GS interview: Wind River Payments' Stephanie O'Connor sheds light on GLP-1 drugs and payments

The rapid growth of GLP-1 drugs has created new opportunities for pharmacies, but adding the medications can also have unexpected payments implications. Depending on the products dispensed and how they are marketed and paid for, pharmacies may face additional underwriting, higher processing costs, reserves, chargeback exposure or even account termination.

Green Sheet asked Stephanie O'Connor, director of operations and merchant experience at Wind River Payments, what pharmacies need to know about GLP-1s before accepting payments for them and how they can avoid disruptions to card acceptance.

Green Sheet: 1. Why can dispensing legitimately prescribed GLP-1 drugs change a pharmacy's risk classification with its payment processor, and what specifically triggers that change?

Stephanie O'Connor: GLP-1s are part of a broader peptide category. This includes FDA-approved medications, compounded products and products still marketed for research use. Processors may apply different requirements to each category. For example, a processor that supports an approved GLP-1 may require additional review for a compounded product or decline research-use drugs entirely. Even a valid prescription can still fall outside a processor's risk limits.

The trigger is usually a change the pharmacy didn't think of as a payment decision, such as adding the product to its website or advertising it. Either can prompt a full review of the account. If the pharmacy also uses recurring billing, that model can affect how the processor evaluates its risk. The pharmacy may not anticipate it because it views GLP-1s the same way as every other prescription covered by its processing agreement.

GS: 2. What can happen if a pharmacy begins selling GLP-1s without first determining whether its existing merchant agreement permits those transactions?

SO: The mildest outcome is higher costs. Processing rates may rise, compliance requirements and monitoring may increase, and underwriting may require a reserve to offset potential losses. The most disruptive outcome is the processor deciding it no longer supports the offering or the business.

We've seen pharmacies have accounts closed after a processor spotted a legitimate GLP-1 fulfillment on a website or in marketing materials and determined the business no longer fit its risk appetite.

Finding a new processor takes time. And until that is possible, the pharmacy may not be able to accept card payments at all. Processor approval is not permanent. A pharmacy can clear underwriting and then trigger another review years later with a single product decision.

GS: 3. How do cash-pay and direct-to-consumer GLP-1 programs change the payments risk profile compared with prescriptions primarily paid through insurance?

SO: The amount charged to the card is one factor. With an insurance-paid prescription, the pharmacy may charge only the patient's portion to the card, while the payer's portion moves through the pharmacy claims process. In a cash-pay program, the full purchase price may be charged to the card. That puts more of the transaction value at stake if the patient later disputes it.

The sales model matters too. Direct-to-consumer programs may take payments online, store card information for future purchases or use recurring billing. Those practices can increase fraud exposure and disputes compared with an in-person payment. When evaluating the account, a processor will look at how much volume moves through card payments and how those payments are accepted.

GS: 4. What additional chargeback risks arise when GLP-1 programs use subscriptions, recurring payments or automatic refills, and how can pharmacies reduce avoidable disputes?

SO: Recurring payments carry more chargeback risk than one-time purchases regardless of the product. A patient may stop taking the medication or be admitted to the hospital without canceling the recurring charge, then dispute the next bill. The dispute may have nothing to do with card fraud, but it still counts against the pharmacy's chargeback record. Each dispute also takes staff time to research and address.

According to Mastercard, the average chargeback costs a business about $128 in internal costs and third-party fees. A higher chargeback rate can lead to closer monitoring and higher processing costs.

Pharmacies can reduce avoidable disputes by clearly explaining the billing schedule before a patient agrees to recurring charges. They should also use a recognizable billing descriptor and give patients a simple way to cancel or update the arrangement. Staff need a clear process for handling those requests before they turn into disputes. The processor can recommend prevention tools and documentation practices based on the pharmacy's setup.

GS: 5. How are regulatory changes surrounding compounded GLP-1s affecting underwriting and transaction monitoring, particularly for pharmacies that dispense or advertise these products?

SO: Changes in the rules governing compounded GLP-1s may cause processors to reassess whether they will support those products. For GLP-1s, programs like The Bridge Program support the legitimacy of the drug and align it more closely with other highly regulated prescribed medications (schedule I and II controlled substances) that carry risk in the industry and oversight and have federal controls.

Depending on the product, merchant category and sales channel, a pharmacy may need to enroll in a card-brand registration program, such as the Visa Integrity Risk Program, before a processor will support them. Pharmacies that dispense or advertise compounded GLP-1s should expect closer review during underwriting and ongoing monitoring throughout the processing relationship.

GS: 6. Before filling or advertising its first GLP-1 prescription, what should a pharmacy ask its payment provider about rates, reserves, underwriting requirements, transaction restrictions and the possibility of account termination?

SO: Pharmacies should always contact the processor before filling or advertising a new offering, including GLP-1s. Asking whether the processor supports pharmacies broadly is not specific enough. The pharmacy should explain which products it plans to dispense, how patients will order and whether cards will be charged on a recurring basis.

The pharmacy should confirm that its current merchant agreement supports the products and ask whether the change will require underwriting review or additional documentation. It should also understand any effects on pricing, monitoring, or reserve requirements, as well as restrictions on advertising or accepting payment.

The processor may need to review the pharmacy's website, marketing, or recurring-payment terms, so the pharmacy should ask how much time to allow for that process. These answers allow the pharmacy to account for any additional costs and complete the required steps before launching. If the processor cannot support the product, the pharmacy has time to find another provider before payment acceptance is disrupted.

The pharmacy should also assign someone to notify the processor whenever the product mix, website, or billing model changes. The payment relationship should be reviewed when the business changes and not just when the account opens.

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