By spotlighting for providers the drug cost burden patients face, Blue Shield of California has cut costs for 40% of patients existing prescription medications, helping the Oakland-based insurer and its 4.5 million members save $20 million in drug costs over the past two years.
The not-for-profit payer typically spends billions of dollars on prescription drugs each year, said Alison Lum, the insurer's vice president of pharmacy.
"There's some room to grow here, we're just getting started," Lum said.
The company credits the savings to a partnership with Gemini Health, a San Francisco-area startup that integrates with electronic health record systems to highlight for clinicians members' drug history, coverage availability and current spend on prescription drugs. Its cost-comparison engine then recommends lower-cost, alternative therapies.
By cutting drug costs, the insurer said it is able to help increase member medication adherence, as well as cut down on callbacks from the pharmacy. Lum said Blue Shield of California is working to increase adoption of Gemini Health among the 77,000 prescribers who can currently access the tool.
"Because the tool is real-time and based on a patient's claims history, it also lets the provider know whether or not step therapy is required, if there's a preferred medication and which drugs are available without prior authorization," Lum said.
Going forward, she said she could see leveraging the tool to help providers identify the lowest-cost service area for patients receiving scheduled procedures, like knee replacements. She declined to share the financial details of Blue Shield of California's partnership with Gemini Health.
The partnership comes as prices for brand name prescription drugs continue to rise faster than U.S. inflation, although confidential manufacturer rebates can offset some of these increases. A recent GoodRx analysis found that pharmaceutical manufacturers hiked the list price of more than 830 drugs at the start of the year, representing the greatest rise in rates since GoodRx started tracking data in 2014. Prices rose an average of 4.6% in January.
These increases create life-or-death situations. GoodRx found that a $10.40 increase in out-of-pocket costs per prescription was associated with a 22.6% drop in consumption and a 32.7% increase in monthly mortality rates.
As a remedy, President Joe Biden has called for a cap on drug price increases and for allowing Americans to buy prescriptions from other countries.
During a press call with reporters last week, Justine Handelman, senior vice president of the Blue Cross and Blue Shield Association's office of policy and representation, said BCBSA "strongly supports taking action to address the high cost of prescription drugs to make sure patients get access to the prescriptions they need," noting that the invested in the not-for-profit Civica Rx drug company to bring lower-cost generic drugs to the market faster
Handelman did not directly come out in support–or opposition–of the Elijah Cummings Lower Drug Costs Now Act, or H.R.3, a measure introduced by House Democrats that aims to allow Medicare to negotiate directly with drug manufacturers on drug prices, offer these negotiated rates to individuals with private insurance, limit out-of-pocket drug costs and more. The bill was passed by the House and now is waiting on a vote in the Senate. The Congressional Budget Office estimated it could save more than $500 billion in drug costs.