GoodRx, a prescription savings company, launched a new offering on Monday that delivers a cost-plus pricing model for independent pharmacies.
Santa Monica, California-based GoodRx helps consumers compare prescription drug prices and get coupons. The new offering is called GoodRx Community Link and it allows independent pharmacies to contract directly with GoodRx without any involvement from a pharmacy benefit manager. In the past, GoodRx has operated exclusively in partnership with PBMs.
“We are now shifting towards a direct contracting model, where the pricing agreement is between GoodRx and the pharmacy,” said Aaron Crittenden, president of Rx Marketplace at GoodRx, during a recent webinar about Community Link. “To be clear, there is no PBM involvement in discounted card pricing in this direct model. This evolution is anchored on transparency and favorable margins for our pharmacy partners.”
The direct contracting model uses cost-plus pricing for patients, in which a fixed amount is added on top of the cost to produce the product. In this case, the price is based on the National Average Drug Acquisition Cost (NADAC), plus a fixed dispensing fee plus a fixed GoodRx admin fee. So if a drug has a NADAC cost of $10 and the dispense fee is $10 and the admin fee is $5, the patient pays $25, Crittenden said.
“The admin fee is part of the amount the patient pays, is collected at the point of sale and ultimately not paid by the pharmacy,” he stated. This program is only for self-paying customers and cannot be used with insurance, he added.
In addition, Community Link provides access to more than 90 brand medication deals, in which the manufacturer buys down the price of a brand medication through GoodRx. This includes insulin Lantus, a Humira biosimilar and medical devices like Dexcom.
When pharmacies sign a direct contract with GoodRx, they will have the option to opt-in to the company’s Integrated Savings Program as an added benefit. Through this program, GoodRx works with CVS Caremark, Express Scripts, MedImpact and Navitus, in which the GoodRx cash price is embedded into the members’ funded benefit plan. Starting July 1, independent pharmacies will automatically be opted out of the program.
GoodRx launched Community Link to address the problems independent pharmacies are “facing around complex reimbursement models and competitive pressures,” Crittenden said in an email. According to a report from the National Community Pharmacists Association on harmful PBM practices, pharmacies are frequently reimbursed below drug acquisition cost and the cost to dispense the drug.
“Our goal is to help independent pharmacies better manage pricing while continuing to provide consumers with low prices on their medications,” Crittenden added. “We’ve been on a multi-year journey at GoodRx to evolve our business model and deliver solutions tailored to meet the specific needs of independent pharmacies, and are excited to bring Community Link to fruition. Ultimately, we want to strengthen our relationships with independents and show them we are a trusted partner that can help address the industry challenges they are all facing.”
Another company that uses the cost-plus model is Mark Cuban Cost Plus Drug Company. It takes the cost to manufacture a drug and then adds a 15% markup, a fee for pharmacy labor and shipping.
Photo: z_wei, Getty Images
