Rightway, an alternative pharmacy benefit manager (PBM), is trending upward and best positioned to challenge the "Big 3" leaders in the industry, said CEO and co-founder Jordan Feldman in an exclusive interview with Fierce Healthcare detailing the company’s internal business metrics.
The company says it has grown by more than 100% on the PBM side of its business each of the last three years.
Rightway works with more than 2 million members on care navigation and 2 million additional members on the PBM side, a feat accomplished faster than any other PBM, said Feldman. The key, he said, is a commitment to financial alignment and member experience.
“You know, there’s a boneyard, and there have been other PBMs historically that have been financially aligned and transparent,” he said. “We’re doing it to a different level. What we have to be the best in the world at is that member experience, the ability to manage utilization and adherence.”
Members with Rightway are paired with clinical pharmacists and have access to technology helping them understand costs and accessibility.
The company passes through 100% of its rebates to employers, does not own dispensing assets and applies a per-member, per-month administrative fee based on projected savings. If actual spending exceeds the estimates, Rightway refunds the difference.
Feldman spent three years at Goldman Sachs before joining RedBird Capital Partners and then creating Rightway in 2017. He said the company first caught interest from tech companies embracing innovative ways to cut costs. Rightway now works with more than 30 Fortune 500 companies across industries.
“We’ve had revenue retention of 113%, demonstrating that employers are not only transitioning to Rightway, but they're growing with Rightway and our product services and offerings,” Feldman revealed.
The company has also reduced pharmacy spend for employers by 16.1%.
In a recent Business Group on Health survey, a majority of respondents said they had concerns about the lack of transparency in the pharmacy supply chain. Pharmacy costs also increased from 21% to 27% between 2021 and 2023. This trend is especially concerning for employers seeing the rapid uptake of GLP-1 drugs and arrival of pricey cell and gene therapies, making alternative PBMs more important than ever, said Feldman.
“Over the next two years, we are going to become the clear alternative to the Big 3 PBMs,” he added.
Increasingly, federal lawmakers have aimed their focus on PBM reform, attempting to rein in UnitedHealth Group’s Optum Rx, Cigna’s Express Scripts and CVS Health’s Caremark divisions. Collectively, the three vertically integrated companies account for 8 in 10 prescription claims in the country.
A drafted version of President Donald Trump’s reconciliation bill would’ve enacted new requirements for PBMs in government health programs, including prohibiting spread pricing in Medicaid. But PBM measures were ultimately axed by the Senate.
For years now, both Democratic and Republican members of Congress have agreed upon cracking down on PBMs. It seemed Congress would finally take action at the end of last year, but Trump, and then-ally Elon Musk, pressured Republicans to derail the bill for non-healthcare reasons.
PBM reform could once again be included in an end-of-the-year package, but Democrats may be unlikely to support a bill in protest of recent cuts to Medicaid and the pending expiration of Affordable Care Act extended subsidies, reported Politico.
Despite criticism from Congress and the Federal Trade Commission, PBMs have managed to escape broad changes.
“I’m a skeptic on Washington’s ability to drive reform within the pharmacy benefit space,” said Feldman, adding that much of the proposed legislation focuses solely on government programs, and reforms can take decades to trickle down to the enterprise space.
Employees at major companies are continuing to sue over fiduciary duty of benefit teams to control prescription drug costs. The hands-off approach employers often choose of selecting a traditional PBM is, he said, slowly proving to be an outdated line of thinking.
“From a fiduciary and planned performance perspective, it may actually be a bigger headache and come with more real and perceived risk than partnering with an innovator,” he explained.
While some change may come from litigation, change will happen quicker through innovation in the private market, he said.
“Healthcare innovation and adoption is really incremental until it becomes exponential,” said Feldman.