug market so that the prices customers see are in real time and accurate.
“And what we’re doing that’s different from these other folks is we actually have good relationships with these pharmacies where we can help set the prices and lock in these prices on these prescriptions,” Hannon said. “On the community level what we’re doing is partnering with a bunch of nonprofits, healthcare groups and membership groups to provide prescription discounts locally. When I set out to build Carecard, I wanted to make a very strong impact at a community level, and that means educating people about the fact that these discounts are available and that it’s my job to provide access to them.”
That access, he said, is more than making them available. It involves actually engaging in efforts to reach out and educate consumers about their options. Consumers, because of the black box that hovers above and around insurance pricing, don’t often know they have options at all. Therefore, they opt out immediately when the sticker shock hits. And this cuts across an entire spectrum of consumers, from those who need medication intermittently to solve an acute but temporary health issue to chronic care patients who take blood pressure medication or diabetes meds daily.
Because, he said, patients not taking medication when they need it or how it was prescribed to them creates harm and expense in the system.
“Unwinding healthcare, it’s a big issue because there’s so many moving parts and all of our incentives are misaligned, right? But the one thing that I think we can all agree on is we need to start realigning incentive systems for the healthcare space, specifically around value-based patient care,” Hannon said.
And that change, he said, will need to come from firms working to change the industry. Because despite years of announcements from various political administrations that pledge “this is the year they’re really going to do something about the prescription pricing problem,” the prices keep going up as long promised regulatory solutions don’t arrive. Fixing prescription costs so that consumers aren’t chased away from medications they need nearly half the time due to sticker shock won’t solve everything, he said. But it will be a big step forward in taking a big bite out of the cost problem for millions of Americans currently being squeezed out by price tags.