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How does GoodRx make money?

Discussion in 'Pharmacy' started by Slippers, Apr 14, 2018 at 8:48 AM.

  1. Slippers

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    I am curious....
    The GoodRx website says that it makes money though pharmacy referral fees and ads on its website. It also mentions that they negotiate with the pharmacy through a PBM... but normally a PBM is contracted with an insurance company, where insured customers pay premiums, and obviously in the case of GoodRx, no one is paying insurance premiums.
    From browsing through other forums, it sounds like the pharmacy cuts some of its markup profits to use the GoodRx coupon, but not by enough to reduce the profit from selling the drug completely, in order to generate prescription traffic. So GoodRx 'makes money' in a sense by taking it from the pharmacy. Is this true?
     
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  3. HandsomeVampire

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    Yes.
    Which makes discount card a ridiculous idea and I have no idea how this came about.
     
  4. aznsensazn3

    aznsensazn3 Pharmacist

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    Even though goodrx says they aren't selling your data, they are definitely getting it and using it for something eventually. When you use discount cards, they get your name, address, phone number, medication used etc. Yeah you save some money but you lose your privacy and gain more spam calls and spam mail.
     
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  5. FinallyOnTrack

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    Here’s how the GoodRx discount card works..

    For instance, I’ll use Generic Zofran 4mg - #30

    Ondansetron has a huge U&C - so when pharmacies send a claim for it, it can range anywhere from $500 to $1,000 for a $5.00 bottle of it.. GoodRx reduces this “cash” price down to ~$10 to ~$40 (depending on what pharmacy you use) - the pharmacy makes a few dollars (maybe $5 at most) and then GoodRx send a clawback for the difference - IE: if you paid $45.00 at the pharmacy - then the pharmacy keeps $10 of it and GoodRx makes $35 from it..

    Majority of the Rx’s don’t have that large of a claw back - some are only $10-$15 but I guarantee you, EVERY SINGLE ONE will have that claw back added to it...


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  6. WVUPharm2007

    WVUPharm2007 imagine sisyphus happy
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    I didn't know they did claw backs. Shew, that's straight up grimy. If I owned an independent, I'd just just tell them I'd sell it to you for $40, no coupon needed, and keep the difference.
     
  7. lalaland33

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    I was told that they charge the pharmacy a small fraction everytime their coupon is used.
     
  8. CetiAlphaFive

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    That's what we do.

    We run the card, then reverse it and beat the GoodRx price by a decent amount, even if we're losing money, just to damage the brand of GoodRx.
    That way, the patient thinks "that card doesn't work and my pharmacy has good prices!"
     
  9. FinallyOnTrack

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    Exactly what I did when I was working at an independent... what’s worse is sometimes the clawback were so bad that we would end up losing money just to fill it...


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  10. FinallyOnTrack

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    Some discount cards charge the pharmacy $2.50 PER TRANSACTION (ie sending a claim = 1 transaction; reversing a claim = 1 transaction)..

    Discount cards are getting ridiculous to say the least :/


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  11. Slippers

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    Seriously? Wowww...... That doesn't sound like a 'small fraction' to me.

    That would make sense for the business, but .... *sigh* I think discount cards are the reason why some customers sit in the drive thru swearing up and down 'that's not how much I paid last time' when they know damned well they are lying, until in exasperation, I print their transaction history from their last 3 refills and hand it to them. I guess these discount cards give customers the impression that the pharmacy is a used car lot and they can just haggle over the prices holding up the line.

    Now I'm really curious. Why on earth would pharmacies EVER agree to this????
     
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  12. Gunter

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    So lets say a pharmacy buys a drug that costs $100 and sells it for $30 after GoodRx is applied. Pharmacy gets $10 and GoodRx gets $20. That's basically a net lost of ~$90 (buys a drug at $100 and get back $10) for the pharmacy depending on how much they mark up the price? Sorry, I'm still confuse
     
  13. FinallyOnTrack

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    Unfortunately, that is how it works.. especially if the cost just went up and it’s still in the limbo period to where the insurance companies (pbms) haven’t updated their MAC / WAC to pay for the increase..

    GoodRx doesn’t care if you make money or not.. I have seen several cards come back as a negative amount - after the clawback that is..


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  14. Son_Goku

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    The biggest loser here is still the patient who had to resort to using GoodRx in the first place.
     
  15. PharFromNormal

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    Everyone here seems to be describing how cash discount cards work which is important to understanding how goodrx makes money but it isn’t the same way.

    So when the patient pays $50 and the pharmacy gets to keep $40. The $10 goes back to the PBA (just think PBM it’s easier). Goodrx gets a cut of this $10 as a referral/marketing/advertising incentive for the PBA.

    Goodrx in a sense can act as a cash discount card card aggregator, sharing the lowest patient pay amount at various pharmacies which can all potentially vary in what PBA is being utilized for the purpose of that transaction. While in many cases it does, lowest patient pay amount does not equal lowest pharmacy reimbursement as you also need to factor in how big the behind the scenes clawback is. While despised by many pharmacy owners and outside of getting patients to check prices with their real prescription benefits, goodrx makes more money when they have more patients using their platform and can do this if more PBAs are partnering with them. This creates a competition for the lowest patient pay amount. Not really all that good for pharmacies but it depends on the metric (good for volume or likely bad for gross margin) you are going after.
     
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  17. CetiAlphaFive

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    Ha.

    You think anyone with an Internet connection had to "resort" to anything.

    The majority of goodrx printouts I see are Medicare D & B people trying to apply GoodRx to their copay
     
  18. Sparda29

    Sparda29 En Taro Adun
    Pharmacist Classifieds Approved

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    Yeah, I don't take discount cards here. I just offer discounted cash prices where we still make a decent profit.
     
  19. emergentmd

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    How is this true? Pharmacies, drug companies all make buying meds complicated in order to continue to skim as much as they can from the consumer. GoodRx is better than nothing and allows consumers to price compare.

    I have filled Drug A for years, had good insurance, and paid $150/mo until my deductible was met
    I went in to fill Drug A and cash paid, and have paid sometimes more and sometimes less than the $150/mo depending on the pharmacy.
    I used GoodRx and paid $30 for a 3 month supply of Drug A and knew which pharmacy was the cheapest. Even with Good RX, the prices could vary from $30-100

    So tell me how GoodRX and the like are not beneficial to consumers. This is the only way to be educated unless you call every pharmacy, ask for the cash price of every drug you have.
    Its crazy to me how two Walgreen and CVS using Insurance, cash pay, and good RX can be 100-200% different in prices.

    Atleast with good Rx, I can put in the drug and get a list of the prices.

    Pharmacies can be transparent but choose not to in order to keep skimming of the ignorant.

    Every Pharmacy has a cash Price. They could publish all Cash price online but choose not too because they know market forces would drive prices down and they won't be able to take in $100+ profit from some drugs.

    Good RX essentially publishes the "Cash Price" of the pharmacy.
     
  20. FinallyOnTrack

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    You call it skimming form the ignorant, I’ll call it balancing the books.

    Here’s why:

    I’ll use Humana Insurance for the shear fact that I absolutely despise that company.

    Humana charges the pharmacy $5.00 on EVERY SINGLE CLAIM - and if we fall under the top 20% on compliance we get that plus some back (mind you we are competing with MAIL ORDER PHARMACIES) so they, the insurance company, is putting the requirement on the pharmacy for patient compliance and adherence. If we do not fall under the top 20%, we get a small portion (maybe $3.00) back.. here’s the kicker - we they judge compliance, they don’t say 80% of our patients being compliant - they look at their entire network as a whole and take the top 20% (which in turns means about 92% compliance).

    Now, you say $5.00 isn’t a huge problem, but it is when the majority of the claims are for cheap drugs (IE: lisinopril) which they would have normally paid us maybe $2.00 to $3.00 total for it.. they are now taking $5.00 away - thus we are losing (NEGATIVE) $2.00 to $3.00 on the over all transaction...

    Wait a minute, did I say that right? Yes, I did.. We are basically giving the drug away for free and then also “loaning” $2.00 to $3.00 to Humana in hopes that we might make a little bit more money...

    Utterly ridiculous.

    But wait, it gets better - not only do we have to deal with Humana, the others are including Claw backs, DUR fees, etc.

    So, my reasoning for charging a cash paying customer $20.00 to $30.00 over the cost of the medication evens my books out to be sustainable..

    GoodRx takes away from that very thing.

    Mind you, I have a background with an independent - I made my prices reasonable - unlike walgreens and CVS.


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  21. emergentmd

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    I understand tight margins. I am pro business and you should be able to make a profit and be applauded for this. All businesses should strive to make as much money as they can. I don't mind different pharmacies charging X different prices X with different insurances X with different discount cards X depending on if deductibles are met. There are way too many different prices for the same drug that it gets confusing for the consumer.

    My point is, I am grateful for GoodRx b/c it helps to peel away the confusion with all of the pricing and insurance permutations. It allows educated consumers to price shop and compare different pharmacies vs being at the mercy of whatever the pharmacies wants to charge.

    Other than pure profit taking, why would CVS charge 100% more for some drugs compared to the Walgreen across the street? Fill another drug and Walgreen could be 100% more expensive than CVS.

    This would never happen with Lowes vs Home Depot because the prices are visible and market forces brings their prices in line.

    If pharmacies all posted their Cash price online, the price of drugs would be similar at all pharmacies and settle where market forces pushes them.

    Currently because no one posts their cash prices on line, it allows two pharmacies a block away to charge drastically different prices without any repercussions.
     
  22. FinallyOnTrack

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    They charge the difference because that’s how they make up for the loss that they take on being cheaper on other drugs..

    It’s no different than Walmart Grocery prices versus Winn Dixie’s or Publix’s, etc..

    You gotta make up the different somewhere..

    Look at Publix - they offer a discount card program that is free (if I’m not mistaken) the brings their “cash” price down significantly.. yet if you asked for a cash price it’s generally a lot more expensive..


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  23. SouthernRetailRPH

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    Why not just distribute the discount cards and earn $1 per claim when they are used? Check it out here: http://www.YourRxHelp.biz/help1023 you might as well since all the chains accept them anyway and the techs are putting cash patients on discount cards to save them money
     

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