We’ve all seen the sensational headlines in recent years — healthcare costs continue to skyrocket, drug prices are out of control, and patients are going bankrupt because of their medical bills. What is going on?
As we all know from Economics 101: cost = price x volume or said in the healthcare context, spend = unit price x utilization. While a lot of attention has been focused on healthcare services spend (inpatient, outpatient), the spotlight is really starting to shine on prescription (Rx) medication spend. Many years ago, a CHRO of a large self-insured employer told me that he wasn’t particularly fussed about Rx spend because it was only 10% of his annual healthcare tab. Well, that figure has risen to 20–30% of total healthcare spend for many employers today. When one looks at the near-term trend line for Rx spend, it is forecasted to go up, as specialty Rx dominates the scene (increased share of Rx utilization and increased share of the drugs coming to market) and overall medication consumption of everything non-specialty also rises.
So we, at OMERS Ventures, thought this is a particularly interesting problem to try and address. Clearly, the incumbent system of contracting, distribution and administration of Rx for the plan sponsor (employers, unions and other pools of members who are underwriting the Rx spend) could be refactored.
Today, we are excited to announce that OMERS Ventures has led a $20M Series B in WithMe Health, a medication guidance company. WithMe Health (WMH) offers a plan sponsor an alternative to a traditional pharmacy benefits manager (PBM) relationship. WMH, not only aims to provide the lowest effective unit prices and do so in a most transparent manner for the plan sponsor, but it also strives to go super deep on all things medication management.
The journey for patients taking their medications has never been more complicated — whether you’re a patient filling a first time, episodic prescription or you’re a patient on a chronic cocktail trying to renew and adhere, it’s not easy being on meds.
Mind you, it’s no picnic for the plan sponsor either. Try going through the annual exercise of determining what should make this year’s formulary, what to cost-share with employees, what fancy new pharmacy delivery service to permit, and how to respond when you get the infamous cash vs insurance complaint. You know — that late night email the CEO forwards you demanding a response because an employee’s spouse figured out it would be cheaper to pick up a prescription and pay cash than to pay the co-pay via insurance. Once you get a few of those flaming emails, you know it’s time to update the LinkedIn profile. (As an aside, I pity all the benefits managers besieged this past week with questions on whether their employees can use Amazon Pharmacy — that poor person’s inbox, voicemail and Slack channel.)
Everyone loves to talk about the PBM landscape being dominated by 3 players who are key puzzle pieces in larger industrial health complexes. CVS Caremark (part of CVS Health), OptumRx (part of United Healthcare Group), and Express Scripts (part of Cigna) rule the market and have established the rules of the game and focused them on price. With their incredible volume, they are black belts in discounts, spreads and rebates. It’s why a bevy of consultants and brokers exist to help plan sponsors figure out which way is up. But in the industry’s collective quest for price optimization, utilization gets left behind. And when I say utilization, I mean waste.
There’s good Rx utilization and bad Rx utilization (waste) and I hadn’t been able to figure out who cares enough to do anything about identifying waste until I sat down with WithMe Health (WMH). Good medication utilization is picking up your meds, staying on them for the duration of your therapy and getting better. Bad medication utilization comes in many forms– being blocked by prior authorization from taking something you clinically need, taking something that you don’t clinically need, or picking up a more expensive script when there is a perfectly clinically comparable, cheaper alternative. WithMe Health is a new kind of PBM that’s focused on medication guidance and reducing the level of waste that a plan sponsor and member experiences.
WMH was founded a couple of years ago by Chris Price and Ash Damle, long time healthcare innovators and funded by our friends at Oak HC/FT. Since then, the company has brought onboard Joe Murad as CEO, Dickon Waterfield as CCO and Smita Nair as CPO — tried and true healthtech veterans from Extend Health, Big Health and Evolent, respectively.
They’ve been busy developing their own clinical points of view on drug regimens. They’ve been busy creating their own member engagement model predicated on behavioral psychology supporting multi-modal communications (apps, messaging, phone). They’ve been busy developing a tech stack that augments their Medication Guides (clinical professionals such as pharmacists, pharm techs) with the best data-informed decision support to help the patient take the next best action.
Yeah, that’s a heckuva mouthful which basically means, WithMe Health’s north star is the patient, and you better believe their tech and their people will do whatever possible to help that patient make the right personalized medication journey.
WithMe Health’s north star is the patient.
In an industry focused on dollars and cents, we somehow got away from the humanity of it all. No one wants to be on meds and that is compounded by how ill-informed we all are as consumers in this realm. WithMe Health can turn the dial in a way to make this experience better for the patient. They can help the plan sponsor win and they can make a dent in the Rx spend trend.