Report Breaks Down Discount Programs Negative Impact on Dermatology Care

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A recent report aimed to inform readers about prescription cost-saving platforms and their consequences for clinical practice and quality of care in dermatology.¹

For years, obtaining affordable dermatology medication has been challenging for patients. More than 1 out of 6 older adults (17%) could not afford their prescriptions in 2012. Despite programs like GoodRx and Cost-Plus Drugs that make drugs more affordable, they all have their drawbacks. The report stresses the importance of scrutinizing these discount programs and their impact.

This Viewpoint published in JAMA Dermatology was authored by Alana L. Ferreira, BA, from Perelman School of Medicine at the University of Pennsylvania, Jules B. Lipoff, MD, from the department of dermatology at Lewis Katz School of Medicine at Temple University, and Stephanie K. Fabbro, from the division of dermatology at Ohio Health Riverside Methodist Hospital.

The digital platforms of GoodRx and Cost Plus Drugs use established models, including the usual and customary pricing models, the Walmart $4 formulary, and discount cards. However, as the authors of the report question: do these discounts create sustainable models?

The report mostly focused on GoodRx, a digital health program providing prescription discounts and subscription services like telehealth. GoodRx partners with pharmacy benefit managers for negotiated prices and provides these discounts to all patients experiencing high out-of-pocket expenses or without insurance.

Pharmacies must honor these deals to stay within their insurance networks, which may result in reduced profit margins. With these discount programs, pharmacies retain about 80% of their lowest reimbursement.

Not only that, but GoodRx has been accused of mishandling patient data. GoodRx had to pay a $1.5 million civil penalty since they did not report an unauthorized disclosure of customer health data to Facebook, Google, and other companies.²

GoodRX reportedly shared personal prescription drug data with third parties for advertising and analytics^.1 Although the Health Insurance Portability and Accountability Act protects most patient health data, but it does not for most internet-based services such as GoodRx.

“Given that data from these platforms may not have the same protections, there are legitimate privacy concerns,” authors wrote.

SingleCare, another discount program, uses a different model. Opposed to GoodRX which partners with PBMS for negotiated partners, SingleCare collaborates directly with pharmacies to negotiate discounts. SingleCare earns revenue from fees paid by its pharmacy partners whenever a customer uses a coupon or card to fill prescriptions at a reduced rate.

“Essentially, SingleCare negotiates lower drug prices with pharmacies in exchange for driving customer traffic and sales to those pharmacies,” authors wrote.

The report also touched upon potential systemic implications for the health care system if dermatologist used discount programs.

“…if insurers mimicked these models, dermatologists might be forced into a bidding war over service costs, potentially undermining the quality of care,” authors wrote. “Insurance companies could negotiate with practitioners in their network to find those willing to accept the lowest reimbursement rates, creating a competitive system for dermatologic services. While competition in health care can drive improvements and cost reductions, competitive pressures might affect the quality of dermatologic care.”

Cost Plus Dugs, another discount program, uses a new model to offer transparent and fair drug pricing. Physicians send prescriptions to Cost Plus Dugs, which fills them and delivers them straight to patient’s home at reduced prices. This program skips the need for a pharmacy all together, eliminating in-store preparations.

“This direct-delivery model can be particularly advantageous for patients who have limited mobility or live in rural areas where pharmacy access is restricted,” authors wrote.

Like the other programs, Cost Plus Dugs collaborates with insurance companies and PBMs. According to their website, Cost Pus Drugs sell every product their cost plus 15% plus the pharmacy fee. However, this program limits the drug option, restricting what medications physicians can prescribe.

This can leave dermatologists left to prescribe less ideal or efficacious options when patients cannot afford their medications. Cost Plus Drugs offers 1000 medications, such as clindamycin-benzoyl peroxide gel for acne, but not medications for other common treatments such as adapalene.

“Thus, CPD’s formulary is less comprehensive compared with the broader formularies of large retail pharmacies and commercial health care payers,” authors wrote. “In contrast, platforms like GoodRx and SingleCare, which partner with a wide network of pharmacies, may offer a broader range of medication options but introduce additional steps, such as obtaining and presenting discount cards, which can be inconvenient for some patients.”

References

1. ^{Ferreira, A, Lipoff, and J, Fabbro, S. Prescription Cost-Saving Platforms in Dermatology. JAMA Dermatology. 2024. doi:10.1001/jamadermatol.2024.3070}
2. ^{FTC Enforcement Action to Bar GoodRx from Sharing Consumers’ Sensitive Health Info for Advertising. Federal Trade Commission. February 1, 2023. https://www.ftc.gov/news-events/news/press-releases/2023/02/ftc-enforcement-action-bar-goodrx-sharing-consumers-sensitive-health-info-advertising. Accessed September 11, 2024}