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Tag: PBM

Next-Gen PBM Capital Rx Becomes a Tech Co: Inside New PBA Biz, $106M Series C & Big Plans

by JESSICA DAMASSA

What’s the bigger news coming out of Capital Rx: that the next-gen PBM just closed a $106 million dollar Series C? Or, that the health tech startup’s business model has expanded significantly over the past 18 months, from PBM-only to PBM-plus-PBA, meaning that instead of just servicing the pharmacy benefits management needs of employer groups directly, that now they’re also adding to their business by selling THEIR TECH to other carriers and health systems so they can use it to administrate their benefits plans??

Capital Rx’s CEO AJ Loiacono takes those questions in stride, lets us in on which “side” of the business fueled their 200% year-over-year growth in 2021, and gives us the details on that tech that his business developed and why its standout compared to the inefficient infrastructure that currently exists to administrate and process pharmacy claims.

The big deal here is that AJ and team are tackling one of the biggest friction points in the cost of pharmacy benefits: the cost to administer a plan. They reduce that cost, and the “net cost” of every drug is reduced. AJ says its in this way that Capital Rx operates at one-seventh the cost of his competitors, the “Big Three PBMs” (CVS’s Caremark, Express Scripts, and UnitedHealth’s OptumRx) and saves its customers an average 27% on their prescription drug spend.

Now that Capital Rx has their slick enterprise software, will the business continue to operate a dual PBM-plus-PBA model, or will they double-down on the PBA side? AJ lets us know what’s next and (spoiler alert) it sounds like things might go in a surprising direction. If Capital Rx’s software is so effective at doing all the things it takes to manage pharmacy claims — underwriting sequences, implementation management and onboarding, communication, patient portals, network management, reimbursement networks, eligibility checks, etc. – what stops Capital Rx from processing other kinds of healthcare claims? Is a step into the medical claims processing side of the healthcare world on the roadmap? Tune in and find out!

Meet Rightway: The Little-Known $1.1B Care Navigator PBM Startup That Just Scored $100M

By JESSICA DaMASSA, WTF HEALTH

Despite nearly 900 employer clients (including big brands like Burger King, Kroger, and DoorDash), a net promoter score of 84, and a new pharmacy benefits management (PBM) program launched mid-pandemic, healthcare navigator startup, Rightway, seems to have come out of left field with its $100M Series C fundraise and $1.1B valuation. CEO Jordan Feldman introduces us to the company he’s built and its pretty impressive ability to achieve double-digit decreases in the cost of healthcare for mid- and large self-insured employers.

We walk through the business model, talk about the well-funded competition in both the care navigation and PBM spaces, and get acquainted with Rightway’s plans for scaling up and attracting new clients. An added little point of intrigue? As Rightway looks to gain a foothold working with health plans, Jordan mentions some interesting ties via its Series C investors. While the round was led by Khosla Ventures, with participation by Tiger Global and existing investors, it’s Thrive Capital, also an investor in the health insurance startup Oscar Health, that sounds like it might help Rightway make its way into the payer market.

PBM Startup Capital Rx Starts Prescription Drug Pricing Shake-Up with Walmart Partnership

By JESSICA DaMASSA, WTF HEALTH

A startup PBM? Partnered up with Walmart to bring “everyday low prices” to prescription drug pricing? Is this too good to be true? A.J. Loiacono, founder & CEO at Capital Rx, gives us a quick primer on “Pharmacy Benefit Managers” (PBMs) and why they’ve become known for the element of mystery they bring to prescription drug pricing. With three big PBMs (CVS’s Caremark, Express Scripts, and UnitedHealth’s OptumRx) controlling three quarters of the total market, it’s no surprise that VC-backed challenger companies in this space are rare. So, how does A.J. believe Capital Rx will shake things up? Learning about this new kind of tech-enabled, customer-focused PBM not only inspires hope for a clear future of prescription drug price transparency, but also makes one wonder about the new vision for American healthcare unfolding at Walmart.

The Solution Never Works If You Haven’t Identified the Problem

I have a bias, I admit it. I am sensitive to studies with a subtext of “those stupid patients, what are we going to do about them?” Read the following rant with that in mind.

A pharmacy benefits manager a/k/a PBM funds a study of patients nonadherent to chronic prescription medication. The premise of the study, Effect of Reminder Devices on Medication Adherence: The REMIND Randomized Clinical Trial (hiding behind a paywall, by the way), is that “forgetfulness is a major contributor to nonadherence to chronic disease medications and could be addressed with medication reminder devices.” Thus, the intervention consisted of sending a population which included folks taking meds for schizophrenia and bipolar disorder either “a pill bottle strip with toggles, digital timer cap or standard pillbox” along with their mail order meds. There was of course a control group who received neither notification or a device. Surprise, surprise! Getting a prize in your Crackerjack box from your PBM does not improve medication adherence. Those stupid patients! Why won’t they do what’s good for them?

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Are prescription drugs going the way of Napster, YouTube and iTunes?

The distribution of prescription pharmaceuticals is beginning to take on some of the characteristics of online videos and music. Traditionally, access to prescriptions works as follows:

  1. Patient has a problem
  2. Patients sees his/her physician
  3. Physician diagnoses problem and writes prescription
  4. Patient takes prescription to traditional pharmacy or PBM-owned mail order company
  5. Pharmacy fills prescription with a drug manufactured by an FDA-regulated brand name or generic pharmaceutical company
  6. Patient takes medication
  7. If patient needs more medication after initial prescription and refills are exhausted, patient requests renewal from physician and repeats steps 4 to 7

But steps 2 through 7 are breaking down. Instead of seeing their physicians, increasing numbers of patients are either going directly online to order from pharmacies or are borrowing pills from friends and family who’ve received prescriptions. According to MedPage Today (Adults Commonly Share Prescription Drugs with Friends and Family) almost 30 percent of adults reported sharing prescription medications with others. Younger people are the most likely to share.

Meanwhile, shady web-based pharmacies that don’t require prescriptions and often sell counterfeit drugs are becoming increasingly sophisticated and impressive. MarketMonitor estimates that about 1000 shady pharmacy sites generate an average of 100,000 hits per day each and that such pharmacies spend about $25 million per year on search advertising. An acquaintance who works in the pharmaceutical security business told me that these pharmacies aren’t what they used to be. In fact they are adopting marketing and customer service best practices that are used by legitimate vendors. Rather than going for a quick score, the web-based companies are looking for repeat business and word-of-mouth referrals by providing products that work, offering easy-to-navigate websites and low prices.

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