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Will BidRx start a drug price war?

Oshkosh, Wis. - BidRx, a new online company that helps consumers shop for more affordable prescription medications, is attempting to create a new healthcare paradigm.

The Oshkosh-based business has gone live with its new web site, where consumers can self-register and gain free access to compare costs and obtain other information about prescription medications. And with Americans paying more for their medications out of pocket, the site's developers believe consumers - and their doctors, employers, health plans, and neighborhood pharmacies - will increasingly embrace the concept over time.

In Tom Kellenberger's view, the timing could not be more perfect. With the rapid pace of drug discovery, there is a constantly changing and confusing landscape of brand names, generics, and over-the-counter alternatives. And perhaps no area of consumerism has more decisions made without regard to cost than prescription medication.

"There are significant savings to be made in the procurement of prescription drugs," said Kellenberger, vice president of BidRx, LLC. "We think open competition is the best way to bring down costs."

If BidRx gains some market traction, competition could be wide open. Just as online travel sites have transformed how consumers find less expensive airfares and hotels, is seeking to create an open and more competitive market for pharmaceuticals.
The company is touting its service as a way for consumers to find the best medications for their needs, with savings of up to 85 percent available to customers, including senior citizens on fixed incomes. One of the more important features of the site is a function that enables visitors to enter the name of a prescription drug and learn about similar medications they could be taking, often at a much lower price, and then find the right pharmacy to fill the prescription.

Oshkosh resident Nancy Leatherwood, who lopped nearly $20 off the price of a prescription for her mother, was amazed at the price disparity on the same drug between two different independent pharmacies. At her regular pharmacy, she paid $26.99, but after checking the same presciption on BidRx, she found that the same medication was available at another local pharmacy for $8.64.

"I was happy because my mom is on a fixed income," Leatherwood explained. "I thought there wasn't much difference in prices at pharmacies, maybe a couple of bucks."

Bidding war

The concept for BidRx was developed by CEO Ralph Kalies, who has a long history in the healthcare field, and owns a bachelor's degree in pharmacy from the University of Wisconsin-Madison. Under his model, web site visitors can receive discounts directly from pharmaceutical companies, and then put their prescriptions out for bid in an effort to compare prices and services from competing pharmacies. The site also provides opportunities for pharmaceutical companies to market their products directly to online customers.

Several mail-order pharmacies have entered into contracts with BidRx to bid for business. BidRx also has contracts with several thousand pharmacies, but most consumers will not find the service available at their neighborhood pharmacy at this time.

One city where that is not the case is the Fox River Valley town of Omro, Wis., where Omro Pharmacy is one of the first independent drug stores to become a site partner. Pharmacist and owner Ken Bressers called BidRx the first "real way" to find reasonable prescription pricing online. Although the pharmacy is located in a small town (population 3,300), Bressers said it can reach millions of consumers and "offer them medications at honest prices," which helps his pharmacy remain in business.

Building a larger base of participating pharmacies and physicians will take some time, but the more consumers mention BidRx to those in the healthcare industry, the faster it will occur, Kellenberger said.

There is one potential snag to the service taking off nationally, Bressers said. Some state Boards of Pharmacy put up barriers for out-of-state pharmacies to mail prescriptions into their states. Vermont, for example, requires out-of-state pharmacies to pay for a special license if they want to ship drugs across state lines. "Once we get these state board requirements satisfied, it [BidRx] could have so much more impact," Bressers said.

BidRx is in the beginning stages of developing partnerships with health plans, insurance companies, and employers. Kellenberger believes more doctors, for example, will use the site because it will be more efficient to order medications for their patients upfront following a simple search.

John LaPrest, an independently employed resident of Pickett, Wis. who pays for his own insurance, wishes his doctor had done more due diligence. LaPrest was using an acid reflux medication that set him back more than $100 a month, but discovered through an over-the-counter drug for only $14 a month. When he asked his physician about it, the doctor acknowledged the low-cost drug had the same basic formula.

Why didn't he tell LaPrest about it before? "He said, `Frankly, doctors don't have the time,'" LaPrest told PR Newswire. "There's no way they can keep up with new drugs, new generic choices, or those that move to over-the-counter. If they know that a particular brand works, that's what they prescribe, but they're not taking cost into account."

Follow the money

BidRx now employs 50 people, including a staff of programmers based outside of Wisconsin. Under its current business model, the company derives revenue from several sources. First, pharmacies pay a marketing fee to present themselves as prescription drug fulfillment options, and they only pay if they attract new customers. Participating employers pay an administrative fee to BidRx, and the company also sells advertising on its site.

Learning to use the site is relatively simple. Consumers access the site and click on the "How It Works" link for a seven-minute tutorial. According to Kellenberger, the site is confidential and secure, and visitors are asked to enter only a drug name, quantity, and directions before obtaining comparable information on medications. This includes prices, electronic coupons for discounts from pharmaceutical companies, and competitive bids on prescriptions and services from both neighborhood pharmacies and mail-order pharmacies throughout the United States.

Kellenberger is unaware of other sites that offer the same service, and noted that BidRx does have a patent pending on its technology and business process. "We will certainly defend our patent," he added.

He thinks there are two reasons why nobody has thought of the idea before: it takes time to develop such a technology - comparable concepts like Expedia and Travelocity have only been around for a few years - and companies may not have been interested in an alternative to the employer-based insurance model until drug costs started increasing at double digit annual rates.

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Kathleen M. Omori responded 8 years ago: #1

Thank you very much! It's about time we can afford our medications!
Honolulu, Hawaii 96825

KIM NYMAN responded 8 years ago: #2


Patti D. responded 7 years ago: #3

I kept putting off learning how BidRx works. Finally I took the time & "tested" the system. Although my spouse carries the prescription coverage plan, I became aware of BidRx through my employer. Our insurance plan starts at a $10 per co-pay so one of our "maintenance" drugs, generic, would be $60 for 6-mths. One prescription I can have our doctor write for 6-mths results in only paying $5.19 via BidRx with electronic discounts. That simple change as you can calculate, saves us $55. Another new prescription on BidRx was going to cost $17-$20 so I thought we'd just use the insurance plan for $10 but a few days later when I checked again on BidRx, the drug was out there for $0 (free!) after an electronic discount. My recommendation, take the time to view the tutorial & just DO IT. -- Appleton, WI

Raymond Dahl responded 6 years ago: #4

My name is Raymond Dahl, and I served with John LaPrest in Panama, circa 1967/68, with the 549th Military Police Company,Fort Davis, Canal Zone. If anyone knows him, please forward message. 773-343-1038. THANK YOU.

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