BLOG: Amazon PillPack: A solution to price gouging?
Cruising along Interstate 77, employing my Google-Fu and doing background research for a patent application (I’m a scientist! Who knew?!), I had an epiphany about how we can address at least some parts of our drug cost crisis. Admittedly this occurred while I was perusing Twitter (SQUIRREL!), but anyway there I was reading @ChrissyFarr’s latest scoop about health care.
In 2017 Amazon bought an online pharmacy called PillPack. As you can imagine, this has caused all kinds of distress in the pharmacy and pharmacy benefit manager (PBM) industries, their collective disclaimers to the contrary notwithstanding. Ms. Farr highlights how disingenuous they are when she reviews a lawsuit that has been brought by a PBM (CVS) that sought to prevent a prior employee from joining Amazon PillPack. It sure looks like the PBMs of the world are worried that Amazon will make an end around and negotiate directly with insurance companies to deliver medicine to patients.
New term: “disintermediate.” To cut out the middleman. Nice.
How might this play out in even simpler terms? I have made no secret of my fondness for the “specialty pharmacy” programs utilized by multiple drug makers who run up against the cynical barriers erected by PBMs. Indeed, the concept of a specialty pharmacy that delivers a medicine with a capped patient cost is so powerful that even the goofs at Valeant-era Bausch + Lomb couldn’t torpedo it (use your own Google-Fu and search “Philidor,” or read my post). What if Amazon PillPack just became the world’s biggest specialty pharmacy? It could begin with literally hundreds of generic meds in all walks of medicine, including eye care. Think: latanoprost, prednisolone, moxifloxacin, etc.
Where this model would really shine is for tiny niche medications used primarily off label (including my poor, beloved AzaSite) and new branded drugs that enter a field with well-established players (I’m looking at you, Cequa). We as a patient citizenry have been so abused by the cynicism of the PBM model that we would be thrilled to have the opportunity to pay 2009 prices for many of our medicines.
Ask one of your patients if they would be willing to pay $100 for a month’s supply of Restasis in dropperettes.
Listen, I share everyone’s concern about the internet behemoths’ power over our lives, and I totally get the fear that Amazon in particular is so big that it can drive entire markets. But frankly, I just can’t work up any sympathy for CVS and that crowd in this fight. I would love to be a fly on the wall listening to direct negotiations between Amazon PillPack and
Aetna over what it will pay to cover Xiidra. For that matter, I can’t see any reason why Amazon PillPack wouldn’t also negotiate the base price of Xiidra with Shire, er, Takeda, I mean, Novartis. We should all be for anything that lowers the direct cost of medications for our patients.
And gets the rest of us out of the payment game.
Disclosure: White reports he is a consultant to Allergan, Shire, Sun, Kala, Ocular Science, Rendia, TearLab, Eyevance and Omeros; is a speaker for Shire, Allergan, Omeros and Sun; and has an ownership interest in Ocular Science and Eyevance.