Compliance RX

Adherence to chronic medications is about 50%.

·      Chronic medication is medication taken on a routine basis to obtain outcomes with the disease state. Examples are Diabetes, Hypertension, High Cholesterol, etc.

·      The responsibility falls on the patients (or pharmacies).

·      Medication adherence can affect the quality of and length of life, health outcomes, and overall healthcare costs.

·      Nonadherence can account for up to 50% of treatment failure, around 125,000 deaths, and up to 25% of hospitalizations each year in the US. This increases the cost for Employers, Insurance companies, Medicare, Medicaid, etc. so this group would have an economic benefit with increased compliance.

·      Need 80% compliance, or more, for optimal efficacy.

I'm a pharmacist and have been in pharmacy for 20+ years. I understand the pitfalls of compliance and know how to solve the problem. It requires changing how Health Insurers, Pharmacy Benefit Managers ("PBM's") think about patients and how they manage the patient's copays. 

I don't want to create a PBM, I want to change it. Transparent PBM's is the new buzzword with raising capital and this is not what I want to do. Transparent really has no meaning except being less greedy than traditional PBM's. This new model will increase compliance and incentivize the patient to get a refill on medication when appropriate. It solves patient compliance and stays within regulatory compliance or issues. It can become its own segment of the pharmacy healthcare system (more of an Aflac model) or can integrate with more traditional PBM models. Data will be easily obtainable once implemented and proving the model can be achieved rather quickly. This model will benefit the patient, health insurers, Medicare and Medicaid. 

The key to success is incentivizing the patient. Currently, if patients have a high copy of a medication, compliance goes down dramatically. Low-cost copays or zero-cost copays also don't incentivize the patient to refill medications on time. An example of a high-cost copay is the new diabetes medications, one of the fastest-growing segments in pharmacy and the fastest-growing disease states. When a patient has a copy of $150-$300/month, this disincentivizes a patient to get on a routine basis or continue it at all. These new medications are extremely helpful but not everyone can afford the cost. Manufacturer coupons help with some private insurance copays, but anyone who is on Medicare or Medicaid does not qualify for Manufacturer coupons. Patients genuinely want to continue their medications, but the rate-limiting step is cost (or zero cost). We must incentivize the patient to continue to get the medication and get it on schedule. 

Pharmacies routinely try and set patients up on "automatic" refills but this breaks down when the patient is not taking the medication correctly. The pharmacy will fill it and the patient won't pick it up since they have some left from the previous fill. Along with that problem, pharmacies can not "automatically" fill a prescription for a Medicare or Medicaid patient without getting permission first. Calling every patient before filling a script is not achievable with current staffing models in pharmacy. Pharmacy can not solve compliance problems. PBM's are calling patients and telling them they need a refill on their cholesterol medication and to call their pharmacy. How much wasted money is being spent by PBM's on calling patients? This must be solved by putting the responsibility on the patient, not the pharmacy or the PBM.

Since this will become a market on its own, the only comparable market is the PBM market. In 2022 that market was $482.4B and is estimated to grow to 8.8% annually. This model could easily become $100B within a few years once the data is in. The reduction in Healthcare costs from the benefit of this program would offset any cost associated to Health Insurers, Medicare, and Medicaid.

There are many levels to this model from standard PBM functions to app integration with the patients. Raising $5MM is based on technology requirements and could be done for less, or more, depending on which model and direction an investor wants to take. There are several steps that can be taken to minimize the initial cost, but there will be higher monthly costs.