7 ms·

Pharmacy Startup PillPack to Be Terminated by Express Scripts

51 points by chermanowicz 10y ago

lbhnact 10y ago
Just chiming in here to help bring attention to the Express Scripts near-monopoly. Their market position and it's implications are surprisingly under-reported. Surprised the HN crowd doesn't get more riled up about this, given the implications for science, opiate abuse, and other opportunities missed for improving the health system.
- nerdponx 10y ago
  Yep, I never even heard of this company before. This is why I read HN.
  - cylinder 10y ago
    I've known about it for a long time, and several times I've tried to read about them and figure out what exactly they do. "pharmaceutical benefits management." Okay, not sure what that actually means. I figure it's just another business / industry that exists solely because of the disastrous healthcare system in America, and would not otherwise be needed if the government managed pharmaceutical access so everyone has access to them.
    - refurb 10y ago
      Express Scripts does a few things. They are a pharmacy benefits manager (PBM). PBMs sell pharmacy plans to other insurance companies and employers. They basically say "Pay us $X and we'll handle all of the pharmacy insurance work for you". They are also a specialty pharmacy and a mail-order pharmacy. I'm sure there are a few other services they offer as well.
- ck2 10y ago
  Isn't the lack of ability to negotiate better prices under obamacare a much much bigger abuse of health care? The lack of ability to (legally) import from Canada too? And the fact all prices are becoming geared only for people with insurance to milk the system. I don't have insurance and my script went from $4 to $80 when Target cancelled support for people without insurance. Walmart is the last place now and how long will that last when they figure out there is no competition.
  - lbhnact 10y ago
    I agree the non-negotiation was a major compromise. However it was, as I am told, basically required to get the ACA passed at all. The drug companies were represented by Billy Tauzin [1] who, as I am told by insiders that worked directly with him, was able to get the Pharmacos to not fight the ACA. Their support was not just critical, but a necessary factor in getting anything done. It was a trade-off, whether or not is was worth it is hard to know. As for your own care, I am sorry to hear about the lack of insurance. Some states (for often historical market reasons) make it hard for providers to sell or even give medications to their patients, which is also part of this problem. If you look around, there are occasionally 'Direct Primary Care' providers or community clinics that stock generics for their own patients and will provide them at no or low-cost. Many organizations and states have processes for the uninsured to obtain medications at low cost as well. If you find a clinic with PCPs who are mission-driven, and they are out there, they perhaps can help you enroll. [1] https://en.wikipedia.org/wiki/Billy_Tauzin https://en.wikipedia.org/wiki/Billy_Tauzin
    - hga 10y ago
      It was a trade-off, whether or not is was worth it is hard to know. It depends on whether you care about there being any new drugs developed in the future or not. ck2 is having trouble paying his current drug costs and would seem to be in one camp. I can pay mine---granted, they've all gone generic---but with a barely, maybe, kinda treatable genetic in my case but generally common condition for which nobody has come up with a cure including an effective drug, I'm in another camp (heck, if new drug discovery had been shut down before the mid-90s or so, I might well be dead, or suffering enough you wouldn't be blessed with my contributions to HN). And as more and more people die due to antibiotic resistance infections I suspect more people will shift into mine. Ditto importing from Canada, with their small market the easiest thing for drug companies to do is simply cease exporting brand name drugs to them so they don't suffer from re-importation and still have something of a new drug development budget.
- hga 10y ago
  Errr, I wouldn't say they're that close to having a "near-monopoly". Or at least, back in 2011 I chose a Medicare Part D plan that used them, and they were so horrible I've made a point to never use a plan that uses them again, and that hasn't been difficult. For example, they didn't succeed in buying Caremark, bought by CVS, and that's whom I'm using this year, although I was not pleased when they bought Medco recently.
  - lbhnact 10y ago
    Apologies, it was an early morning... I meant to point out the Express Scripts-Surescripts connection (and CVS, other pharmacy stakeholders...), which is part of why I think they may have dropped PillPack. PillPack, and some of the other startups and smaller actors in the space, are potetial threats to the established players, like Express Scripts, that essentially collude through Surescripts to protect their access to the patient-provider origination channel. It's the Surescripts network that has the near-monopoly on prescription EDI, and it acts to protect it's members interests. The tech is ancient and entrenched in a way that I imagine would greatly upset the HN crowd if they looked at it more closely. Regulatory actors have not been paying enough attention here IMHO, and the nature of the market has led to an opaque situation that's prevented opportunities to advance research on important questions for social issues and patient care. [1] http://surescripts.com/support/faqs/general/detail/who-owns-surescripts http://surescripts.com/support/faqs/general/detail/who-owns-...
    - Gratsby 10y ago
      The amount of overprotective entrenched businesses in the medical industry is insane. But that's also one of the reasons the industry is attractive to new ventures and businesses -- it's just plain lucrative. Opportunity abounds for people who have the wherewithall and resources to fight the long battle it takes to earn a stable spot in the crowd.
    - maxerickson 10y ago
      Is there even a regulator that would have jurisdiction to do something meaningful? Or is it more of a legislative issue?
wsh91 10y ago
If you like what PillPack is doing and you take meds, consider switching to them. :) I've had nothing but great service and, as someone on about eight pills a day, it's made part of my life much easier.
Cypher 10y ago
I can't see the content & the link asks me to turn off my anti virus.
- nissehulth 10y ago
  They won't let me in even with a fresh Chrome without any plugins at all. They still tell me to disable adblock. Their adblock-checking seems very broken.
  - quotha 10y ago
    me too, forbes is against privacy badger
ThePhysicist 10y ago
It seems that Express Scripts is simply reluctant to continue their business relationship with PillPack since they got too big and now pose a serious threat to their own business model (which probably relies on mail orders as well). It's of course understandable that they don't want to let a startup take away a profitable market segment from them, but it seems that they do this by making use of their market-controlling position, which is probably illegal (IMHO). Reading the article it's really hard to say what is really going on though as the journalist makes very little effort to uncover the real motivations behind the actions of the two companies.
- refurb 10y ago
  From what I know about Express Scripts, it's probably more about money than market share. ESI has over 1/3rd of the market and is a huge player. They are notorious for driving down costs in a very aggressive way. I would imagine they wanted to cut way back on how much they paid PillPack and PillPack said "no".
koolba 10y ago
From the article (emphasis mine): > “We have historically been contracted with Express Scripts as a retail pharmacy, which is what we’re licensed as in the state of New Hampshire”–where the physical pharmacy is located–”and they want us to contract as a mail-order pharmacy,” he explains. Though the retail-vs.-mail order question isn’t a legal one, traditionally pharmacies that dispense 30-day prescriptions with typical copays are considered retail, and those with 90-day prescriptions and discounted copays are mail-order. Although PillPack does mail its medications to patients (that’s a major selling point), everything else about the business model hews closer to the definition of a retail pharmacy. I would think mailing the meds to the customer is the defining characteristic of a mail order pharmacy.
- hga 10y ago
  That's something only the consumer cares about. As noted, the orgs above the pharmacy divide them into 30 and 90 day groups, with different policies and prices for each. Also, some retail pharmacies will do the 90 day benefits thing as well as the normal 30 days, I get the impression this is better for some benefits managers than setting up their own mail order pharmacy or contracting with someone like Express Scripts. If I remember correctly, the Humana only Wal-Mart plan does this, as well as others (I learn about this sort of thing every year when I examine Medicare Part D plans and chose one for the next year).
- URSpider94 10y ago
  For almost any medical plan, "mail order pharmacy" specifically refers to a company that provides a 90-day supply of a prescription for a chronic condition at a special reduced co-pay. Most health plans let you go to the pharmacy of your choice for regular 30-day scripts, but require you to use a single provider (typically either Express Scripts or CVS) to get the 90-day discount. Insurance companies love these services for the same reason we love Amazon -- high volume drives price efficiency, as does eliminating the need for a retail storefront with lights and chairs and Muzak and the like. The retail pharmacy business is a race to the bottom these days. Most small players have been pushed out by declining reimbursement rates, and the big guys barely disguise how little they care about customer service. It's clear that the benefits companies don't want to see another name brand come onto the scene and demand to take some of their profits,especially one with the possibility to gain a loyal national customer base by providing an innovative service.
transfire 10y ago
Boo-hoo, America. Your healthcare system exists to make people rich, not benefit peons like yourself.
- dang 10y ago
  You can't post flamebait like this here. We ban users that do this, so please don't do it again.
joeskyyy 10y ago
Pillpack user here, and (unfortunately) an express scripts user. I take 18 pills a day to manage some kidney issues I have, and Express Scripts doesn't have a good track record with getting your meds to you on time. If I don't have some of my medications, I could die. Not to mention, it's going to be a big pain in the ass to count out all those pills, AND take up a ridiculous amount of space with all the pill bottles, and pill trays. Incredibly pissed off about all this... Edit: forgot to mention my amazing feelings towards Pillpack. TJ (the CEO) has contacted me directly multiple times to make sure everything has been great, and every interaction I've had with them is phenomenal. If your insurance supports it, I highly recommend it.

51 points by chermanowicz 10y ago

Just chiming in here to help bring attention to the Express Scripts near-monopoly. Their market position and it's implications are surprisingly under-reported. Surprised the HN crowd doesn't get more riled up about this, given the implications for science, opiate abuse, and other opportunities missed for improving the health system.

nerdponx 10y ago
Yep, I never even heard of this company before. This is why I read HN.
- cylinder 10y ago
  I've known about it for a long time, and several times I've tried to read about them and figure out what exactly they do. "pharmaceutical benefits management." Okay, not sure what that actually means. I figure it's just another business / industry that exists solely because of the disastrous healthcare system in America, and would not otherwise be needed if the government managed pharmaceutical access so everyone has access to them.
  - refurb 10y ago
    Express Scripts does a few things. They are a pharmacy benefits manager (PBM). PBMs sell pharmacy plans to other insurance companies and employers. They basically say "Pay us $X and we'll handle all of the pharmacy insurance work for you". They are also a specialty pharmacy and a mail-order pharmacy. I'm sure there are a few other services they offer as well.
ck2 10y ago
Isn't the lack of ability to negotiate better prices under obamacare a much much bigger abuse of health care? The lack of ability to (legally) import from Canada too? And the fact all prices are becoming geared only for people with insurance to milk the system. I don't have insurance and my script went from $4 to $80 when Target cancelled support for people without insurance. Walmart is the last place now and how long will that last when they figure out there is no competition.
- lbhnact 10y ago
  I agree the non-negotiation was a major compromise. However it was, as I am told, basically required to get the ACA passed at all. The drug companies were represented by Billy Tauzin [1] who, as I am told by insiders that worked directly with him, was able to get the Pharmacos to not fight the ACA. Their support was not just critical, but a necessary factor in getting anything done. It was a trade-off, whether or not is was worth it is hard to know. As for your own care, I am sorry to hear about the lack of insurance. Some states (for often historical market reasons) make it hard for providers to sell or even give medications to their patients, which is also part of this problem. If you look around, there are occasionally 'Direct Primary Care' providers or community clinics that stock generics for their own patients and will provide them at no or low-cost. Many organizations and states have processes for the uninsured to obtain medications at low cost as well. If you find a clinic with PCPs who are mission-driven, and they are out there, they perhaps can help you enroll. [1] https://en.wikipedia.org/wiki/Billy_Tauzin https://en.wikipedia.org/wiki/Billy_Tauzin
  - hga 10y ago
    It was a trade-off, whether or not is was worth it is hard to know. It depends on whether you care about there being any new drugs developed in the future or not. ck2 is having trouble paying his current drug costs and would seem to be in one camp. I can pay mine---granted, they've all gone generic---but with a barely, maybe, kinda treatable genetic in my case but generally common condition for which nobody has come up with a cure including an effective drug, I'm in another camp (heck, if new drug discovery had been shut down before the mid-90s or so, I might well be dead, or suffering enough you wouldn't be blessed with my contributions to HN). And as more and more people die due to antibiotic resistance infections I suspect more people will shift into mine. Ditto importing from Canada, with their small market the easiest thing for drug companies to do is simply cease exporting brand name drugs to them so they don't suffer from re-importation and still have something of a new drug development budget.
hga 10y ago
Errr, I wouldn't say they're that close to having a "near-monopoly". Or at least, back in 2011 I chose a Medicare Part D plan that used them, and they were so horrible I've made a point to never use a plan that uses them again, and that hasn't been difficult. For example, they didn't succeed in buying Caremark, bought by CVS, and that's whom I'm using this year, although I was not pleased when they bought Medco recently.
- lbhnact 10y ago
  Apologies, it was an early morning... I meant to point out the Express Scripts-Surescripts connection (and CVS, other pharmacy stakeholders...), which is part of why I think they may have dropped PillPack. PillPack, and some of the other startups and smaller actors in the space, are potetial threats to the established players, like Express Scripts, that essentially collude through Surescripts to protect their access to the patient-provider origination channel. It's the Surescripts network that has the near-monopoly on prescription EDI, and it acts to protect it's members interests. The tech is ancient and entrenched in a way that I imagine would greatly upset the HN crowd if they looked at it more closely. Regulatory actors have not been paying enough attention here IMHO, and the nature of the market has led to an opaque situation that's prevented opportunities to advance research on important questions for social issues and patient care. [1] http://surescripts.com/support/faqs/general/detail/who-owns-surescripts http://surescripts.com/support/faqs/general/detail/who-owns-...
  - Gratsby 10y ago
    The amount of overprotective entrenched businesses in the medical industry is insane. But that's also one of the reasons the industry is attractive to new ventures and businesses -- it's just plain lucrative. Opportunity abounds for people who have the wherewithall and resources to fight the long battle it takes to earn a stable spot in the crowd.
  - maxerickson 10y ago
    Is there even a regulator that would have jurisdiction to do something meaningful? Or is it more of a legislative issue?

wsh91 10y ago

If you like what PillPack is doing and you take meds, consider switching to them. :) I've had nothing but great service and, as someone on about eight pills a day, it's made part of my life much easier.

Cypher 10y ago

I can't see the content & the link asks me to turn off my anti virus.

nissehulth 10y ago
They won't let me in even with a fresh Chrome without any plugins at all. They still tell me to disable adblock. Their adblock-checking seems very broken.
- quotha 10y ago
  me too, forbes is against privacy badger

ThePhysicist 10y ago

It seems that Express Scripts is simply reluctant to continue their business relationship with PillPack since they got too big and now pose a serious threat to their own business model (which probably relies on mail orders as well). It's of course understandable that they don't want to let a startup take away a profitable market segment from them, but it seems that they do this by making use of their market-controlling position, which is probably illegal (IMHO). Reading the article it's really hard to say what is really going on though as the journalist makes very little effort to uncover the real motivations behind the actions of the two companies.

refurb 10y ago
From what I know about Express Scripts, it's probably more about money than market share. ESI has over 1/3rd of the market and is a huge player. They are notorious for driving down costs in a very aggressive way. I would imagine they wanted to cut way back on how much they paid PillPack and PillPack said "no".

koolba 10y ago

From the article (emphasis mine): > “We have historically been contracted with Express Scripts as a retail pharmacy, which is what we’re licensed as in the state of New Hampshire”–where the physical pharmacy is located–”and they want us to contract as a mail-order pharmacy,” he explains. Though the retail-vs.-mail order question isn’t a legal one, traditionally pharmacies that dispense 30-day prescriptions with typical copays are considered retail, and those with 90-day prescriptions and discounted copays are mail-order. Although PillPack does mail its medications to patients (that’s a major selling point), everything else about the business model hews closer to the definition of a retail pharmacy. I would think mailing the meds to the customer is the defining characteristic of a mail order pharmacy.

hga 10y ago
That's something only the consumer cares about. As noted, the orgs above the pharmacy divide them into 30 and 90 day groups, with different policies and prices for each. Also, some retail pharmacies will do the 90 day benefits thing as well as the normal 30 days, I get the impression this is better for some benefits managers than setting up their own mail order pharmacy or contracting with someone like Express Scripts. If I remember correctly, the Humana only Wal-Mart plan does this, as well as others (I learn about this sort of thing every year when I examine Medicare Part D plans and chose one for the next year).
URSpider94 10y ago
For almost any medical plan, "mail order pharmacy" specifically refers to a company that provides a 90-day supply of a prescription for a chronic condition at a special reduced co-pay. Most health plans let you go to the pharmacy of your choice for regular 30-day scripts, but require you to use a single provider (typically either Express Scripts or CVS) to get the 90-day discount. Insurance companies love these services for the same reason we love Amazon -- high volume drives price efficiency, as does eliminating the need for a retail storefront with lights and chairs and Muzak and the like. The retail pharmacy business is a race to the bottom these days. Most small players have been pushed out by declining reimbursement rates, and the big guys barely disguise how little they care about customer service. It's clear that the benefits companies don't want to see another name brand come onto the scene and demand to take some of their profits,especially one with the possibility to gain a loyal national customer base by providing an innovative service.

transfire 10y ago

Boo-hoo, America. Your healthcare system exists to make people rich, not benefit peons like yourself.

dang 10y ago
You can't post flamebait like this here. We ban users that do this, so please don't do it again.

joeskyyy 10y ago

Pillpack user here, and (unfortunately) an express scripts user. I take 18 pills a day to manage some kidney issues I have, and Express Scripts doesn't have a good track record with getting your meds to you on time. If I don't have some of my medications, I could die. Not to mention, it's going to be a big pain in the ass to count out all those pills, AND take up a ridiculous amount of space with all the pill bottles, and pill trays. Incredibly pissed off about all this... Edit: forgot to mention my amazing feelings towards Pillpack. TJ (the CEO) has contacted me directly multiple times to make sure everything has been great, and every interaction I've had with them is phenomenal. If your insurance supports it, I highly recommend it.