How does GoodRx make money?

This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.
Members do not see this ad.
radio frequency said:
I’m curious about this: I get rxs often from providers with random GoodRx coupon codes listed on them. Are they getting kickbacks when pharmacies bill these codes?
Click to expand...

If the doctor isn't then someone in the office or software provider is, whoever added the code, probably at least $1-2.50 per paid claim
 
TikiTorches said:
I dont have software. I just hand out cards. No kickback.
Click to expand...
What they mean is that the person sending the cards gets paid every time they're used.

The cards don't actually reimburse anything. they're essentially a scam for the pharmacy.

Your patients would likely be much better off finding an independent that would be willing to work with them on pricing.


Also, deductibles don't just go away.
They're like taxes. They get paid eventually.

Using a discount card just postpones paying the deductible, but doesn't reduce the total deductible amount
 
At least the patient can pay less for their meds as they may never hit these huge deductibles.

It is very hard for my patients to find independent pharmacies
 
TikiTorches said:
At least the patient can pay less for their meds as they may never hit these huge deductibles.

It is very hard for my patients to find independent pharmacies
Click to expand...

People starting new independent pharmacy locations have no idea what they're getting into. The landscape has been desolated by PBMs and insurance company for years, yet people still think they can open up an independent and "get rich." With mail order becoming cheaper and more convenient, fewer and fewer patients go to local pharmacies unless it's something that's actually urgent. Maybe tamsulosin or an antibiotic for their child. I've seen too many negative reimbursements or deductions from the pharmacy for FILLING a prescription for a patient. A sad time to be an independent owner.
 
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.
 
CetiAlphaFive said:
What they mean is that the person sending the cards gets paid every time they're used.

The cards don't actually reimburse anything. they're essentially a scam for the pharmacy.

Your patients would likely be much better off finding an independent that would be willing to work with them on pricing.


Also, deductibles don't just go away.
They're like taxes. They get paid eventually.

Using a discount card just postpones paying the deductible, but doesn't reduce the total deductible amount
Click to expand...
It's only a scam if the pharmacy is charging way too much compared to the cost of a medication.
 
CetiAlphaFive said:
"Too much"
Compared to what?

I'm gonna go ahead and print up some "50% off your hospital visit!" discount cards.
Click to expand...
I'll give you an example.

Had to pick up some griseofulvin for my kid's tinea capitis back in the fall. The cash price at Wal-Mart for 8 ounces was $600. The distributor I used in my old office when I dispensed medication had that same amount for $50. I should think that marking something up by over an order of magnitude is too much, wouldn't you?

My local hospitals actually offer pretty good cash discounts as is. Had to take another kid to the ED for croup at 2am. Total bill was around $2000. After the 50% cash pay discount and 30% rapid pay discount (if paid within 30 days), I got away with paying just under $600 for nebs, decadron, continuous monitoring, and about 2 hours actually in a bed.

Seriously, all that ED time would have cost less than a medication that's older than I am.

But sure, the hospital is the problem.
 
VA Hopeful Dr said:
It's only a scam if the pharmacy is charging way too much compared to the cost of a medication.
Click to expand...

The scam is more than just the discount though, it also has to do with processing fees and claw backs. Why should the pharmacy pay for the honor of running the discount card?
 
VA Hopeful Dr said:
I'll give you an example.
Had to pick up some griseofulvin for my kid's tinea capitis back in the fall. The cash price at Wal-Mart for 8 ounces was $600. The distributor I used in my old office when I dispensed medication had that same amount for $50. I should think that marking something up by over an order of magnitude is too much, wouldn't you?
My local hospitals actually offer pretty good cash discounts as is. Had to take another kid to the ED for croup at 2am. Total bill was around $2000. After the 50% cash pay discount and 30% rapid pay discount (if paid within 30 days), I got away with paying just under $600 for nebs, decadron, continuous monitoring, and about 2 hours actually in a bed.
Seriously, all that ED time would have cost less than a medication that's older than I am.
But sure, the hospital is the problem.
Click to expand...
Tablet or suspension?
Extreme difference in cost.

Oh thank goodness the hospital only charged $600 for $1 worth of meds and 2 hours of nurse payroll.
What a deal.

Time in a special room in the hospital should cost more because everyone agrees it should cost more.
 
owlegrad said:
The scam is more than just the discount though, it also has to do with processing fees and claw backs. Why should the pharmacy pay for the honor of running the discount card?
Click to expand...
And that's certainly fair. If the cash pay markups weren't ridiculous to begin with, this wouldn't have become a thing. Its also why, as many here have pointed out, independent pharmacies can usually beat the goodrx prices on their own.
 
CetiAlphaFive said:
Tablet or suspension?
Extreme difference in cost.

Oh thank goodness the hospital only charged $600 for $1 worth of meds and 2 hours of nurse payroll.
What a deal.

Time in a special room in the hospital should cost more because everyone agrees it should cost more.
Click to expand...
Suspension. I know there's a difference in cost - as mentioned, I looked it up with my distributor before posting.

As for the ED bill, you're forgetting a few points. Like the serial exams by the physician.

And the RT's time.

And the equipment used.

For everything that was done, had it been done in my FM office the price would have been about the same.
 
This is the problem in medicine in general especially in dermatology. Pharmacies should have more leeway to interchange similar creams/ointments/solutions in the same potency class. In general I don't care which one patients get (clobetasol, halobetasol, betamethasone augmented diproprionate) but the prices even on generics go way up because there's only one manufacturer of each. Even within Medicaid brands they can't all be on the same page and preferred tiers are different.

My own clinic overcharges cash patients as some sort of way to recoup costs when it should really be the opposite. More people with catastrophic only coverage will be desiring to access care for a discounted rate. It should be discounted as they pay up front and they actually care about the costs of the care they receive rather than seeing the bill 3-4 months later and then getting up in arms about it. The monster needs to be tamed.

As for goodrx I only use it for hydroquinone 4% cream as I know it won't be covered by insurance. If we had another way of searching prices (or patients did) the middleman could be cut out. If an independent distributor had a set price for it and advertised that. If not special card would be required physicians would send all of their patients to that pharmacy. It's a competitive environment but that's how you get business. The same goes for specialty pharmacies. If you want me to send you prescriptions the pharmacy should do the PA and make it easier for us to get medications not harder.
 
There is a lot of overhead to pay at a hospital. The level of care is much higher and the hospital building itself isn't cheap. Before the hospital was finished being built, it probably needed upgrades/additional permits to meet code.
 
ExpressMaiL said:
There is a lot of overhead to pay at a hospital. The level of care is much higher and the hospital building itself isn't cheap. Before the hospital was finished being built, it probably needed upgrades/additional permits to meet code.
Click to expand...

That's the danger of being in the hospital (other than nasty hospital acquired infections). Outpatient medicine should be where a vast majority of healthcare should be delivered to be efficient. Facility fees, ORs, nurses, administrators all complicate medicine and cost money. Our system needs to change to help redirect more care to prevention.
 
VA Hopeful Dr said:
It's only a scam if the pharmacy is charging way too much compared to the cost of a medication.
Click to expand...

1. I agree, $600 for a $50 med is too steep (assuming your supplier and Wal Mart’s charge approximately the same price for the drug).

2. But I don’t think a few cherry picked examples can generalize the industry as a whole, for either the hospital or the retail pharmacy businesses. Consider:

a) A number of prescriptions are dispensed in pharmacies every day that, after insurance reimbursement, result in a net loss for the pharmacy. (A recent example that stands out in my mind is generic fluoxetine...reimbursement significantly below cost). If you’re going to lose money somewhere, you have to make it up somewhere else. (Maybe not all in one griseo script, but somewhere).

b) From my own experience: my dad was inpatient and was having chest pain. He asked if he could take a nitro that he had in his pocket and was told to go ahead. Nurse charted it. When he got his itemized bill, he was charged $2 for taking his own med. This was 25-30 years ago. Was Nitrostat so expensive back then?

3. I think there is...corruption?...stupidity?...problems with “pricing” in all areas of health care. My biggest complaint from the pharmacist point of view is the challenges faced by independents in trying to stay afloat amid the fees/clawbacks/poor reimbursements.
 
TMP-SMX said:
That's the danger of being in the hospital (other than nasty hospital acquired infections). Outpatient medicine should be where a vast majority of healthcare should be delivered to be efficient. Facility fees, ORs, nurses, administrators all complicate medicine and cost money. Our system needs to change to help redirect more care to prevention.
Click to expand...

Honestly, it will probably never change. Our entire economy would need to collapse first for anything to happen... and it still might not change the expensive nature of healthcare.
 
Rouelle said:
1. I agree, $600 for a $50 med is too steep (assuming your supplier and Wal Mart’s charge approximately the same price for the drug).

2. But I don’t think a few cherry picked examples can generalize the industry as a whole, for either the hospital or the retail pharmacy businesses. Consider:

a) A number of prescriptions are dispensed in pharmacies every day that, after insurance reimbursement, result in a net loss for the pharmacy. (A recent example that stands out in my mind is generic fluoxetine...reimbursement significantly below cost). If you’re going to lose money somewhere, you have to make it up somewhere else. (Maybe not all in one griseo script, but somewhere).

b) From my own experience: my dad was inpatient and was having chest pain. He asked if he could take a nitro that he had in his pocket and was told to go ahead. Nurse charted it. When he got his itemized bill, he was charged $2 for taking his own med. This was 25-30 years ago. Was Nitrostat so expensive back then?

3. I think there is...corruption?...stupidity?...problems with “pricing” in all areas of health care. My biggest complaint from the pharmacist point of view is the challenges faced by independents in trying to stay afloat amid the fees/clawbacks/poor reimbursements.
Click to expand...
Oh yeah, completely agree that its all a huge cluster. Some general price transparency in areas like pharmacy and outpatient medicine could make a world of difference in fixing that.
 
VA Hopeful Dr said:
Suspension. I know there's a difference in cost - as mentioned, I looked it up with my distributor before posting.

As for the ED bill, you're forgetting a few points. Like the serial exams by the physician.

And the RT's time.

And the equipment used.

For everything that was done, had it been done in my FM office the price would have been about the same.
Click to expand...

Ohhhh, so I'm oversimplifying a complex system I don't really know a lot about?

Why on earth would I have done that?

😉
 
CetiAlphaFive said:
Ohhhh, so I'm oversimplifying a complex system I don't really know a lot about?

Why on earth would I have done that?

😉
Click to expand...
Cause you're a meanie poo head?

Interestingly, there are already a few goodrx-like programs already set up for dealing with hospitals. MDsave - Feels Better Already
 
ExpressMaiL said:
Honestly, it will probably never change. Our entire economy would need to collapse first for anything to happen... and it still might not change the expensive nature of healthcare.
Click to expand...

Our economy will collapse if we continue the same rate of increase in healthcare expenditures. Even accounting for GDP growth it's a staggering rate. The biggest issue facing medicine is proving that prevention of the disease is worth the cost rather than paying for the top 5% users of medicine costing us half of all national healthcare expenditures. As long as we continue to have an aging population and don't manage behaviors leading to obesity and chronic illness it's not a good future.
 
ExpressMaiL said:
What is the most outrageous reimbursement you guys have seen for a retail setting prescription?
Click to expand...
-$80.00 on a testosterone.

(Don't dox me if you're reading this and remember the message I sent you, Cynical Pharmacist)
 
VA Hopeful Dr said:
Oh yeah, completely agree that its all a huge cluster. Some general price transparency in areas like pharmacy and outpatient medicine could make a world of difference in fixing that.
Click to expand...
That is why i like goodrx. Prices are clear
 
The fact that physicians are defending GoodRx is extremely frustrating and scary. You better hope that this trend doesn't come to medicine. With the Trump administration now requiring prices of procedures to be made public, it's a very real possibility. Discount cards hurt patients.
 
BenJammin said:
The fact that physicians are defending GoodRx is extremely frustrating and scary. You better hope that this trend doesn't come to medicine. With the Trump administration now requiring prices of procedures to be made public, it's a very real possibility. Discount cards hurt patients.
Click to expand...
I'd love for price transparency in medicine. Would. Love. It.

That's really all we use goodrx for. If I could go to some other, non discount card site and find out what patients would pay for drugs at your various pharmacies I'd gladly use that instead.

But as there is no other way to find out prices, we're stuck.
 
ExpressMaiL said:
Terrible. No independent can handle a single rx hit like that.
Click to expand...

We have the same thing seeing Medicaid. I work in academics and everyone else avoids those patients like the plague. Private practice specialists lose money seeing those patients due to frequent no shows and poor reimbursement. I’d imagine it’s a similar issue when pharmacies are attempting to run a profit. We can’t ethically turn away patients but the system should be fixed.
 
Yes it's why offices that accept these patients are so chaotic. They probably need to book 3x the amount as 2/3 of patients will be no shows. However, there will be instances where they actually show up and it's a CF at that point.
 
BenJammin said:
The fact that physicians are defending GoodRx is extremely frustrating and scary. You better hope that this trend doesn't come to medicine. With the Trump administration now requiring prices of procedures to be made public, it's a very real possibility. Discount cards hurt patients.
Click to expand...

Feel free to reach out to your community physicians with pricing on cash meds with good service and prices we wouldn’t need the cards. If prices are controlled by someone other than you your labor can be negotiated to nothing or less than nothing without your control. That’s what happens when there’s too many people along the way skimming from the top.
 
ExpressMaiL said:
Terrible. No independent can handle a single rx hit like that.
Click to expand...

The worst part is that it was a clawback.

TMP-SMX said:
Feel free to reach out to your community physicians with pricing on cash meds with good service and prices we wouldn’t need the cards. If prices are controlled by someone other than you your labor can be negotiated to nothing or less than nothing without your control. That’s what happens when there’s too many people along the way skimming from the top.
Click to expand...
I don't know why the physican thinks they need to involve themselves in pricing stuff in the first place.
What we usually do is prepare a handful or data-set, depending on the physician, of examples showing how much more efficient for them and cost effective for the patient we are.

If there's something they can't afford, we'll find a manufacturer's discount if it's brand, or bring it down to our rock bottom price.

GoodRx isn't as accurate as you guys seem to believe.
Many lower quality pharmacies have techs that won't even type the goodRX info into the system, and instead just auto-input whatever discount card they have memorized.
This saves them the time of inputting and processing the 7 sticky discount cards floating around in the purse
 
Last edited:
TMP-SMX said:
We have the same thing seeing Medicaid. I work in academics and everyone else avoids those patients like the plague. Private practice specialists lose money seeing those patients due to frequent no shows and poor reimbursement. I’d imagine it’s a similar issue when pharmacies are attempting to run a profit. We can’t ethically turn away patients but the system should be fixed.
Click to expand...
Academics get money from a lot of other sources, like the government. Pp docs only get money from patients
 
CetiAlphaFive said:
The worst part is that it was a clawback.


I don't know why the physican thinks they need to involve themselves in pricing stuff in the first place.
What we usually do is prepare a handful or data-set, depending on the physician, of examples showing how much more efficient for them and cost effective for the patient we are.

If there's something they can't afford, we'll find a manufacturer's discount if it's brand, or bring it down to our rock bottom price.

GoodRx isn't as accurate as you guys seem to believe.
Many lower quality pharmacies have techs that won't even type the goodRX info into the system, and instead just auto-input whatever discount card they have memorized.
This saves them the time of inputting and processing the 7 sticky discount cards floating around in the purse
Click to expand...

Manufacturers discounts don't apply to Medicaid/Medicare patients though like I said I don't use them for non cosmetic scripts.

TikiTorches said:
Academics get money from a lot of other sources, like the government. Pp docs only get money from patients
Click to expand...

My program gets no CMS money for residents. Hospitals get CMS money for residents and that's not shared with us. Life in dermatology.
 
TMP-SMX said:
Manufacturers discounts don't apply to Medicaid/Medicare patients though like I said I don't use them for non cosmetic scripts.
My program gets no CMS money for residents. Hospitals get CMS money for residents and that's not shared with us. Life in dermatology.
Click to expand...

We use PAN for some Medicare / caid people
 
BidingMyTime said:
If you work for a chain, this is a good way to get fired. And don't most of these cards have a clause in the user agreement that an employee of a pharmacy can't sign on as a distributor of them?
Click to expand...

I worked at CVS for 4 years overnight and every night I ran the cash/loss report to find all cash prescriptions sitting in the bin and re-billed every single one of them under my card which I "distributed". Nobody ever knew. I made $1.75 per claim. I was bringing in an extra $1,200 cash every month for about 20 minutes of work.

It's a conflict of interest, and you can get fired if your employer finds out. I didn't say anything. Now, since I will never go back to CVS (I am DNR or "Do Not Rehire"), I don't care.
 
Cards work like this:

Pharmacy has a price for medication. Pharmacy contracts with PBMs and as part of contract agrees to take their discount cards. When a card is used, patient gets a discount. Cash price for for Lipitor 10mg, for example, will go down from $200 to $50. Cost may be $4. Pharmacy's profit decreased from $196 to $46, but they still made a profit. PBM charges pharmacy a fee (percentage) to use discount card, which pharmacy pays. PBM pays out a company to run the discount card business. Company pays out distributors to literally distribute the card. I am a distributor, and literally anyone, your mom, dad, brother, sister, grandfather, grandmother, etc can be a distributor.
 
farmadiazepine said:
Cards work like this:

Pharmacy has a price for medication. Pharmacy contracts with PBMs and as part of contract agrees to take their discount cards. When a card is used, patient gets a discount. Cash price for for Lipitor 10mg, for example, will go down from $200 to $50. Cost may be $4. Pharmacy's profit decreased from $196 to $46, but they still made a profit. PBM charges pharmacy a fee (percentage) to use discount card, which pharmacy pays. PBM pays out a company to run the discount card business. Company pays out distributors to literally distribute the card. I am a distributor, and literally anyone, your mom, dad, brother, sister, grandfather, grandmother, etc can be a distributor.
Click to expand...
Huh, its almost like if your original cash price was $50 this wouldn't even be an issue...
 
VA Hopeful Dr said:
Huh, its almost like if your original cash price was $50 this wouldn't even be an issue...
Click to expand...
This is why we undercut discount cards when we can.

I want the patient to lose confidence in the concept of discount cards.

At the very least, they should be regulated
 
VA Hopeful Dr said:
Huh, its almost like if your original cash price was $50 this wouldn't even be an issue...
Click to expand...

Why should GoodRx dictate my cash price? Who are you to tell me that my price is too high? This is a 2 way street my friend. If you want to race to the bottom we'll bear hug and take you with us
 
BenJammin said:
Why should GoodRx dictate my cash price? Who are you to tell me that my price is too high? This is a 2 way street my friend. If you want to race to the bottom we'll bear hug and take you with us
Click to expand...

We are all in it together. If we all overpay for prescription medications (or hospital care) our taxes or insurance premiums go up. If patients pay cash often it saves all of us money if the administrative wheels don't have to be greased and they are bypassed.
 
You must log in or register to reply here.

Similar threads

S
How does the big beautiful bill impact pharmacy education?
Replies
4
Views
2K
clarkbar
C
VA77
Who needs GoodRx
Replies
26
Views
3K
Old Timer
Old Timer
B
Pharmacy managers: First day at a long-term care pharmacy
Replies
0
Views
886
bigpilllilpill
B
N
What is a Pharmacy Residency for Neurology Like? How Do I Make Myself Competitive?
Replies
13
Views
2K
BC_89
BC_89
Blueberry Tea
New to Walmart pharmacy, how to get better at visual verification?
Replies
1
Views
2K
quickpic007
quickpic007
Top Bottom