Q&A: Growing e-Rx Harry Totonis, Surescripts president and CEO

Surescripts, the electronic prescribing company founded in 2001 by the National Association of Chain Drug Stores and the National Community Pharmacists Association, will hit the ground running in 2010. Buoyed by the accelerating growth of e-prescribing and health information technology — and by its own increasing ability to exploit economies of scale — the company begins the year with a significant price reduction and plans to expand applications for pharmacies and their patients.

Drug Store News spoke with Surescripts president and CEO Harry Totonis in mid-December for a preview of coming activities. 

Drug Store News: First, can you describe progress to date on the rollout of e-prescribing to the nation’s pharmacies and physicians?

Totonis: We’ve had tremendous growth and now have over 150,000 physicians on the network who are actively using e-prescribing, up from 74,000 a year ago. We’ll end up with closer to 160,000 end of year.

There are 52,000 pharmacies now receiving e-prescriptions, up from 46,000. One hundred percent of the pharmacies in Rhode Island are connected. There’s still a long way to go, since the [national] total represents about 15% of all prescriptions done electronically, but it’s still tremendous growth since last year.

DrSN: What’s coming up for 2010? 

Totonis: We are announcing lower prices for e-prescribing, effective Jan. 1, 2010. Although prices of electronic prescribing have never increased in the entire history of Surescripts, effective Jan. 1, the pricing for e-prescriptions for routing, as well as for the benefit information, is getting lower. I think it’s huge news.

DrSN: What led to the change? 

Totonis: Part of Surescripts’ goal through our growth, and through our merger last year with RxHub, was a promise that we would drive the cost of e-prescriptions down. This price reduction next year is the first delivery on that commitment.

This has been very well received in the market, by both chain and independent pharmacies. It’s something that everyone has been asking: When is the price of an e-prescription going to go down?

DrSN: How has Surescripts been able to bring those costs down?

Totonis: Through scale and efficiency efforts, and through the merger of legacy systems at Surescripts and RxHub last year. We’ve spent a lot of time improving out efficiencies.

DrSN: Is this a one-time price reduction?

Totonis: We have a commitment that this is not the only price reduction we’re going to do. We’re going to continue to drive the cost of e-prescribing down as efficiency and scale and our economics improve, and we’re going to pass those economics to the industry.

DrSN: How much do you predict prices will go down for pharmacy providers? 

Totonis: The price reductions will vary. The reason is that we connect pharmacies and prescribers, but between us and them there are software vendors, and some of those vendors and the other aggregators set their own prices, and we can’t dictate those prices. But we are reducing our costs by 10 to 20%. Depending on whether you’re a chain or an independent, and the types of service, what you pay will vary. But we’re looking at a 10% to 20% reduction in price.

DrSN: Are there other initiatives coming in 2010?

Totonis: Yes. We’re looking at how we help drive greater value and lower costs for pharmacy, and improve all of health care in America. And part of that is, how do we enable pharmacy to drive greater value to patients?

We have a number of things we’re doing across that front. One is that we’re going to be offering better connectivity between pharmacies and the providers of patients’ personal health records, like Google and Microsoft. We’ll be providing a service where, if a patient is properly authenticated and wants access to his or her medication records … rather than having to go directly to each pharmacy, we’ll be working with the pharmacies to provide that access.

DrSN: How will it work? What contractual relationships will be required?

Totonis: It will require contractual arrangements with companies like Google Health, and with the pharmacies themselves. But rather than each pharmacy having to create their own connectivity with Google and Microsoft, we’re going to create that connectivity, and we’ll be able to provide those health records to Google — obviously at the request of the patient.

What that does is make the availability of medication information much more readily available to all patients. It makes it much more efficient and low-cost, because instead of every drug store having to create its own connectivity with Google and Microsoft, there is one link. As long as the pharmacies say ‘connect us,’ and the patient requesting the information is properly validated, we’ll make that connection happen. We’ll make that access much easier and much more available, at a lower cost.

DrSN: When do you launch that effort?

Totonis: It’s going to be announced in the first quarter of 2010. We have not talked with anyone yet about this.

DrSN: What other developments will make news this year?

Totonis: We’ve also connected to the MinuteClinics. So if a patient walks into a MinuteClinic and wants their information sent to their primary care physician, we can … move that information from the health clinic to the physician.