E-Prescription Networks Plan A Big Merger
6 CommentsBy Ed Silverman // July 1st, 2008 // 7:44 am
The deal is expected to accelerate the move toward paperless prescribing, which has so far been embraced by only a fraction of physicians. That’s because one of the networks is operated by big pharmacy benefits managers - Medco Health, CVS Caremark and Express Scripts - and the other by drugstore chains such as Walgreen, Rite Aid and Wal-Mart Stores.
Right now, about 35,000, or less than 10 percent of docs, prescribe drugs electronically, and roughly 25 million of the 4 billion prescriptions dispensed annually were sent electronically. The merged network believes the number of e-prescriptions could rise to more than 100 million this year, according to Rick Ratliff, acting ceo of SureScripts, one of the two networks.
Health insurers, business groups and the federal government have been pushing to put more info online, saying the technology will cut costs and save lives by avoiding medication errors. More than 1.5 million Americans are injured annually by such errors, according to a 2006 study by the Institute of Medicine, Bloomberg News notes.
The new entity, temporarily dubbed SureScripts-RxHub, will have access to records for 200 million patients through the benefit managers and 70 percent of US pharmacies. These are the existing sites for SureScripts and RxHub.
Ed Thomas
Merging networks will increase efficiency but it won’t change Rx writing behavior. If the average software/hardware solution for eprescribing costs $2,700 on a stand alone basis and doctors get their Rx pads for free, it’s a matter of simple economics. The doctor is going to stay with his Rx pad.
Dr. Sal Giorgianni
I am afraid there is some merit to what Mr. Thomas says. One of the impediments to electronic anything in health care is the reluctance of physicians to pay for hardware and for some of the older folks to invest time in learning how to use the softwear. Unfortunatly this all denys the younger practitioners out there the ability to use this technology.
Do others think that this is more of a consumer story or a business story?
Atlex
Dr. Sal,
The reason that this is a business story is that the next piece of significant Medicare legislation will likely include incentives and (near) mandates around eRx and, perhaps, EMR. Once Medicare reimbursement is tied to eRx or EMRs, physicians will be more inclined to make the move. Not only will that drive large purchases of hardware, there will also be a major battle between Pharma and health plans/PBMs over the use of eRx to impact prescribing. PBMs will want to use this medium to message regarding generics and therapeutic substitution, while Pharma will want to ensure that the medium is “ad free.”
Atlex
Matt C
Business or consumer… well who is who? I believe this to be a B2B story or a B2B2B story. Both of the organizations contract with the EMR vendors (and pay them) to use their service. In turn the Pharmacies pay them for the transaction. Creating a single network will really allow the end users, physicians to have greater access. Not only can they eRx to physical stores but also to mail order etc. This is a win for the consumer/patient.
Atlex’s point is very important eRx will become commonplace once the nations biggest payer mandates it. As for cost, there already exist a large number of eRx initiatives across the country, (NEPSI etc.) that are offering free services.
As for eRx impacting prescribing I don’t think that the pharma companies will have much of an impact. It will be the EMR/eRX application vendors that more will create additional functionality w/in their applications that will assist the insurers (& patients??).
I believe RXHub currently transmits formulary information to providers. Its taking that information and integrating it it with the application that will affect habits.
Now what pharma companies will be interested in is overall habits. Is there any mention of use of deidentified eRx data?
Mr. Co
It is interesting to note that the companies merging insist that there are no antitrust issues because the market value of both companies is low. However, if Medicare mandates ePrescribing, the new entity will have effectively cornered the market in rx data switching. If you think your pharmacy is paying too much now to transmit an rx, you ain’t seen nothing yet.
Matt C
I don’t think prices will be increasing…
Remember they are owned by the same people that are paying the fees. It does not make sense for them to increase fees.