What is a cash price network?

Cash price networks are pricing anyone can access regardless of insurance status. You've probably seen at least one advertised on TV such as GoodRx or SingleCare. For some drugs the total cost using the cash price is actually lower than just the copay of excellent health plans, let alone the full cost borne by the patient, employer and insurer.

For example, a typical employer group or health plan could expect to pay about $155 for the common cholesterol medication Lipitor (atorvastatin), while the patient chips in a $25 copay. Meanwhile, the cash price for Lipitor is about $8.25.

These are approximate numbers since drug prices change frequently and health plans vary, but the fact is the cash price for Lipitor is a better deal for both the member and the health plan or employer group. This is the case for thousands of drugs.

Anyone can access an independent cash price network through a card, app, or other technology to activate savings at the register. But, patients typically have to be in the know about cash pricing to use it, and may not know that pricing across the different cash price networks can vary widely. In addition, in some cases policies and contracts often prevent pharmacists from making recommendations to patients about cash networks.

As an employer, how do you make sure employees get the best price on medications?

Since cash pricing can provide considerable savings for both organizations and members, employers are now partnering with cash networks — or even creating their own — as a benefit to their employees.

Finding a cash network that fits the needs and utilization of your organization is key. If you are a tech company with a young team, you may want to look for a cash network with the best pricing on behavioral health medications, for instance. Other companies may find different trends in their data to prioritize and may match better with a different cash network.

Cash pricing is particularly appealing to self-insured employer groups because in addition to employees saving money, the organization reduces the total number of claims, directly reducing benefit costs.

The simplest way to access cash pricing is to direct employees to use a well-known cash network. This may lower costs some, but companies lose key data if they don't have a relationship with the cash network. Obtaining this data through a partnership will help the organization shape pharmacy benefits in the future.

A branding opportunity

With new technology advancements, as an employer, you can now customize your own cash network or create a white-labeled solution that features your own logo on the card or app for employees to use. Every time an employee saves money at the pharmacy, they will associate that experience with their employer's brand.

Providing a cash price network, easily creates a new employee perk that has no cost for the employer – and offers savings for all parties. This model also works for trade associations, chambers of commerce and nonprofits looking for another way to differentiate and engage their members or donors and promote wellness.

Plus the outcomes are more than monetary. Better prices at the pharmacy means better adherence to taking medications which equates to better quality of life and healthier, happier employees.

Michael Szwajkos is founder and president of Famulus Health, a health care technology company that helps health plans and employers manage their pharmacy benefits and lower their costs. Famulus Health is part of Goodroot, a community of companies reinventing health care one system at a time.