Jim describes GoodRx's emerging pharmacy contracting strategies. In addition to working through pharmacy benefit managers (PBMs), GoodRx now also contracts directly with Walgreens, CVS, and other national and regional pharmacies. These direct agreements are based on acqusition cost, which helps pharmacies stabilize gross margins while still providing low pricing for consumers.
To learn more about GoodRx and its pharmacy partnerships, reach out to network@goodrx.com.
Read on for Jim’s insights.
How GoodRx is Evolving Its Reimbursement Approaches to Help Pharmacies and Consumers
By Jim Sheninger, Pharmacy Strategy Officer, GoodRx
Retail pharmacies play an increasingly important role in healthcare access by offering more services—from vaccines to urgent care visits inside a store. Retail pharmacies are also exploring new offerings to help people access care, and new reimbursement models that can create more stable pricing structures. These new offerings and reimbursement models enable pharmacies to better forecast their business and create more sustainable gross margins.
In the midst of this reimagining, GoodRx is responding to the changing market dynamics and adapting its contracting strategy to better serve both retail pharmacies and consumers.
Traditionally, the GoodRx business has operated exclusively in partnership with pharmacy benefit managers (PBMs) to provide pricing to consumers. When a consumer types in the name of their drug in our website or mobile app, GoodRx aggregates multiple PBMs price points for that drug and then delivers the lowest one to the consumer.
In addition to these PBM relationships, GoodRx has also begun contracting directly with key retail pharmacy partners.
The upside? Pharmacies can stabilize their gross margins, GoodRx can drive more volume and better acceptance at the pharmacy counter, and consumers can access better pricing on their prescriptions. It’s a win-win-win for everyone.
GoodRx now operates four different types of contracting models with retail pharmacies:
- Traditional PBM network: With the legacy GoodRx business model, the company contracts with multiple PBMs to deliver price points at more than 70,000 pharmacies nationwide.
- Hybrid model: GoodRx contracts directly with a single pharmacy on a subset of drugs, then utilizes the multi-PBM network for the remainder of the drugs.
- Full direct contracting model: The pricing relationship is entirely between GoodRx and the pharmacy for the entire book of drugs, with no PBM involvement.
- Single source PBM opportunity: GoodRx contracts with one PBM network on behalf of one pharmacy.
For example, GoodRx has worked with Walgreens to reduce prices on nearly 200 prescription medications by an average of 40%. The new lower prices include medications for such health concerns as heart disease and mental health, as well as categories often not covered by insurance, such as acne, insomnia, men’s health, and weight loss. This initiative drove significant incremental claim volume for Walgreens, increased GoodRx volume at the pharmacy counter, and helped a huge number of consumers afford their medications.
Most recently, GoodRx expanded its GoodRx Gold network by partnering with Publix via its direct-contracting model. Gold members can now access prescription savings of up to 90% at more than 1,200 Publix pharmacy locations across the Southeast.
These discount card pricing agreements are informed by acquisition cost-based pricing. Currently, GoodRx has direct programs live with CVS Pharmacy, Walgreens, and other national and regional pharmacy partners.
Like everything GoodRx does, these contracts center around helping people access their prescriptions at a price they can afford, leading to improved finances and health.
GoodRx recently found that by delivering lower out-of-pocket costs for generic and brand medications, it has helped consumers obtain at least 184 million prescriptions they otherwise may not have been able to afford. These savings translate into real, meaningful dollars that can now be put toward things like rent, food and education. And when people can afford their medications, it leads to better health outcomes down the road.
As market dynamics continue to evolve and retail pharmacies increasingly look toward acquisition cost-based models, GoodRx is well-positioned to assist and help bring greater transparency to prescription drug costs. Retail pharmacies are critical to improved access and affordability for consumers. By continuing to work together, we can make it reality.
If you’re interested in learning more, please reach out to network@goodrx.com.
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