AdvancePCS, Merck-Medco and Express Scripts' Internet-based patient drug benefit exchange RxHub is designed to increase PBM control over physician prescribing choices by bringing together information from different providers at one Web address.

"Our system will enable physicians to use electronic means to access patient drug benefit information from all participating providers, and to transmit prescriptions electronically to the patient's pharmacy of choice," AdvancePCS CEO David Halbert said during a Feb. 22 conference call announcing RxHub.

"The hub would operate as an independent switch, like a telephone exchange," he explained. A physician would enter a patient ID number, which would "identify who the appropriate covering agency might be, whether it would be a PBM, health plan or others, and then link them together."

Physicians would have access to patient drug history, prescribing guidelines and therapeutic alternatives, much like pharmacists do today, the companies said. The additional information would help physicians consult with patients about their choice of therapy.

"Pharmacies will receive a clean electronic prescription that they already know is covered by the patient's benefit plan," Halbert explained. "This will eliminate the need for data entry at the pharmacy."

Although direct access to the program at RxHub.net will be free of charge to physicians, the companies envision a model in which PBMs, health plans and other subscribers pay fees per transaction.

"The physicians would not be subscribers to this service," Merck-Medco President Richard Clark said. Pharmacies, however, might be charged for each script they receive through the RxHub network. Handheld Rx device marketers would pay for hub access.

"Since this is a not-for-profit entity today, the transaction fees for this type of capability is probably somewhere between 25[cents] and $1," Clark said, adding "our goal is to have it less than that."

RxHub would accelerate the uptake of online prescribing through universalized access to data, Express Scripts CEO Barrett Toan said. The three founders "have 50% of all prescriptions filled in the U.S. and well over 50% of all insured membership."

RxHub would overcome two of the barriers that limit the growth of online prescribing: creating a single standard and technology exchange, and creating an economic model that sustains the prescribing process in the doctor's office, Toan said. "We believe the RxHub will create such an economic model."

The rationale behind the RxHub transaction-fee model "is to spread the cost of this." Toan said the founders believe "the various constituencies that benefit would pay some portion of the cost as transaction fees." The companies have each committed to invest up to $20 mil. in RxHub's development.

Transaction fees could decline once the founding companies recover their initial investments, Halbert noted. "We anticipate that we would like to get our capital back at some point of time," he said. "After that we would anticipate the fees that are charged for the various constituencies would go down."

Various point-of-care electronic prescribing vendors such as iScribe, ePocrates, PocketScript and Allscripts will maintain a relationship with the physician by providing prescribing software, Halbert added, "and very well might charge the physician for some access to the hub."

"We are going to leave the ultimate fee decisions up to the management of RxHub," Halbert said.

RxHub is expected to be operational by early 2002. "The key part of this is to build the technology infrastructure, and we will be in discussions with a number of tech companies and consultants to determine the best combination of partnerships, outsourcing and in-house development," Clark noted.

RxHub will seek to sign up other health plans, PBMs, pharmacies and technology companies. The companies are contacting their health plan and other PBM clients as initial targets for membership.

RxHub will also "begin developing universal electronic prescribing standards" with organizations such as the National Council for Prescription Drug Programs, Clark said.

The exchange will be set up with independent management. A search is underway for senior executives; the founding PBMs will provide temporary staff during the start-up phase.

PBM-Sponsored RxHub Being Built To Centralize Patient Drug Benefit Data

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