2023 has been an incredible year for Capital Rx. Starting off with a bang – with JUDI® processing live Medicare claims – every member of the team has worked hard to further our mission to deliver affordable pharmacy benefits at the best possible price point, all while improving health outcomes and upgrading our nation’s electronic claims processing infrastructure.
In celebration of everything that’s been accomplished, we wanted to take a moment and highlight the company’s biggest wins that made waves on social media or were in the news this past year, including the recognition that the industry is attempting to move toward the standard Capital Rx has set for drug price transparency and pharmacy benefit management (PBM) pricing.
JUDI Brought Streamlined Pharmacy Benefit Administration Workflows to Government Programs
How did the Capital Rx executive management team ring in the New Year? Watching JUDI successfully process Medicare claims live. As Capital Rx CEO A.J. Loiacono explained, JUDI was developed after Medicare Part D expansion, and if anyone “wants to process prescription claims at the lowest price point, with the highest level of accuracy and service, there is only one option…JUDI.”
Why PBMs Need to Be Fixed, Not Abandoned
PBMs occupy a unique position within the healthcare ecosystem, and because of this position, they often are on the receiving end of public ire. As part of an article in Fierce Healthcare, AJ Loiacono explained why PBMs are a necessary part of the pharmaceutical supply chain and how they should be fixed, not abandoned entirely.
The main issue here is transparency around drug pricing; AJ explained, “The total billables for the pharmaceutical industry in the domestic U.S. was probably around $120 billion in 2000. Today, it sits at around $600 billion. We didn’t increase our population by 500%. Now, it’s just been runaway costs.”
However, PBMs still perform important administrative functions and are critical to claims administration, patient management, outreach, and much more. That’s why it’s critical not to do away with PBMs entirely but instead to rethink the way PBMs operate.
Earning B Corp™ Certification
Capital Rx earning B Corp™ Certification was a huge first-quarter accomplishment. The B Corp™ Certification required a comprehensive review of the business’ structure and vision, including its social performance, accountability, transparency, stakeholder governance, and commitment to economic systems change.
With fewer than 7,500 companies being B Corp™ Certified, this distinction means a lot to the Capital Rx team and reflects our patient care-focused approach to pharmacy benefits.
AJ shared this about the distinction: “With the growing chorus of regulatory and legislative members decrying the questionable drug pricing practices of legacy PBMs, our B Corp™ Certification stands out; it acknowledges the importance of the transparency and accountability embedded in the Capital Rx business model.”
AJ Loiacono Won Entrepreneur of the Year, New York
In June, Ernst & Young LLP (EY US) announced that Capital Rx Co-Founder & CEO, AJ Loiacono, won the coveted Entrepreneur of the Year award, which recognizes transformative entrepreneurs and leaders of high-growth companies building a more equitable, sustainable, and prosperous world for all.
Building Partnerships and Delivering Solutions
This year, Capital Rx announced two partnerships, both of which deliver solutions that address chronic health issues.
Rx Reverse, a partnership between Capital Rx and Virta Health, announced in July, aims to help customers reduce costs and improve members’ health through a combination of Capital Rx's tech-enabled PBM service model, powered by JUDI, and Virta's solution – personalized nutrition therapy, physician-led deprescription, remote monitoring, and one-on-one coaching to reverse Type 2 diabetes and fight obesity without costly medications.
In October, Capital Rx partnered with Vida Health to launch Rx Activate, a new clinical program designed to address fundamental gaps in care with a formulary- and benefit-aligned program. Specifically, Rx Activate includes high-touch medication management supported by exceptional member service to build trust with providers and patients and help bring down the total cost of care for cardiometabolic chronic conditions such as hyperlipidemia, hypertension, diabetes, congestive heart failure, and weight management.
PBM Regulations & Transparency
With impending congressional action focused on PBM transparency, questions have swirled about the implications of this action. Throughout the year, Capital Rx experts have led discussions diving into these legislative actions and discussing the resultant implications.
Capital Rx’s General Counsel and Chief Compliance Officer, Lloyd Fiorini, led a webinar in June that discussed provisions in the Consolidated Appropriations Act (CAA), Inflation Reduction Act (IRA), PBM Transparency Act, PBM Reform Act (HELP), the highlights of recent Senate hearings, and state-level activity, including Florida’s Prescription Drug Reform Act. He also discussed the impacts this legislation has on PBMs and stakeholders managing health plans (including pharmacy benefit programs).
Furthermore, in September, Modern Healthcare Executive ran a story focused on the issue of PBM transparency. In that article, Josh Golden, SVP of Strategy, noted that transparency is just one piece of the puzzle.
“Transparency gives you visibility into the supply chain and how money is being made. But once people figure out how the money is made and understand whether those sources of profit are contributing to overall healthcare, then the next aim is the misalignment that exists.”
Josh also called out that other changes, including pass-through rebates and the elimination of spread pricing, would drive definitive change in the PBM industry.
The Rise of GLP-1 Drugs
2023 has seen a sizable increase in the usage of glucagon-like-peptide-1 (GLP-1) drugs and lifestyle programs focused on weight loss. Rising alongside the usage of these drugs are their prices.
In June, Chief Clinical Officer Sara Izadi, PharmD, joined Virta's President, Kevin Kumler, Commercial Health Director, Frank Dumont, MD, FACP, and Chief Medical Officer, Adam Wolfberg, MD, MPH, to provide holistic feedback on the use of GLP-1s for weight loss, rising pressure on health plans to cover this new drug class, and other clinical strategies to address obesity.
They also discussed the latest trends in utilization management, what leaders should consider doing in light of surging interest and costs, and much more.
GLP-1 drugs were also highlighted in a Business Insider article the same month. AJ offered his insights, explaining how these drugs could increase pharmacy costs by as much as 20%. He explained that employers are taking a holistic approach to understanding the impact GLP-1 drugs will have, and he’s advised that they take things slowly.
“Employer groups have budgets. Municipalities have budgets. Unions have budgets. Everyone has some sort of threshold of cost, and so what they're trying to do is thread the needle of providing access to the patients that truly need it the most, looking at the benefit for their health, and also looking at the cost.”
Capital Rx Closed a $50+ Million Strategic Investment Round
In early October, Capital Rx closed a $50+ million strategic investment involving more than 10 of the nation’s leading health systems, including Atlantic Health System, Banner Health, Hawai’i Pacific Health, Inova Health System, Lehigh Valley Health Network, Memorial Hermann Health System, Nebraska Medicine, Novant Health, Ochsner Health, and WellSpan Health, among others, as well as existing investor Transformation Capital.
This round of funding will be used to accelerate JUDI’s development and is further evidence that demand for a modern, efficient, and scalable platform is vast. Plus, it never hurts to see such exciting news highlighted in Times Square. Thanks for the shout out, Nasdaq!
AJ Stopped by the New York Stock Exchange to Talk JUDI and Healthcare Infrastructure
The New York Stock Exchange is arguably one of the most exciting places to visit in New York City, but it was even more electric when AJ Loiacono visited to appear on Floor Talk with Judy Shaw.
There, they discussed JUDI and how our modern enterprise health platform is building desperately needed digital infrastructure to meet modern healthcare needs.
AJ also discussed the current state of the healthcare industry, how Capital Rx has managed to build and maintain trust in the market, and the unique opportunities and challenges in Medicare and Medicaid claims processing.
The Wall Street Journal Reported on a Capital Rx Client's Cost Savings
In November, The Wall Street Journal talked with representatives from Footlocker and The Teamsters Health and Welfare Trust Fund of Philadelphia and Vicinity to understand why they parted ways with their prior PBM, the latter of which recently renewed its contract with Capital Rx.
Explaining why, Maria Scheeler, executive director for the Teamsters Fund, mentioned that they have saved more on drug spending each year than projected, including 17% the first year after the switch. Another plus is that Capital Rx passes through all the rebates it negotiates. The switch was, according to Scheeler, "The best decision ever."
This WSJ story doesn’t just highlight the long-standing transparency issues within the PBM industry; it also illustrates the benefits of an aligned PBM or pharmacy benefit administration (PBA) partnership.
Axios Highlighted Capital Rx’s Influence on the Pharmacy Benefits Market
Tina Reed succinctly summarized the pressure that employers and governments are applying to the legacy PBM business model in her article, "CVS Drug Pricing Overhaul Signals a Broader Industry Shift."
Elizabeth Mitchell, CEO of the Purchaser Business Group on Health (PBGH), had this to say: "Capital Rx and some of the new transparent PBMs are demonstrating that this [drug price transparency] is a fair expectation from employers.”
What’s in Store for 2024?
We can’t give away anything yet. Rest assured, though, there are plenty of exciting developments coming after the start of the new year. Whether it’s PBM software, claims administration, drug pricing, or another development, when relevant news arises, we will let you know!
If you would like to learn more about Capital Rx’s full-service PBM or PBA solutions, CLICK HERE to get in touch with our team.
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