Pharmacist Michael Rea got his startup idea from one particular customer whose mother was paying so much for her prescriptions that she was considering selling her house or stopping some of her medications. Her fixed income just didn’t support paying for both.
It was an aha moment for Rea – at the time a pharmacy manager at a Kansas City Walgreens. He did some pricing research and applied what he knew as a pharmacist to put together a brief report for the woman with some ideas on how her mother could save money on her prescriptions.
A few weeks later, the woman returned to the pharmacy elated that, with some of Rea’s suggestions, she’d calculated that her mother could save about $3,000 a year.
Realizing many others who pay high out-of-pocket costs for prescription drugs could benefit from that service, he decided to turn it into a software as a solution business, fittingly named Rx Savings Solutions.
“We built a complex algorithm taking into account a user’s precise location, what medications they’re on, possible alternatives and proprietary pricing information among other things,” Rea said. “This allows Rx Savings Solutions to deliver relevant, personalized savings information on a massive level.”
That could be something as simple as price shopping. “It might be that across the street a medication is 10 percent of the price you’re paying,” he explained. “Or it could be something more complex that involves an alternate therapeutic option, pricing and location components all at once.”
To guide those more complicated recommendations, Rea said his team sources data from research tools like Lexicomp and Clinical Pharmacology and leverages their clinical knowledge and retail pharmacy experience.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
When Rea and co. launched the Rx Savings Solutions website back in 2009, it was with as a direct-to-consumer model. But that proved to be a complicated sell. Luckily, a large insurance carrier approached Rea asking him to perform the service at a group level.
In 2011, the company went through an eight-month actuarial study with the insurer, acquiring a handful of clients along the way. Now Rx Savings Solutions works with employers to provide the service to people covered under the employer’s health plan.
The company ran a case study with a local Kansas City company last year where Rea said it achieved high sign-up rates. It’s planning to start another case study next month.
In August, the Rx Savings Solutions took in $1.5 million from investors. “We have some larger things in the pipeline,” Rea said. “Eventually we’ll need to go get money again.”
[Image credit: FreeDigitalPhotos user amenic181]
Editors note: A reader inquired as to why the site asks for a social security number prominently on the homepage. Here’s Rea’s response:
