Pharmacy solutions and pharmacy benefit managers perform several functions, including administrative tasks, handling benefit processing claims and negotiating with the supply chain. However, the problem is that many of them are performing these tasks on outdated technology.
“All of those things, to do them well, require a foundation of technology capabilities to enable our people to operate at the top of their license. … The majority of the industry is using 30 to 40-year-old technology to do all of this work,” said Mostafa Kamal, president and CEO of pharmacy benefit manager Prime Therapeutics, in an interview.
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That’s why Prime Therapeutics has formed a strategic alliance with Capital Rx, which is also a PBM, the companies announced last week. Through the alliance, Prime Therapeutics will be the only PBM — aside from Capital Rx — to use Capital Rx’s JUDI platform. JUDI is a pharmacy benefits administration platform that puts all PBM operations into one place. It can help with claims, clinical programs, data exchange and other tasks.
“What we wanted JUDI to do as an enterprise platform is to unify all of these work streams on one platform because this will give us more accuracy and efficiency,” said AJ Loiacono, co-founder and CEO of Capital Rx, in an interview. “It’ll give us the ability to deploy better clinical programs and continue to improve the quality and care of our customers.”
Prime Therapeutics has become a minority investor in Capital Rx as part of the strategic alliance. In addition, Prime will be paying Capital Rx for licensing the platform, Kamal said.
At a time when drug costs are a major concern for consumers, the collaboration will help lower costs by making processes more efficient, the companies argued.
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“If you can create better workflow optimization and automation on a unified platform, you’re going to reduce costs, which will benefit everyone involved in claims administration and healthcare management,” Loiacono said.
Working with Prime Therapeutics allows Capital Rx to scale its JUDI platform, Loiacono added. Prime Therapeutics is owned by 19 Blue Cross and Blue Shield Plans and serves more than 50 million members.
Prime Therapeutics chose to work with Capital Rx after deciding to modernize its technology platform, according to Kamal. He said the company had several options, including partnership, acquisition and building the platform itself.
“When we looked at everything that’s out there in the market, JUDI stood head and shoulders above anything that’s out there, anything that’s in development from our viewpoint. … Then when we looked at building it ourselves, this is a commitment and it’s an investment,” Kamal said. “While we’re capable and willing to make the investment, that’ll take five to 10 years to get to where Capital Rx is today.”
The strategic alliance comes at a time when PBMs are facing a lot of scrutiny from the federal government. The Federal Trade Commission has an ongoing investigation into PBMs and Congress has also introduced several bills targeting PBM practices (though they got a reprieve when PBM reforms were left out of congressional funding bills). PBMs need to respond to what the market is looking for: transparency, lower costs and better customer experience, Kamal said.
Loiacono added that security is a major concern for the industry, which he said is a big focus for Capital Rx. The recent Change Healthcare cyberattack, which resulted in patients across the country struggling to get their prescriptions, exhibits the need for better security, according to Kamal.
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