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The federal government closes in on healthcare pricing transparency—here’s what digital health players are doing about it

The news: The Biden administration is doubling down on drug pricing transparency with a new plan to lower drug prices.

  • This will allow the CMS to negotiate drug prices, limit price increases, promote industry competition, and support medical innovations that can combat high healthcare costs.
  • The 29-page plan also includes initiatives for capping Medicare members’ out-of-pocket costs, shortening drug manufacturers’ exclusivity periods, and reducing regulatory barriers for lower-priced generic medications.

Behind the decision: Back in January, the federal government rolled out its hospital price transparency rule that requires hospitals to fully disclose the prices they negotiate with payers and the cost of a medical service before a patient receives it.

Why now? Drug prices have reached an all-time high.

  • At the beginning of this year, pharma giants like Bristol Myers Squibb, Pfizer, and Abbvie raised the US list prices of more than 500 drugs, according to an analysis by healthcare research firm 46brooklyn.
  • Retail prices for the most common prescription drugs are increasing twice as quickly as inflation, according to AARP’s 2021 Rx Price Watch report.
  • The price hikes came as pharma companies are reeling from lower demand for some drugs due to the pandemic-induced drop in doctor visits.

Why it matters: Drug unaffordability and lack of pricing transparency are top contributors of low medication adherence.

  • 18.7% of US adults said they delayed a refill, and 16.4% said they rationed medication to extend a prescription because of drug costs, per GoodRx’s 2021 Medication Debt Survey.

The opportunity: Digital health players are already one step ahead of the price transparency game.

  • At the same time, Athenahealth’s digital provider support company Epocrates is expanding its partnership with patient access solutions company ConnectiveRx which delivers point-of-care messages to patients regarding drug cost-savings options.
  • And it’s not the first digital health player to start chipping away at healthcare pricing transparency.
  • For example, GoodRx recently partnered with e-prescription company Surescripts to give its users access to discount price information. And healthcare price transparency startup Turquoise Health has been building out its platform to let consumers compare costs of care and insurance rates for the most affordable healthcare products and services in their area.