Analytics Startup Looks to Cut Prescription Drug Costs
A big data startup emerging from stealth mode this week is focused on helping company healthcare plans avoid increasingly common price spikes for prescription drugs.
Oration, Foster City, Calif., said Wednesday (Dec. 16) its software tools is designed to help employees manage their prescriptions, find the cheapest version of a drug and place orders at pharmacies using mobile devices.
The startup also announced an $11 million funding round led by Draper Fisher Jurvetson, Andreessen Horowitz and Google Ventures. The investors are betting that the healthcare tool can help companies with more than 10,000 employees save more than $1 million annually on prescription medications. An estimated $370 billion is spent each year in the U.S. for prescription drugs.
The OrationRx platform tracks and identifies prescription drug availability and prices in a given area, enabling employees or their dependents to choose and order the cheapest option from a mobile phone. Oration notes that prices for the same medications can vary from $4 to as much as $60 at two different locations within a five-mile radius.
The startup also boasts a number of early adopters, including human resources management specialist Workday Inc. (NYSE: WDAY) and construction equipment dealer Peterson CAT. The latter is offering the prescription software as an elective employee benefit that Peterson said has helped reduce spending on prescription drugs.
The software works with all major pharmacy benefit managers and pharmacies without requiring contract changes or being tied to open enrollments for employer benefits. The larger goal is to use big data technology to help “lift the curtain on the imbalance in drug pricing, empowering everyone to access more affordable healthcare,” the company said.
“A few miles can mean the difference of dozens of dollars spent on the very same prescription, on the very same insurance plan, for the very same consumer,” Oration CEO Pramod John noted in a statement. “That delta is significantly higher for specialty drugs.”
Another goal was ease of use. Oration said its software analyzes thousands of prescription pricing options based on an employee’s insurance plan. It also takes into account drug safety, efficacy requirements along with cost and location preferences. Those parameters are distilled into recommendations that are offered as one-click choices on a mobile device.
Hence, the startup claims filling a prescription through the OrationRx platform is akin to ordering a movie online.
Also participating in Oration’s Series A funding round completed last year were Chicago Ventures, Data Collective, Work-Bench, Arsenal Venture Partners, TiE Angels and unnamed individual investors.
Data analytics continue to make inroads throughout the pharmaceutical and healthcare industries as well as in life sciences. Also this week, real-time search and analytics specialist Sinequa said the Belgian biopharmaceutical company UCB (EBR: UCB) selected its analytics platform to accelerate research on its clinical trial file share system.