Castlight Introduces a Drug Price Comparison Tool on the Heels of National Changes in Drug Spending

Castlight Health today launched Castlight Pharmacy, a prescription drug price comparison tool for employees. The release came just after the news that in 2012, United States’ spending on traditional prescription drugs fell for the first time on record.

In large part this was due to an increase in the purchasing of generic medications, a fact that bodes well for Castlight Pharmacy, which tries to get users to make cost-conscious decisions about the drugs they buy.

Castlight is a health care price transparency company whose customers are employers. Though employer-sponsored health coverage has historically been the reason employees haven’t been trained to think about health care costs, that’s been changing. In order to hold down their spending, many companies have started to offer consumer-driven health plans. With this type of plan, employees shoulder more of their own health care costs, meaning that they have an incentive to look at the price tag before a purchase.

Unfortunately, in the U.S. health care market, it isn’t easy for consumers to know what their care will actually cost them. A clear look would reveal that prices for the same procedure can vary, even from in-network provider to in-network provider.

So companies offer their employees Castlight tools in order to help them obtain better information about price. Cummins, which employs 17,000 people in the U.S. and offers consumer-driven health plans, is a Castlight customer. And Safeway, with 200,000 employees, was the first to sign up with Castlight in 2010.

The pharmacy feature is a new addition to the health care management suite, which helps users track their spending and identify opportunities to save. Castlight Pharmacy provides users with a pharmacy directory and cost information on available prescription medications. The tool takes individual pharmacy benefits packages into account, so employees can look at the amount they’d have to pay out-of-pocket for a particular drug. They are also able to compare and contrast brand name and generic drugs.

Castlight isn’t the first to offer a drug comparison application. GoodRx provides a price lookup tool to employees, too. But regardless of company affiliation, GoodRx is also available to anyone who wants to use it for free.

Many are hopeful that spending on prescription medications can defy the trend of health care spending in general and continue to go down. “Effective management solutions and increased drug competition are necessary to the country’s effort to rein in specialty drug costs,” Dr. Glen Stettin, Express Scripts senior vice president of Clinical, Research & New Solutions, said in statement.

Express Scripts, a pharmacy benefit management organization, reported that after years of slowed spending on traditional prescription drugs, spending finally fell 1.5 percent. It was the first time it dropped since the company started keeping track more than 20 years ago.

But others worry that the specialty drugs Stettin refers to are exactly what’s going to drive up overall spending on medications. Such new drugs are used to treat cancer, cystic fibrosis and other conditions and can cost hundreds of thousands of dollars, Forbes reported.

Even if the golden years of drug spending do come to a close, at least in the short-term employers should be heartened by what the Express Scripts findings suggest: price competition in the health care market can help to lower costs. This has been the theory of experts from Castlight and others for years, and the generic versus name brand drug competition is a small example of how it can work.