One of the biggests pain points in out-of-pocket medical costs lies in the pharmacy benefits space. A 2020 survey showed that while 99% of employees with employer-sponsored health coverage have a prescription benefit, 62% of workers face an out-of-pocket maximum greater than $3,000. Legacy Pharmacy Benefit Manager (PBM) architecture is driven by rebates, spread pricing and profit pools that are often opaque and largely misunderstood. More often than not employees don’t understand what to do, where to go, how to get there, and how much something costs when it comes to their prescription medication.
After beginning his career in finance and private equity, Jordan founded Rightway, first with a focus on benefits navigation and advocacy to help employees understand and use their benefits. Before long, Jordan realized that there was a clear opportunity to reinvent what it means to be a PBM and launched RightwayRx. Today, they are reporting an 8% reduction in first year drug costs and 5% reduction in member cost sharing, signaling true innovation in the PBM space.
We chatted with Jordan to hear about how Righway is doing things differently when it comes to pharmacy benefits to help employers and employees alike save money on prescription drugs.
How Misaligned Business Models Don’t Serve Employees
Jordan begins by saying, “When we think about the biggest challenges, or the biggest frustrations with the existing PBM financial model, the first big and obvious piece is the existence of rebates (drug manufacturers paying PBM rebates for inclusion on formularies) which creates kind of a fundamentally misaligned business model.”
When the PBM and drug manufactures use rebates and spread pricing, they have different incentives that often drive up out-pocket-costs for the employer or the employee.
Rightway diverges from this by seeking to be fully transparent with the employee, and fully aligned with the employer, in order to offer the most cost-effective, high quality pharmacy benefit experience.
How Rightway Built a More Affordable, Quality Pharmacy Benefit
Jordan attributes RightwayRX’s ability to lower costs and improve the experience to three main things—
First, Rightway doesn't take rebates and has a competitive cost of goods. That’s how they are able to generate significant savings just on the cost of the pills. Rightway saves about 7% per pill on average today.
Second, Rightway prioritizes navigation to help employees more easily navigate their pharmacy benefits. Jordan says that at Rightway, the team thinks of a navigation program as the doctor in the family that can give employees the advice they need. This means helping them understand all their options, such as brand versus generic, the best place to get their medication, the difference between mail order versus retail, 30 or 90 days supply, etc. By putting resources for all things healthcare— telemedicine benefits, care navigation, bill advocacy, and the pharmacy benefit— together under one roof, employees can find the right solutions for their health needs.
Finally, Rightway drills in on the clinical model. With a large set of stakeholders at play, including pharmacists and physicians, Rightway’s clinical team helps employees around utilization— to allow them to adhere to often costly medications that they might not otherwise be able to afford. In doing this, they’re able to help not only drive down costs but also to improve health outcomes.
In the end, Rightway’s ability to create a more aligned business model alongside focused member experience is what adds up in the end to create a world with healthier employees, and happier employers.
Jordan’s Recommended Resource
On every episode of Better Benefits, we ask our expert guests for a book or resource they’d recommend to others working in the benefits space. This week, Jordan recommended:
Range: Why Generalists Triumph in a Specialized World by David Epstein. Published in 2019, the New York Times best seller challenges the idea that anyone who wants to develop a skill, play an instrument, or lead their field should start early, focus intensely, and rack up as many hours of deliberate practice as possible. Epstein dives into research on the world’s top performers, from professional athletes to Nobel laureates to show that early specialization is the exception, not the rule, and that often the most successful people are versatile and have a diverse set of skills and backgrounds.
If you’d like to connect with Jordan you can message him on Linkedin.
Note, this episode is for informational and educational purposes only. Jordan Feldman and Rightway are not endorsed, affiliated with, nor compensated by Brella Insurance Inc. To learn more about Brella, check out our plan and get in touch.