When Michael Rea started working as a pharmacist in 2008, he noticed many of his customers couldn’t afford the medications they were prescribed—yet he knew lower-priced options often existed.

Rea knew most pharmacists didn’t have time to provide detailed cost options to their consumers, just as most consumers didn’t have the time or tools to sort through medical lingo and multiple sources to figure out the best price for their medication.

“It’s hard for consumers to find good or even any pricing information related to medication costs,” Rea said. “For example, if you’re a patient and you call a pharmacy, you’re going to get the often-inflated retail price no matter the other options.”

He stepped in to help and started by calling local pharmacies, getting price information and then creating personalized lists of lower-cost alternatives to various medications.

Over the next couple of years, Rea (right) continued to provide this service on the side while working as a pharmacist by day. Then Mutual of Omaha requested a group model for employers in 2011. Rea worked with a team of software engineers to create an automated solution based on the work he was already doing for customers.

He gained a business partner in Doug Besch, another pharmacist, and they kicked off Rx Savings Solutions, a web tool meant to empower consumers to make informed, affordable decisions about their prescriptions.

“It’s no surprise health care has an efficiency problem, and Rx Savings Solutions is a solution for companies and consumers,” he said. “As companies try to shift costs to consumers, we provide tools of support. There are actually pricing networks that we analyze for better costs. In addition, there is a huge cost difference between brand and generic medications and Rx shows options in terms of value.”

Employers pay a monthly fee—undisclosed by Rea—to provide Rx Savings Solutions reports, which list alternatives to prescribed drugs, locations where a patient can find lower-priced drugs and so on as part of their group benefit for employees. Employees can sign up online by providing their last name, date of birth and social security number, or if Rx locates potential savings, the company sends an email directly to the employee, who can then decide to sign up to learn more.

“Other companies ask people to come to them to try something out,” Rea said. “With Rx Savings Solutions, we review claims from insurance companies, which means we can run employee information safely (abiding by HIPAA laws) through our software. Employees then receive a notification and can choose to follow up accordingly. Most employees just assume their insurance gives them the best price for medications, but that’s not always the case. Rx simply offers alternative information that employees can use or discard as they see fit.”

If employees do want to explore the information provided by Rx, the company actually provides a letter of explanation that they can take to their doctors.

“Really, we just want to spark a conversation about options,” Rea said. “Physicians don’t want to prescribe meds that are unaffordable, because then patients don’t take them and health may decline. Our goal is to help consumers reliably take their medication, so that they can be healthier. We aren’t replacing physicians; we’re just providing them tools and resources, and consumers still need to work with their doctors to figure out what’s best for them.”

Rea says Rx also participated in actuarial studies that analyzed more than 2 million claims.

“We realized every $1 employees saved through Rx could help employers save $5,” he said. “Overall, employers were overspending by at least 20 percent. Our Rx tool could clearly help offset costs for employers, saving them a tremendous amount of money.”

The company recently won a competitive bid to provide Rx to those covered under the State of Kansas’ employee health plan. Kansas officials had put out an RFP for a two-part transparency solution in the form of a three-year contract. Rx won the pharmacy portion of the contract, and Castlight Health won the medical portion.

Right now, Rx has 14 team members and remains focused on a large venture round of funding for future growth. Rea anticipates serving 250,000 people this year.

In the meantime, Rx is testing new offerings, including:

• A philanthropy tool: The Rx team was working with a local philanthropic group that helped to lower medication costs for patients who couldn’t afford them. Rx can provide a pricing tool for such nonprofit groups in order to get even better pricing, which helps donor dollars stretch further.
• A general consumer option: This free website will serve as a pricing tool to the general consumer, utilizing zip code and local pharmacy information. It provides an option to anyone without employer access to Rx, though it will be less comprehensive than the whole enterprise solution.
• A pet medication option: Rea says people often don’t have pet insurance, so when they need pet medications, they typically have to pay expensive retail prices. This tool would help them find the best deal.
• A transfer prescriptions consumer product: “Typically to transfer prescriptions, you have to call, be on hold, wait to talk to someone, which is kind of a pain for both the consumer and the pharmacy. With Transfer Rx, you can enter your information, take a picture of your prescription bottle, fax it to the pharmacy and the transfer is completed without a call,” Rea said.

“Our goal over the coming years is to deliver significant savings to consumers and employers across the nation. We continue to develop products that alleviate pain points for pharmacies, employers and consumers,” Rea said. “We think we have the most robust offering on the market, and it’s an exciting opportunity to provide solutions.”

Credits: Images courtesy of Rx Solutions.