The GLP-1 boom is creating opportunities for pharmacies, but it also comes with payment implications that can be easy to overlook.
As pharmacies dispense more GLP-1 medications and new models emerge around compounding, telehealth, and direct-to-patient fulfillment, the way those businesses accept and process payments can become more complex. And these challenges aren’t limited to pharmacy owners. Pharmacy software providers also need to consider how these changes could affect the payment experiences their platforms support.
Stephanie O’Connor, director of operations and merchant experience at Wind River Payments, recently shared with RX Insider what pharmacies and pharmacy software providers need to understand about the changing GLP-1 payment landscape.
1. How has the growth of GLP-1 prescriptions changed the payment processing risk profile of pharmacies?
The overnight sensationalism of GLP-1s and some of their not-so-legitimate peptide cousins has caused the payment industry to tighten down on risk profiles related to these drugs. GLP-1s are a highly regulated prescription, and as a result, typically fall into a high-risk category for most payment processors. Due to how they are prescribed, often in a recurring or subscription plan, their payment activity alone also places them with a higher propensity for chargebacks, declined payments, and fraud.
The combination of a highly regulated product and increased return risk guarantees that payment processors will view these types of accounts as high-risk. However, high-risk accounts are not treated equally amongst payment processors. Examples of the range of different responses include adding a high-risk fee broadly to all pharmaceutical accounts, excluding the pharmacy industry entirely from the processor’s portfolio (which can mean immediate closure of an existing account), delaying settlement and funding timeframes, or mandating fraud management products with heavy fees.
2. What payment-related challenges are pharmacies encountering that they didn’t have before the GLP-1 boom?
Due to the nature of the GLP-1 drug and the longevity of the prescription, pharmacies will see an increased number of recurring payment plans when fulfilling those medications. The reimbursement of the prescription and if it’s covered by Medicare also complicates the total amount due. As legislation has changed around approved coverage for the drug, pharmacies are seeing increased refund requests or longer claim approvals.
3. How do compounded GLP-1s, telehealth providers, and direct-to-consumer programs affect payment processing differently than traditional pharmacy prescriptions?
Along with GLP-1s, came an increase in telehealth services and prescription writing. Whenever medical assessment is completed virtually, the risk for fraud increases and as a result, regulatory scrutiny increases – stretching beyond payments. Telehealth services not only rely on non-face-to-face assessment of the patient, but they also often introduce card not-present payments for services and prescriptions. Highly regulated drugs, patient services completed over the phone, and ultimately a payment without ever seeing a patient in person is a combination for increased chargebacks and fraud, which consequently requires oversight from payment processors and the card brands.
4. What strategic changes should pharmacy management software providers be making today to ensure their platforms are ready for the operational and payment challenges these therapies are creating?
GLP-1s are exposing opportunities in pharmacy software that were less necessary when most prescriptions followed a simple validate prescription, collect copay, dispense med model. With coverage changing, fulfillment channels expanding, high-cost inventory, and new GLP-1/peptide formulations entering the market almost weekly, pharmacy platforms need to evolve beyond traditional prescription dispensing to support a wider range of payment, billing, and fulfillment models driven by the growth of GLP-1 therapies.
They also need to help pharmacies and patients navigate how a prescription will be paid for, and which financial and fulfillment options offer the best path to access. Examples of this include supporting prepayments for expensive medications that may not be covered by insurance, manufacturer savings programs, and patient financing plans (BNPL).
Often, patient responsibility changes based on the selected channel, which forces pharmacy systems to support multi-channel prescriptions (direct, telehealth, etc.) and multi-source reimbursement (co-pay, Medicare reimbursement, partial payment).
And lastly, pharmacy software should include telehealth fulfillment services as a core platform capability.
5. What actions should pharmacy owners take if GLP-1 is becoming a meaningful part of their business?
If GLP-1 volume is a portion of the business at all, pharmacies should be communicating with their payment processor to ensure the correct documentation and processes are in place to avoid disruption in payment acceptance. No one wants surprises with payment acceptance and the flow of funds. Have an honest conversation to make sure your processor will support your business. Highly regulated and high risk are not always the same. Find a processor that understands the difference.
Secondly, wherever the money goes, fraudsters follow and when telehealth is involved, it is a fraudster’s playground. Pharmacies should use caution when fulfilling all card-not-present prescriptions and review their fraud settings to ensure they have the necessary safeguards in place.
6. Looking ahead, how do you see GLP-1 adoption influencing the pharmacy business model and its payment ecosystem over the next three to five years?
Some of the GLP-1 influences are easy to spot:
- Payments will increasingly become part of the access workflow: pharmacies will need to provide their patients not only with coverage options, but potential savings programs, manufacturer discounts, and subscription pricing.
- Payment architecture will need to support several channels: in-store, online, delivery, and recurring-care. It will be expected that the payment experience is the same across all these channels.
What is most interesting about the GLP-1 movement is how it could change the overall pharmacy business model. Pharmacies have the opportunity to extend beyond the traditional transaction-oriented dispensing model and play a larger role in the ongoing patient experience while developing additional services and sources of revenue.
For pharmacy software providers, payments can no longer be viewed solely as a transaction at the counter. Payment experiences will increasingly need to support patients across multiple interactions and different ways of paying. Pharmacies will require software that accepts payments, reimbursements, and provides visibility to the patient throughout the entire GLP-1 patient lifecycle, with less reliance on external integrations that provide a disparate experience. GLP-1s could be the catalyst to an entirely different pharmacy model in the future.
