Yahoo Finance Express Scripts launches new digital formulary aimed at lowering health costs, increasing access
Express Scripts (CI) announced a new electronic heath formulary this week, potentially transforming the way digital health solutions will be paid for in the near future.
Back in May, the pharmacy benefits company — which is owned by Cigna — first announced its intention to create the digital list of health care recommendations and accompanying treatments, which helps make costs more transparent, and treatment more accessible.
Recently, Express Scripts revealed its first cohort of 15 different disease states being addressed, which include diabetes, heart conditions and behavioral health solutions. Omada and Livongo (LVGO) are two of a handful of leading health companies in the initial wave.
“There’s nothing else like this in the marketplace today,” Mark Bini, vice president of Innovation and Member Experience at Express Scripts, told Yahoo Finance.
“That’s why we were so excited yesterday to announce eat first cohort and this will expand over time,” he added.
Often, digital health companies had to rely on direct-to-consumer and employer strategies as ways to grow their operations and their revenue, and gain traction for their products. Even health insurance plans have created pilot relationships or contracted with some companies.
But the health system at-large has largely been involved in an investor or partner role. If successful, Express Scripts’ move — which its competitors are also working on — has the potential to move digital health into the mainstream.
“A lot of digital health companies found themselves going directly to payers, employers, health plans, etc. to try to gain traction for their particular solution,” Bini said.
“And the pain point we’re solving her is that even that model is flawed because employers have a very difficult time managing multiple vendor relationships, and typically don’t have the expertise...within their HR benefits department to determine whether or not the solutions work,” he added.
But one benefit of working with employers has been the ability to offer fixed cost solutions, such as $20 per person, or a wholesale price for the employer to give its employees access.
A formulary may change the game. But they are often faulted for the high cost of drugs — and the power that pharmacy benefits managers wield in that equation.
Bini told Yahoo Finance that the formulary is meant to create a competitive environment for digital health that is aimed to lower costs.
“Putting these solutions into a formulary is exactly what our payers need, because what it allows for us to do is to create a level playing field for digital health companies to compete for access to the payers that we serve, and the patients that they cover,” Bini said.
“So, in terms of the pricing, it creates a competitive landscape that most of these payers cannot negotiate effectively on their own,” the executive added.
Express Scripts said it created a panel of experts to vet the digital health companies, which includes physicians, specialists, pharmacists that specialize in the disease states, and health services researchers.
“It’s going to make it easier for payers to cover digital solutions within their pharmacy benefit,” Bini said.
Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem
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