Drug Price Transparency Initiatives and How Payers Should Prepare

The focus on lower drug costs has expanded to include providing drug price transparency to physicians and patients. This effort includes a January 2021 Centers for Medicare and Medicaid Services (CMS) requirement for Medicare Part D plans to support Real Time Prescription Benefit (RTPB) information to physicians in their Electronic Health Record (EHR) system. EHRs will be the primary vehicle for physicians to view drug cost information. When a physician completes entering a prescription RTPB information should appear.  The information may include patient cost, remaining deductible, prior authorization indicator and alternatives along with both retail and mail service pharmacy patient cost.

Significant efforts are underway outside of the e-prescribing channel to give patients access to prescription cost information through a growing number of patient-centric channels (like apps and member portals). “We’re so used to sticker shock at the pharmacy that it has taken over a decade of rising drug prices for the issue to make it under the national spotlight,” writes Joe Harpaz, Forbes.

A recent Surescripts survey revealed that 53% of respondents have not taken a medication because it was too expensive. Also, of note is that nearly 70% of millennials desire discussions about drug cost which influences their physician selection.

In this article, we review three entities and their efforts to provide drug price transparency to physicians and patients. We also cover what Pharmacy Benefits Managers (PBMs), other payers, employers, and physicians may need to do to prepare for this new information and the potential impact RTPB information will have on stakeholders.

Comparison of Three Major Organizations

Three organizations are working to develop guidancefor access to patient specific-prescription cost information. The National Council for Prescription Drug Programs (NCPDP), Health Language 7’s Da Vinci Project, and the CARIN Alliance are all approaching the transparency issue from a different perspective.

In our most recent post, we shared our analysis of the quality of information being provided today through PBM member portals which often reflect their RTPB support. We identified gaps and issues that clearly need to be addressed to improve RTPB information. While standards may be established,  use of the standards is needed to achieve the transparency goals.


National Council for Prescription Drug Programs (NCPDP)

NCPDP is a standards development organization focused on transactions related to prescriptions. Their most recent work on prescription drug cost information for physicians and pharmacists, the Real-Time Prescription Benefit Standard (RTPB), includes patient specific drug costs. RTPB is intended for physicians to use within their electronic health record (EHR) system. The information is sourced from PBM systems and provided to physicians inside their EHR workflow when completing a prescription. RTPB most often occurs after the provider has been guided by formulary & benefit information to reduce prescription rework.  NCPDP has also developed a Formulary & Benefit Standard that has been widely adopted by the industry.

The RTPB information provided includes the patient’s drug cost (sometimes reflecting the remaining deductible). Data returned may also contain information on restrictions (like quantity limits or prior authorization) and the cost of drug alternatives and pharmacy options.

RTPB represents a powerful new tool to communicate patient drug options to physicians, enabling them to evaluate the best medications for their patients. This makes alternatives information and prior authorization requirements critical for helping physicians evaluate and compare drug choices for patients to avoid therapy disruption. 

In the Surescripts survey, 94% of patients who did not take a medication because it was too expensive were willing to take a lower-cost alternative. As such, having priced drug alternatives information as part of the real-time benefit information gives physicians what they need to assess other treatment options for a patient. 

Potential Impact

PBMs and payers may already have RTPB capabilities available for some physicians through select EHRs. As distribution of this information increases so will the scrutiny. A review to compare the drug formulary with the results in RTPB information is inevitable. This analysis could identify situations where prior authorization indicators are missing or where drug alternatives are inappropriate and potentially more expensive than the initially selected trigger drug.

For employers, the CMS mandate that RTPB information be available for Medicare Part D patients is conducive to market adoption. However, this does not guarantee that PBMs will implement RTPB information with drug alternatives for employer-based plans. Employers should verify their PBM’s plans for implementation and be prepared to question the completeness of the information provided. If drug alternatives information is deficient, solutions like Benmedica’s SmartAlts can supplement PBM information. Supplementing basic PBM data can ensure that physicians have access to the drug coverage information they need to make the best prescription decisions for their patients.

For physicians, the impact of having drug cost discussions with patients has the potential to increase patient satisfaction. Surescripts’ survey results indicate that millennials place more emphasis on drug price discussions than middle-aged patients (68% vs 51%). When physicians can access drug cost and coverage information, patients appreciate lower costs. Payers also benefit from lower drug costs by encouraging physicians to choose preferred drugs. Being able to discuss drug costs with their physicians could help patients find most appropriate and affordable medication. RTPB information can also include patient specific prior authorization indicators.  This is a valuable starting point for an electronic prior authorization which may be approved prior to the patient’s arrival at the pharmacy, increasing adherence.

Pharmacies, too, will benefit from RTPB. While pharmacies have been able to process and test claims for quite some time, patients should a have better understanding of how much their drugs will cost and what restrictions they might face. This will help to prevent rework at the pharmacy and enable patients to obtain medications they can afford when the patient first arrives at the counter . Physicians should also be able to handle prior authorizations and drug alternatives at the time of prescribing and not worry about a call from the pharmacy requesting a new prescription.

Preparing for Real-Time Pharmacy Benefit Information

Providers of RTPB information need to be prepared to deliver accurate and complete information in a timely fashion. PBMs may need to combine multiple sources of information and ensure the information provided is comprehensive. Providing drug costs is relatively easy, but PBMs must also include prior authorization requirements and actionable drug alternatives. Ensuring that physicians can also view their patients’ remaining deductible is another way to guide patients to the right drugs.

Employers with their own drug benefit management need to ensure that their consultants are using best practices and supplying complete information for their employees. Not all PBMs are providing complete information to their members (as we found in our previous analysis). 

Finally, physicians will need to update systems to include new patient drug cost information and be prepared to discuss this information with patients. We have seen examples of EHR systems displaying cryptic or vague information. If physicians do not receive usable data, they may not be equipped to interpret and discuss prescription options with their patients.


Health Level 7/Da Vinci Project

Health Level 7 International (HL7), another standards development organization,  established the Da Vinci Project to address interoperability challenges within the healthcare community and accelerate the adoption of Fast Healthcare Interoperability Resources (FHIR) ® standards. 

“With more skin in the game than ever before, patients are becoming savvy, engaged and discerning consumers. They know that the name-brand drug with the $300 monthly price tag may not be the only option. They want a healthcare provider who has the information needed to compare and guide them to alternatives that achieve the same or similar outcome,” writes Andrew Mellin, Surescripts.

The goal of the Da Vinci Project is to help payers and providers use FHIR to impact outcomes, including clinical, quality, cost, and care management. FHIR reduces the need for one-off systems customization; use cases are in development to provide coverage information (including medical benefit medications).

“FHIR’s appeal lies in its flexibility, permitting the selection and exchange of specific pieces of patient information instead of having to import entire documents,” writes Jocelyn Keegan, Point of Care Partners. “This makes it easier for developers to create targeted applications because they can use FHIR to select only those data fields the individual user needs.”

Potential Impact

As Da Vinci grows, so will the exchange of information between payers and providers. One focus is the rules governing exchange documentation requirements through templates. These templates are specifications to guide physicians on the information a payer expects to receive from a physician, including drug information requirements. Think of documentation templates as forms or data elements in the EHR that help document items specific to a diagnosis.  Templates will allow payers to automate approvals, eliminating practice staff retyping information into portals or phone calls from practices to payers to validate coverage of a drug to be administered as part of the medical benefit. While the initial push includes drugs covered under medical benefits, FHIR could expand into other specialty medications covered under pharmacy benefits.

Understanding coverage requirements has the potential to greatly reduce the time practice staff spend on portals and calling for patient coverage information. Today the typical office has a web of information used to assess the likelihood of reimbursement for the administration of a drug. Removing uncertainty and providing automated responses is an excellent method to lower the administrative burden.

For physicians, better understanding the documentation requirements for a patient diagnosis could speed the submission of a drug on medical benefit that might require pre-certification. As with RTPB information for pharmacy benefit drugs, the physician and patient will benefit from having access to drug cost information and a possible list of alternative medications to consider that might be more appropriate for the patient.

Payers benefit from this automation as well through more appropriate drug selection in line with treatment guidelines they have developed. With the receipt of structured data from the requesting physician there is an increased capability to automate the evaluation and approval process also saving time answering calls from practice staff about coverage. Reducing manual inquiries about coverage is a major goal of payers. 

Preparing for Payer/Provider Data Exchange

To prepare for these new information exchanges, payers and providers will likely need to change their existing workflows. Replicating the current environment of searches for information, fax exchanges, long wait times on hold, and long telephone calls in an electronic fashion won’t improve information exchange.

For example, if certain criteria need to be met for a drug to be covered, the payer should not ask for information without including the criteria for how the information will impact approval. Likewise, providers need to be prepared to change the patient documentation they are recording to accommodate new automations. It seems fair that both the payer and physician bear the burden of adopting different workflows.

Payers will need to plan out the information they are providing, including the criteria for coverage decisions and preferred drug alternatives.

Physicians EHRs will also need to be updated to accommodate the required documentation templates and physicians may need to respond to information requests from payers now present in their EHR.

The tradeoff of investing in better communication tools is lower administrative burdens for all stakeholders and ultimately improved speed to therapy for patients. 


CARIN Alliance

The CARIN Alliance works to empower consumers with better access to their health data, including drug cost information. The CARIN Alliance serves consumers, healthcare organizations, and application developers. Its members include technology companies for physicians and consumers, provider organizations, insurers, and patient and physician advocates.

Following the healthcare price transparency movement, a logical place for the alliance to start is with drug price transparency in the form of RTPB information.

Potential Impact

CARIN is striving to put healthcare data, like historical medical and claims records, in patient hands. Their goal is to enable “any consumer [to] choose any application to retrieve both their complete health record and their complete coverage information from any provider or plan in the country.”

“CARIN’s vision is to rapidly advance the ability of consumers and their authorized caregivers to easily get, use and share their digital health information whenever, wherever and however they want,” writes Pooja Babbrah, Point of Care Partners

“This new method includes consumer-facing, RTPB information. It will use technology — application programming interfaces (APIs) — to enable consumers to look up the costs of their prescriptions, as well as what their insurance will cover and pay for, on a smart phone, tablet or other electronic device. This has been a black box for most people. The consumer-facing RTPB information also could include the cash price for a medication, as well as indicate whether prior authorization (PA) is needed, which can also be a barrier to access.”

Part of the information CARIN wants to unveil is drug costs. Currently, some PBMs and payers communicate drug cost information on member websites and apps. CARIN seeks to guide multi-stakeholder work so that participants can adopt best practices for educating consumers.

Enabling patient access to their healthcare records and coverage information will require payers to verify that the information provided is both accurate and useful. While access to drug costs can help patients determine what they can afford, patients should also be able to see appropriate alternatives options to have meaningful discussions with their physicians. 

Preparing for Consumer Drug Cost Information

To prepare consumers to receive information on drug costs, consumer application developers and PBMs need to ensure that the information is complete and has adequate explanations.

For employers especially, coverage and pricing information can be a valuable new tool to educate employees and family members about drug costs, prior authorization requirements, and drug alternatives.

Today’s Solutions for Drug Pricing Transparency

While drug pricing transparency remains a challenge today, we believe that the solution lies in supplying better information to doctors at the time a prescription is written and to patients through familiar applications . Providing this information may require payers to include information from multiple sources like claims systems and coverage information.

Benmedica is on the forefront of creating, reviewing, and augmenting drug coverage information so that employers and payers can use robust information to ease the physician prescription-selection burden while improving relationships with patients.

If you have questions, contact us to discuss how we can help you  prepare your organization for price transparency.