By Stanley Crane

The public debate about high drug prices has failed to address an inconvenient truth: There are huge variations in drug pricing from one pharmacy to another within the same geographical area.

For example, the price of generic Plavix (clopidogrel) ranges from $6.16 at one pharmacy in Aurora, Colorado, to an amazing high of $150.33 at another pharmacy nearby. That’s like a gas station charging $72 per gallon for unleaded regular when a station across the street is asking $2.95. And this is merely one example of the absurd variations in retail drug prices.



Most doctors and patients are unaware of the significant differences in retail charges for prescription drugs. As a result, many patients go to their neighborhood pharmacy, are stunned by the high price for their medication, and walk out without picking it up. Other people pay far more than they should for the drug simply because don’t know it’s available elsewhere for less.

A few companies now sell prescription drug price comparison tools to consumers. These haven’t had much impact, however. One reason is that not many people know about these apps. Also, they’re unlikely to look for comparison tools if they’re unfamiliar with the reality of price variations.

The situation would be quite different if a patient’s own doctor could tell him or her what their medications would cost at different pharmacies. Most patients would welcome that information if it could save them money.

Real-time pricing data at the point of care
Of course, physicians have no way of finding this information on their own. What they need is an online price comparison tool that is integrated with their e-prescribing software, which is usually part of their electronic health record (EHR).

Such an application would have to show the range of local prices for a particular drug within milliseconds of a physician selecting a particular medication to prescribe. Using real-time online pricing data from pharmacies, the software could show the cost of that drug at the pharmacies closest to the doctor’s office, the patient’s home or workplace.

Using the patient’s insurance information in their doctor’s EHR, plus health plan databases, the software would instantly determine a patient’s out-of-pocket cost for the drug, after factoring in deductibles, copayments and out-of-pocket minimums. The application would also show the cash price of the medication. That would be important for two reasons: First, the patient might have to pay the entire cost, either because of a high deductible or high copay, or because he or she was uninsured. Second, especially if the doctor prescribed a generic drug, the cash price might be lower than the copayment under the patient’s plan. So the software would ensure that the patient paid the lowest price in every circumstance.

With the patient’s consent, the doctor could send the e-prescription to the area pharmacy that charged the lowest price for that drug. If the price was still too high for the patient, the software could automatically compare the selected drug with other therapeutically equivalent drugs, enabling the doctor to prescribe a lower-cost alternative.



Transparency in prescription drug pricing has several benefits. First, patients are likely to have better outcomes if they fill their prescriptions and adhere to their prescribed therapy. Second, physicians would garner higher quality scores if their patients took their meds and kept their chronic conditions under control. Third, widespread price transparency would force some pharmacy chains to reduce their prices to avoid losing customers to lower-priced competitors. This would benefit everyone in the system, including patients, plans, employers and taxpayers.

Drug price transparency in the e-prescribing workflow
Retail drug price information is not available in EHRs today. There are third-party solutions that could fill this gap, but EHR vendors aren’t yet convinced it would be worthwhile to spend time and money integrating such a tool into their electronic prescribing modules.



Having spent more than 20 years as the CTO and chief innovation officer at Allscripts, I know how challenging it can be to decide which functions or apps to add to an EHR. The executives in charge of product development must carefully consider all of the options they’re aware of to select the EHR enhancements most likely to be useful and attractive to their customers. The benefits of each potential enhancement must be weighed against the costs, usually measured in programming time. In addition, the executives must include the features required for Meaningful Use and MIPS in their products, making their choices even more difficult.

Because a drug transparency pricing tool could have such a strongly positive impact on patients, however, EHR companies are missing the boat if they neglect to add it to their prescribing modules. Moreover, the programing time required for the integration of this kind of tool with EHRs with is modest – only a day or two.

The value proposition for EHR vendors to adopt such a solution is straightforward. They could offer a feature-rich solution of great value to their customers for a very modest time investment. Those developers that adopted price comparison tools would have a first-mover advantage over their competitors. If more patients could afford to buy the drugs they were prescribed, they’d be more likely to comply with their care plans and have better outcomes. Finally, if physicians and patients could compare retail prices before drugs were prescribed, they would unleash real competition among pharmacies, which would lead to lower costs for consumers.

On all counts, it’s simply the right thing for EHR companies to do.


About the Author: Stanley Crane is the chief technology officer of InteliSys Health. He was formerly the CTO and the chief innovation officer of Allscripts.