Taking your prescription medication as scheduled by your doctor is a routine experience. However, many U.S. adults fail to do so, which results in billions of dollars of additional costs to the nation’s health care industries, not to mention the hundreds of thousands of additional unnecessary deaths that occur. Gavin Buchanan and Andrew Aertker realized there was a massive opportunity improving adherence rates through their startup PatchRx. PatchRx designs ‘smart pill’ bottle caps that track when a patient takes their medicine, and allows pharmacists to intervene via a web app if the patient forgets or does not. The startup is based in San Antonio, Texas.
PatchRx cofounders Gavin Buchanan (left) and Andrew Aertker (right).
Frederick Daso: It’s clear that non-adherence to taking your medication on time can lead to negative social outcomes and costs to the U.S. healthcare industry. What is the nature of these costs numbering in the hundreds of billions? Are they mostly administrative, legal, or based on something else?
Gavin Buchanan and Andrew Aertker: I would review this article from The Pharmacy Times by Dr. Aungst. It goes over the costs associated with medication non-adherence. It discusses the results of this study from the Annals of Pharmacotherapy. One of the main lines pulled is: “The estimated annual cost of prescription drug-related morbidity and mortality resulting from nonoptimized medication therapy was $528.4 billion in 2016 U.S. dollars” with a low end of $495.3 billion and high end of $672.7 billion.” Which “is related to doctor visits, hospital admissions, the cost of medications themselves, etc,” with an estimated 275,689 deaths per year resulting.
Daso: What are the flaws associated with the current standard metrics, the Medication Possession Ratio (MPR), and the Proportion of Days Covered (PDC) calculations? How do these shortcomings propagate within the medical system to patients taking prescription medication?
Buchanan and Aertker: There are two primary flaws with the current metrics, the first of which revolves around the current measures’ low-resolution nature. Both MPR and PDC use gap days (the time between fill and expected refill for a patient) to measure adherence.
For example, if a patient has a 90-day fill of Lisinopril and comes in to refill 120 days after his last fill, then that patient has 30 gap days. These gap days are used to retroactively determine the patient’s adherence over that time. But how did they take that medication? Did they skip 30 days of doses, double their dose on 30 days, skip their meds predictably every few days, or overdose by six times their prescribed amount on five different days?
There is an infinite number of possibilities for why that patient was nonadherent – but these standards provide zero information. And because of it, the healthcare industry is completely in the dark about how patients take their medications daily for the 6 billion scripts filled each year.
The second flaw with these metrics is that they’re slow. For the most common fill period, 90 days, you’re getting four touchpoints on that patient’s adherence data a year at best and at the worst, only 1 or 2 per year. This slowness forces Medication Therapy Management to be reactive rather than proactive. Suppose providers had granular adherence data in real-time. In that case, they’d be able to be preventative and catch missed doses the same day and correct that behavior before it becomes an adverse health event.
Daso: As you sell your technology directly to pharmacies, who is the decision-maker in your business model? What are their general criteria that need to be satisfied for them to go through with a purchase?
Buchanan and Aertker: If we’re speaking to an independent pharmacy, the decision-maker is usually the lead pharmacist or business owner. Often, they can be the same person. The two general criteria that are most consistent are, first, seeing that patients are engaging with the service and are reacting positively and, second, observing an improvement in adherence (both in our Daily Adherence Score and standard PDC) throughout the 90-day pilot.
Daso: You’ve hinted at the value of not only the immediate technology your startup produces but also the data you’re able to capture. Specifically, what information would you collect, and how would this be useful to pharmaceutical firms and health insurers?
Buchanan and Aertker: We collect adherence data from patients with regards to their demographic information, medications, disease states, insurance plans, etc., and we compare and contrast these various data points on a grand scale to better understand patient medication behavior. We have Individualized Data (I.D.) that we provide back to only the care providers linked to the patient and Aggregated Data (A.D.) to those looking for greater industry insight into adherence.
For pharmaceuticals, the primary value drivers are:
- Ability to better determine drug efficacy
- Ability to understand issues with persistence and adherence more granularly
- Ability to better forecast financials
And there are three components to this area.
During clinical research - It’s estimated that it takes an average of ~$1 bn to get a drug to market. Adherence in a study is crucial to that study’s results; however, traditionally, CROs must rely on self-reported adherence, which is dubious at best. Better adherence data may allow for a better picture of efficacy and be crucial to understanding the best dosing schedule of a drug.
Real-World Evidence: Post-Marketing Surveillance begins upon marketing approval that allows a pharma company to begin selling its new brand medication into PBM’s formulary for sale and distribution into pharmacies and health systems. It is crucial in this period that a new medication displays similar effectiveness as it had in clinical testing. Most pharma companies can’t achieve this because the national adherence is 50%, and they can’t screen non-adherence from their effectiveness rating due to a lack of data. As an example I mentioned in our call: Trikafta is one of the drugs we’re tracking in our study with UTHealth. Vertex developed, approved in 2019 and has been regarded as the new ‘miracle’ drug for Cystic Fibrosis. It’s only being used by a few thousand people nationwide, is $25k a month, and is directly competing with pharma companies like PTI, Galapagos, and Flatley.
Staying Period: Once a company has approved a drug for a condition, they have some of the same value propositions described above. They want to see patients’ retention rates on their medications (i.e., how long they stay on that medication before switching medications or stopping treatments), which helps forecast future demand and financials. Also, it helps determine efficacy and interactions with other meds, the lifetime value of a new patient, and helps the real-world data department identify the most frequent causes for not refilling.
For health insurers, the primary value drivers are lowered costs incurred through a decrease in preventable adverse health events and operations and improved STAR ratings and performance metrics due to higher adherence.
Health plans care about Individualized Data (I.D.) on their patients as well as A.D. One of our pharmacy champions at HEB often says that our technology is inevitable in the sense that as soon as Health Plans figure out a way of not paying for a preventable procedure that occurred due to non-adherence, they will enact it. Most health plans would love not to cover an amputation procedure on a person with diabetes as it’s very high cost and almost always preventable granted proper adherence. A.D. is also important as it helps further understand the risk profile of certain demographics of their patients and better create estimates of costs. We’re in the process of expanding into employer plans at the moment.
Daso: During your customer discovery process, what did you find that your customers most cared about, and why? How did you translate those findings into design constraints that shaped the development of your smart pill bottle cap?
Buchanan and Aertker: From research and collaboration with hundreds of pharmacists, there were three clear necessary functions of our service. The first was seamless integration - Pharmacists are busy enough, so a solution could not add more time to their workflow. The second was universality - Pharmacists didn’t want any disruption to their current supply chain, i.e., they wanted a solution that works for any pill bottle they are currently using. The third was affordability- Pharmacies operated at razor-thin margins. They were only open to discussing a solution once the price was in the low single-digit dollar frame or brought additional revenue into their pharmacy.
We took these findings as our primary design criteria and needed to create a cheap, easily-added device that could fit in any pill bottle, no matter where someone got it filled. We did just that and found that while the solution is simple, we could get a patent approved on the device in just under eight months because no one had made something tailored to the needs of care providers.
Daso: How did you develop your web app and application programming interface (API) to integrate into your customer’s existing software while staying compliant with medical and healthcare regulations?
Buchanan and Aertker: Our web app is currently a standalone service that our partners use separate from their EMR/EHR/Pharmacy Software. We process refills and other messaging separately, as we do not currently have any existing EMR/EHR integrations. Still, we are developing partnerships with companies within the pharmacy and health system space that do.
Daso: Landing those first few pilot users must have been difficult. How did you figure out to first identify, then properly pitch these early adopters?
Buchanan and Aertker: It’s not nearly as challenging as many people expect. We made our customer discovery with care and diligence. When we approached these first pilots, we had clear value propositions that we knew would provide an exciting offering to any pharmacy that wanted to partner with us. When we initially began asking potential clients whether they’d like to do a pilot, we had way more people raise their hand than we could provide for. That allowed us to choose early partners that would work with us and provide key insight/feedback to allow us to continue to finetune the service to fit pharmacy and patient needs.
Daso: Very few would think that medical non-adherence to prescription medication can be a cause of death for so many Americans? In addition to preventing death due to non-adherence, how will PatchRx affect the future of pharmacies and drug development as a whole?
Buchanan and Aertker: There are a few ways we’d like to change the landscape of healthcare. The first is by fundamentally improving the patient experience with taking a prescription and, in the process, shift the culture around taking medications to be more inclusive (half of Americans take a prescription medication every day). The second is to shift the industry-standard to a true adherence format, like ours, that demonstrates how patients interact with medication and then use that information to create the best health care plan for each individual accurately.
One of the biggest issues in healthcare and drug development is when you are looking at a patient’s record or history. You are only getting a slice of the pie. We expect to be on the leading edge of building a continuum of care that truly can provide insight into the patient’s health – from top to bottom.
Lastly, we see a future for PatchRx in five to ten years in which the idea of a single person dying from a missed medication is absurd, much further a quarter-million casualties from non-adherence, and we’re working tirelessly to make that a reality.
