History, Current State, and Future of Discount Cards

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Prescription discount cards have existed since the 1990s but gained massive popularity following GoodRx’s launch in 2011. From PBM programs like Express Scripts’ Inside Rx, online giants like Amazon’s Rx Savings, to retail pharmacies like Walgreen’s Prescription Savings Club, more competition arose to capitalize on the growing trend.

Quickly summarized, cash discount cards are programs that partner with PBMs to provide uninsured consumers or those not utilizing insurance with prescriptions priced lower than Usual and Customary (typically a pharmacy’s maximum drug price). The program and PBMs retain transaction fees while pharmacies keep prescription volume they may have else lost.

Though modern discount card programs usually do not require monthly or yearly fees, the early cards began as annual memberships, like the AARP, EHO, and MagnaCard models1 of the 1990s.
The introduction of the Medicare Prescription Drug Discount2 card in 2003 began an ever increasing wave of public interest and expanding market share for discount cards. Since then, there have been four general trends: market saturation, vertical integration, partnerships, and increasing government participation.

Early providers of discount cards were generally centered around the healthcare sector but modern programs vary in sponsorships, given the low capital required to create a discount card. The market is dominated by GoodRx as seen below3 but third parties not involved in healthcare from information site WebMd4 to coupon site RetailMeNot5 have all entered the fray.

To combat this, more PBMs have embraced vertical integration of discount cards with Optum Perks and Prime Therapeutics’ MedsYourWay being two examples. Other programs like Blink Health try to navigate a middle ground by collaborating with certain retail locations while maintaining their own online pharmacy. In a saturated market, some organizations have embraced partnerships to avoid the initiation and marketing costs of starting up a program. MedImpact and Express Scripts have opted to integrate 3rd parties such as GoodRx into their adjudication process6 while Prime Therapeutics collaborates with Amazon’s discount card for 5 of their Blue Cross offerings7.

On the government side, there’s a noticeable rise in the number of state sponsored discount cards with almost 1/3rd of state governments having programs8 as of 2023. The newest trend is for multiple states to collaborate together: Oregon and Washington partnered to form ArrayRx in January 2022 with Nevada joining in September 2022 and Connecticut9 joining in October 2023. The joint partnership shown in ArrayRx may be the start of a consolidation trend among state governments to combine leverage and provide more access to drugs, networks, and discounts than a single state could on its own.

With the ever-increasing number of discount cards available, the market is beginning to push back against discount cards. Kroger’s rejection of GoodRx in 2022 netted the discount card a projected annual $150M loss10 while more pharmacies are starting to void discount card fills and offer price matching11 to bypass paying transaction fees to processors. Still, there will be a strong market for discount cards as long as there are uninsured or underinsured consumers and the sector continues to see more integration of benefit managers and discount card programs.

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