Last year, WithMe Health made its public debut with an ambitious goal: build a better alternative to the current trifecta of pharmacy benefit managers that dominate the industry. While most PBMs emphasize rebates and discounts, the idea was to also consider waste, whether through patients taking a drug that isn’t working, or picking up an expensive prescription when a comparable, cheaper alternative is available.
“It’s just incredibly opaque for all of the wrong reasons. There’s just a massive misalignment of interests,” Joe Murad, who joined the company as its CEO last year, said in a phone interview. “They’re not incented to lower your costs and improve your outcomes. They make more money on spread and the medications they sell.”
Now, with $20 million in series B funding led by OMERS Ventures, the company is branching to offer a medication guidance service that can pair with existing PBMs, in addition to its full-service PBM replacement.
Going up against the big incumbents — CVS Caremark, Cigna’s Evernorth (formerly Express Scripts) and UnitedHealth’s OptumRx — is no easy task.
“That’s why we’ve uncoupled part of this service offering, to be able to complement it. We know that it’s challenging to go compete against some of these larger PBMs based on price. We need to change the narrative,” Murad said. “Irrespective of whether I can buy it cheaper, if you are wasting a portion of that spend because of poor utilization, it doesn’t really matter how well you purchase it.”
Michael Yang, a managing partner with OMERS who will join the startup’s board of directors, pointed to WithMe’s reframing of what PBMs do and its experienced management team as reasons for investing. Murad served as COO of Extend Health through its sale to Willis Towers Watson, and the company was founded by Oak HC/FT Partner Chris Price, after he, too, saw a need for a different model.
“The complexity associated with a patient’s journey with prescription medications is only getting worse and the dollars spent on Rx are not abating so we believe it’s an imperative to try and address this problem,” Yang wrote in an email. “It’s something that I’ve seen for a decade now from my vantage point as an investor in employer health solutions.”
There’s a technical component to WithMe’s work in figuring out what drugs work for each person. But there’s also a human component. Similar to other insurance navigation startups, it pairs patients with pharmacists that help guide them to the best outcome.
For example, they might help guide patients around what side effects to expect and how to manage them. Or, if a medication isn’t working, they might work with a patient’s care team to help them switch.
The company is not paid based on rebates, but instead charges a per-member per-month fee for its services.
The pressure is on for employers to reduce their prescription costs, which are on the rise. Pharmacy makes up 20% to 30% of some employers’ healthcare spend.
“They’re all self-insured and it’s their own dollars. It’s been so opaque for so long,” Murad said. “They don’t have a seat at the table and we’re trying to impact that.”
He said WithMe brought on its first customer for its full-replacement service a month ago, and another 20 companies are rolling it out.
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