The growing popularity of prescription drug discount cards is causing significant challenges for retail pharmacy chains.
According to Bank of America analyst Allen Lutz, these discount cards, including those offered by GoodRx, are putting pressure on the profit margins of traditional pharmacies.
This shift in consumer behavior has led to pharmacy benefit managers (PBMs) gaining an advantage at the expense of conventional pharmacies, the report highlights.
GoodRx, a prominent player in the prescription drug discount card market, has forged partnerships with various PBMs, including CVS Health’s Caremark and MedImpact, stated Lutz in the report. These collaborations have the potential to further erode the profitability of high-margin cash-pay prescriptions for pharmacies.
In navigating this evolving landscape, CVS Health, with its Caremark PBM, is better positioned compared to Walgreens Boots Alliance. CVS can capture fees related to these new agreements, whereas Walgreens faces limitations in this regard, as stated in the report.
On September 13, GoodRx and MedImpact announced their partnership, aiming to provide lower prices on prescription medications at the pharmacy counter.
Under this new savings solution, eligible MedImpact members filling generic prescriptions will have their benefits compared to GoodRx’s prices, with the lowest price automatically applied to the member’s deductible, eliminating the need for price comparisons by individuals.
Two months earlier, in July, GoodRx and CVS Caremark unveiled a program to assist members in paying lower out-of-pocket prices for generic medications at the pharmacy counter.
The Caremark Cost Saver program offers CVS Caremark’s eligible members automatic access to GoodRx’s prescription pricing, while maintaining CVS Caremark’s drug safety review.
GoodRx has been actively working to build relationships with retail pharmacies and discover innovative approaches to help them manage their pricing margins and growth targets. GoodRx Interim CEO Scott Wagner emphasized this during the company’s quarterly earnings call on August 9.
“We’re in the process of working through these contracts retailer by retailer and plan to continue to do so throughout the second half of the year,” Wagner stated at that time. “We believe that we’re creating the foundation for long-term growth for GoodRx that adds value to both retailers and PBM partners alike.”
