Case: GoodRx: A Prescription for Drug Savings? (Case: SM-381; date: 03/24/24; length: 15 pages)
Authors: Golda Manuel, Julia Lin, and Professor Kevin Schulman, MD, MBA, Stanford Graduate School of Business
Introduction
As Ann Kim entered the patient’s room, she was relieved to see that she was ready and eager to go home; this particular stay in the intensive care unit had extended significantly beyond the anticipated three days. Kim came to counsel the patient on her discharge medications, which included a prescription for enoxaparin, an injectable anticoagulant to treat blood clots. As Kim explained the details of the medication and the anticipated $788.94 out-of-pocket cost (the patient did not have insurance), the patient’s jaw dropped, and she confessed that she could not afford the medicine. Without the means to fill the prescription, the patient would have to remain in the hospital because she did not have a safe discharge plan. If she left without the medication, she would risk exacerbating her condition and would likely face readmission.
Kim returned to her office to research whether the manufacturer offered any coupons or discount cards but instead stumbled upon GoodRx. She was previously unaware of the service and began exploring the GoodRx options. She typed in the patient’s prescription details and a coupon immediately appeared, allowing the patient to pay only $87.05 (an 89 percent savings) at the nearby pharmacy. She printed the coupon and excitedly returned to the patient’s room to tell her the good news.
Technology innovation continued to revolutionize the practice of medicine, especially in the realm of prescription medications. But these advances were not without cost or controversy, generating a national debate surrounding the value of the U.S. pharmacy market, which totaled $527 billion in 2022.1 In the United States, patients could find prescription medication prices through three different channels: at the pharmacy; through their insurance; or by searching for prices online, though the online search approach often proved unreliable. GoodRx was launched in 2011 to create a platform where patients could get “free access to transparent and lower prices for brand and generic medications.”2 By early 2024, the service had saved patients over $65 billion in prescription costs and had made medications more accessible, especially for those who lacked health insurance.3
Over the years, GoodRx expanded its services to include telemedicine, veterinary medicine, a prescription subscription service, and even manufacturing of generics. These services, however, had not matched the success of their prescription savings program. With impending regulatory pressure on the pharmaceutical industry, changes in the company leadership, and the increased scrutiny of pharmacy benefit managers (PBM) practices, the GoodRx business model could face significant challenges going forward.
Download the case here. For inquiries, contact Kevin Schulman kevin.schulman@stanford.edu