Cost comparison Web sites that allow consumers to shop for the lowest fees are nothing new--travel sites like Orbitz.com and mortgage sites such as LendingTree.com have been forcing businesses to compete for customers for several years now.

But until recently, no such site existed for the prescription drug industry. The founders of BidRx.com, which went live on August 2, are out to change that by bringing a new paradigm to the health care industry.

As Tom Kellenberger, Pharm.D., the Oshkosh, Wisconsin-based company's vice president of sales and marketing, explained, health care is one marketplace in which consumers have no opportunity to evaluate and compare their options.

"Significant savings can be made in the procurement of prescription drugs," Kellenberger said. "We think that open competition is the best way to bring down prices."

Getting Information

"In the few weeks since we have gone live," said BidRx CEO Ralph Kalies, B.S., R.Ph., "more than 5,000 employers have signed letters of intent to put this service into place by January 31, 2007."

Consumers also can register directly on the site to get free cost comparisons and other information about any prescription medication approved by the U.S. Food and Drug Administration. One of the site's most important features allows visitors to enter the name of a prescription drug and obtain the names of similar medications, which are often cheaper, and then select a pharmacy willing to fill the prescription.

BidRx is the brainchild of CEO Kalies. Under his model, visitors are eligible for discounts from pharmaceutical companies. Consumers put their prescriptions out for bid in an effort to compare prices and services from competing pharmacies. The site also provides pharmaceutical companies the opportunity to market their products and services directly to online customers.

BidRx currently employs approximately 50 people, including a staff of programmers based outside of Wisconsin. Under its current business model, the company derives revenue from several sources.

Pharmacies pay a marketing fee to be listed as potential prescription drug suppliers, and they pay only if they attract new customers. BidRx also receives an administrative fee from participating employers, and the company sells advertising on its site.

Kalies said BidRx has a patent pending on its business process and technology.

Developing Partnerships

BidRx is in the early stages of developing partnerships with health plans, insurance companies, and employers. Kellenberger believes physicians will be attracted to the site because it will be more efficient to order medications for their patients upfront, following a simple search.

"We also know that pharmaceutical manufacturers have the opportunity to become more efficient in their sales and marketing activities through BidRx," said Kellenberger, adding that, for the first time, pharmacies have access to every prescription written in their local marketplace. In fact, becoming a BidRx participating supplier gives pharmacies the opportunity to become a mail-order or specialty pharmacy if they choose, Kellenberger said.

"We're always looking for ways to attract more customers," said Ken Bressers, R.Ph., a pharmacist and owner of Omro Healthmart Pharmacy of Omro, Wisconsin, which recently became a BidRx supplier. "With BidRx, although we're in a small town, we can potentially reach millions of American consumers and offer them prescription medications at honest prices."

Bressers said the only potential obstacle to BidRx really taking off nationally is the fact that most states require out-of-state pharmacies to register and pay a fee for the right to mail prescriptions across state lines. However, he pointed out, states in regions such as New England, which are small and close together, will often routinely pay fees to neighboring states for the right to mail prescriptions to their residents.

Going National

The number of suppliers and prescription drug auctions on BidRx are increasing, Bressers said, noting the site already has suppliers in all 50 states.

Pharmacy benefit managers have traditionally never been able to please pharmacies or their clients all of the time, Bressers noted.

"BidRx could very well represent the next trend in pharmacy benefit management," Bressers said.