How Will the GoodRx-Surescripts Agreement Affect Independent Pharmacy? (2024)

GoodRxrecentlyannouncedits agreement with health information networkproviderSurescripts,in a move thatGoodRxsays will enable physicianaccess to more information about drug discount prices.

GoodRx CEOand co-founder Doug Hirsch says that his companyis “always looking for ways to increase prescription price transparency and affordability for more Americans.”The current dealwith Surescripts“armsprescribers with the tools and information they need to choose medications that are both accessible and clinically appropriate,”addsHirsch.

The deal will serve to expandGoodRx’sinfluence, as Surescriptshas a near-perfect monopolyof thenetwork,holding a 95% market shareof the e-prescribing market.

Taken at face value, the agreementisa win-win situationfor both patients and providers,by allowing doctors to prescribe medicineat much cheaper prices.But what doesit mean for independentpharmaciesthatare already struggling with diminished profits fromincreasedPBMclawbacksandhighdirect and indirect remuneration fees (DIR)?

Pharmacies are understandably worried about the deal.

Just a week afterthe GoodRxannouncement,hundreds of independent pharmacists signed a letter asking the Surescripts board to rescind the agreement. The letter states that“GoodRx is not price transparency” and thattheprogramis “bought and paid for by the same PBM-based, opaque pricing schema the deal claims to upend.”

GoodRxBackground

GoodRxis a comparison-shopping service thatprovides drug coupons and a free mobile app and website that tracks prescription drug prices.The companyhas partnerships with major prescription drug companies, enabling it to negotiate lower prices.

For some patients,usingGoodRxspellsthedifference between being able to afford their medications and staying adherentversus,not taking them at all.

Controversies

BothGoodRxand Surescripts are not free from controversy, however.

A 2020articlefromConsumerReportsrevealed thatGoodRxwas sharing personal user data with some 20 other companies,including Facebook and Google, bringing up serious issuesabout privacy and health data security.While the Consumer Reportsinvestigationhasprompted GoodRx to update its data sharingpractices,it has maintained thatthe informationit collectedwas never used for selling adsto users.

In 2019, Surescripts wascharged by the FTCwith “illegal monopolization of e-prescription markets”,citing anti-competitive practices, among them using “illegal contracts that denied patients access to lower prices, higher quality, and more customer choice.”

WhyDoIndependent Pharmacies HateGoodRx?

While most pharmacy chains andsmallpharmacies will accept aGoodRxcoupon, someindependentpharmacistsandchainsmightnotaccept them. Othersmightdo so,onlygrudgingly.Pharmacists cite the extrapaperwork needed to use the “coupon”and the added time it takes to process the prescriptionas reasons for not wantingto serveGoodRx patients.

Themost oft-cited reason is thatGoodRxfurther reduces the profits independentpharmacies makethrough the fees they charge the pharmacy in processing claims.Still, some pharmacies will take GoodRx coupons even though they will lose money,banking on the potential forrepeat businessfrom a new customer.

DoesGoodRxMake MoneybyExploiting a Broken System?

Critics ofGoodRx,such aspharmaceutical economist Dr. Adam Fein of Drug Channels, say the company is “taking advantage of a broken pharmacy pricing system.”

Dr. Fein explains thatGoodRxexploits the inflated usual and customary (U&C) list price of prescriptionsfor cashpayingcustomersthat are usually far above net acquisition costs. Using GoodRxallows patients access to a PBM’s rates, whichare way below theU&C price.

ThroughGoodRx’spartnerships with PBMs, it can save its customers the difference in pricing.GoodRxalso collectspart of the fees the pharmacy remits to the PBM.

“Pharmacies hateGoodRx’ssystem since they lose money from the potentialprofit,they would have madefrom cash paying customers and then also lose moneywhen they pay a fee for selling toapatientwho might have used their pharmacy anyway,”says Dr. Fein.

GoodRxvs. Amazon?

While the effects ofGoodRx’senlarged presence are clear for independent pharmacy, what does it mean for much larger players like Amazon and Pillpack?

ThoughGoodRx’sshares took acumulativehitof32%sinceAmazon’sacquisition ofPillpack,its CEO has shrugged off any perceived threats fromPillpack, declaringAmazonas “not a threat.”

Some analysts agree, noting that while Amazon has made headways into the mail-order drug market, it still does not havewhatGoodRxhas: access to aggregate prices for prescriptiondrugs from its 70,000 strong pharmacynetwork.

Whether or notit*ees Amazon as a legitimate threat,GoodRxcontinues to expand itspharmacy businessfootprint withitsrecent $50 million acquisition of competitorRxSaverin April of this year.

Rising Drug Prices

What does this all mean forindependent pharmacy? Many patientshavecontinuedto payhigher pricesfor prescription drugseven during the pandemic, according tothe AARP.

As retail prices outpace inflation, many patients will findthe cost ofprescription medicine out of reach.

Manyof thesepatientswill turn toservices like GoodRxto shop for cheaper drugs,just to affordpayingfor their medications.

While bills have been introducedat the state levelto addressPBMs,DIR fees and rising drug costs,comprehensivereform at the federal level is not yet a reality.

To learn how you can supportpharmaciesin fighting for reform, visit theNCPA page here.

We encourage allindependent pharmaciststojoin the discussionby leaving a reply in thecommentssectionbelow.