Oscar Health is offering a program to limit prescription drugs prices, following the lead of other health care players responding to the public’s demand for lower costs.
The new drug formulary will cost patients $3 for a month’s supply of commonly used medicines, and includes insulin for diabetic patients, the company announced Wednesday.
However, it is not available in Oscar’s largest markets, which include New York and New Jersey, and is not available for small group plans — a key growth sector. For now, it is only available for 50% of the company’s 420,000 members.
The company’s move is similar to something Walmart (WMT) did back in 2006, when it launched its $4 per month list for generics. The retail giant’s offering is also restricted to certain U.S. stores and markets.
“We looked at the most common therapeutic areas for our members – and, with clinician input, we picked drugs that had the best cost and clinical effectiveness,” said Vinod Mitta, VP of pharmaceuticals at Oscar.
“We came up with a list of about a hundred drugs that represent 90% of the use cases that somebody might need a prescription for,” Mitta added.
Oscar is bullish on its new program, and has already seen increased utilization since launching at the start of the year. In a statement, the company said the number of people tapping its insulin products has doubled compared to a year ago, and the demand makes the case for adding more brands to the list next year.
There are several types of insulin on the market — all at different (and relatively expensive) price points. In the recent past, pharmaceuticals, insurers and pharmacy benefits managers have been capping out-of-pocket costs for individuals who need insulin. High prices for the drug has resulted in significant health risks, as patients try to ration doses.
States around the country have been trying to tackle the problem with legislative caps, such as Connecticut, which has been pursuing a $50 cap.
Meanwhile, some drug giants like Novo Nordisk (NVO), Eli Lilly (LLY) and Sanofi (SNY) offer bundle discounts for insulin, which vary in pricing. Last spring, Cigna (CI) and Express Scripts (ESI) announced a $25 per month cap on insulin, following a move by CVS (CVS) which recently announced a zero out-of-pocket program for diabetes patients.