Rightway’s Plan to Dismantle the Pharmacy Benefit Monopoly

“The PBM space has been worse than some criminal enterprises — they are stealing money from employers and employees,” says Jordan Feldman, CEO and co-founder of Rightway Healthcare. Feldman joins Bloomberg Intelligence analyst Jonathan Palmer on this episode of the Vanguards of Health Care podcast to unpack how Rightway is building a member-first pharmacy benefit manager (PBM) — one without rebates, gimmicks or hidden margins. They dive into Rightway’s origin story, how its care-navigation platform grew to 3.5 million members, and why a transparent, clinically-grounded PBM is the antidote for industry dysfunction. Feldman also shares thoughts on GLP-1 drugs, AI and what it means to be the so-called N-of-one alternative to the Big 3 PBM’s monopoly.

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:17):
Welcome to another episode of Boomberg Intelligences Vanguards of Healthcare podcast,
where we speak with the leaders at the forefront of
change in the healthcare industry. My name is Jonathan Palmer,
and I'm a healthcare analyst at Bloomberg Intelligence, the in
house research arm of Bloomberg. It's my pleasure to welcome
Jordan Feldman, the CEO and co founder of Right Way
to the podcast today. Right Ways of relative newcomer to
the care navigation and pharmacy benefit management space. It was

(00:41):
founded in twenty seventeen and is raised north of two
hundred million in capital so far. I'm really excited to
dive into the world of this intersection of care and PBMs.
Welcome to the podcast, Jordan.

Speaker 2 (00:51):
Yeah, thanks, Johnathan, a pleasure to be here.

Speaker 1 (00:53):
So let's just dive right in, Like, how do you
describe your mission in a couple sentences.

Speaker 2 (00:58):
Yeah, we were started with a very simple mission and
founding story, which was essentially, how do we provide a
doctor in the family to every member that we work with.
This notion of a doctor in the family was, you know,
so personal to me. It was, you know, part of
my childhood growing up with my dad who's a doctor,
and you know, seeing if we could scale that personalization,

(01:21):
that advocacy to you know, all the members that we
work with across all our businesses, care, navigation, pharmacy, benefits,
and you know everything else we continue to work on.

Speaker 1 (01:30):
Well, it's great summary. So maybe let's rewind a little bit.
But when did you get the bug to become an entrepreneur?
I mean you started in finance and then moved into
the investment world. What what I mean? I can understand
how my dad was a pharmaceutical exec. You know, how
how you wind up in help care.

Speaker 2 (01:44):
Yeah, growing up with a dad that it's a doctor,
it was you know, the aspiration from a young age,
you know, going and shadowing him and wearing a stethoscope
and uh thinking for an awfully long time that I
was going to follow in his footsteps. You know. It
wasn't until about sophomore year of college where I you know,
realized that one the science and math and educational effort

(02:08):
that it involved was probably less compelling for me, but
two that there was a whole other world out there
where you know, I could flex the muscles and interests
that I had and you know kind of evolved into
you know, a career that started in finance. But I
think from an early you know, kind of inflection point,
I was getting the entrepreneurial bug. You know, got an

(02:29):
opportunity to go work at Uber. Early on was you know,
building you know, business plans with friends outside of work
at the time, and you know, it was at Redbird Capital,
the private equity firm that I was at where I
really started to dig deep into the healthcare world and
you know, spend time with a lot of the companies
that have been you know, on your show previously and

(02:52):
understand what was out there, what problems were being solved,
where some of the shortcomings were. And you know, I
took a step back and I said, this is worthy
of committing a life's work to. And you know, that
was in about twenty sixteen, and I had a conversation
with my boss at the time, and you know, he
gave me some of the courage and motivation to do it.
And then just you know, have been going head first

(03:14):
since that time.

Speaker 1 (03:16):
So what was the first iteration of the idea? You know,
when you sat down in twenty sixteen when you thought
about what you wanted to build, what was.

Speaker 2 (03:23):
It Yeah, very simple. You know, around a lunch table
with my dad, friend's family patient, strangers are going up
to him, Hey, doc, where do I go from my aphibablation?
How do I get a cheaper prescription drug? How do
I utilize my telemedicine benefit? How do I get an
appointment in your office? And you know, the initial iteration
of right Way was all around how we support you know,

(03:46):
those frustrations and friction within the healthcare ecosystem. And you
know that's really where the doctor and the family notion
came from. So you know, the initial iteration of right
Way was all around that care, navigation, that advocacy, that support,
but really as an optimization layer on top of the
medical and pharmacy benefit you know, that steerage around site
of service, intensity of service, quality of care. You know

(04:09):
what we quickly found out and I know we're going
to dive into this, was we couldn't optimize a broken
system on the pharmacy benefit side. We couldn't just be
this information and navigation layer on top of a fundamentally
misaligned and broken system. So you know, we took a
step back, and you know, with our founding DNA and
core ethos of that doctor and the family said, how

(04:29):
could we really imagine the PBM you know, from the
principles of what we really started to accomplish, which was
you know that doctor, that pharmacist in the family. So yeah,
it was all about you know, the stuff that my
dad does for friends, family, patients, strangers every day and
thinking about the scalability and the you know, execution of

(04:50):
that effort.

Speaker 1 (04:51):
Well, if we think about that world of navigation, I
mean it's a little bit different than the PBM market.
You know, what sort of traction did you gain early
on because the career either have been navigators twenty plus years.
I think there's you know, different iterations and cohorts of
people coming into that navigation space.

Speaker 2 (05:08):
So you know today right way on the navigation side,
we worked with over three thousand employers. We have about
two and a half million members on our navigation platform.
And the initial wedge into navigation was the fact that
the industry was essentially you know, bifurcated. You had the
you know, digital only non clinical solutions that were a

(05:31):
low PEPM and had you know, equally low engagement and
you know that kind of marked one end of the
spectrum and then on the other end of the spectrum,
you had these highly disruptive, quite expensive, you know, quite interventional,
what I would call kind of circuit breaker models. Okay,
you know, that really solved a problem for a very

(05:52):
specific audience, but not every employer everywhere. So you had
this low engagement, you know, low utilization, low efficacy on
one end of the spectrum, and this highly disruptive rip
and replace on the other. And we said, you know,
there's a wedge in between that had the clinical elements
that utilized great technology, that recognized that navigation wasn't the

(06:15):
end all be all for the entirety of the ecosystem.
A lot of the components of navigation could be commoditized.
But you know, I think what we realized was at
the right price and with the right service levels and
with the right clinical support and you know, with the
right technology, that the value of navigation was undeniable. And
you know, the challenge with navigation historically has been it's

(06:38):
really hard to prove you know, the preventative nature of navigation,
getting someone to a good PCP and all the goodness
that happens there, getting someone to a cost efficient MRI facilities,
so they actually go through with the test, and you know,
what we started to see was the defensibility of navigation,
you know, was a little bit fluid. But if you

(06:58):
sat there with the cfo OH or the head of
benefits and you told them about you know, the eight
qualitative use cases that navigation would solve, there was no
dispute that it was valuable. So we thought about navigation
as kind of right price, you know, right service level,
not a lot of redundancy with what the health plan
or the PBM was already doing. And you know, it

(07:21):
really started to work. And we weren't out there saying
this is an eight or ten or twelve XROI. We
weren't out there saying we're going to add five percent
to total healthcare spend every year such that we would
have to reduce healthcare spend twenty percent a year. We said,
there's a very important function and role that navigation plays,
and if we price it right and deliver the right

(07:41):
level of services, then we could show a lot of
you know, direct and indirect value. And that's really been
the differentiation with the Right Way navigation platform.

Speaker 1 (07:49):
So you're in that middle ground. I guess what kind
of client did that resonate with most. I mean, did
you have a prototypical.

Speaker 2 (07:56):
You know, it's an interesting question because as we get
to the PBM space, it's been a much different client segmentation.
But you know, I would say somewhere and what's classically
defined as the mid market, you know, call it five
hundred employees to ten thousand employees. You know, they were
sitting there with frustrated members. They were sitting there with
double digit increases in healthcare costs. They were sitting there

(08:19):
with you know, a clunky ecosystem, and they said, we
need to harmonize this. We need to stitch it together
across all of our points solutions, across medical and pharmacy,
across you know, all the in house services, whether it's
on site pharmacy or primary care clinic or any of
the other services that were being administered. And you know,

(08:41):
that was where we could run fast. We didn't really
want to compete in the you know six month RFPs
on the navigation side that you know oftentimes didn't even
result in a winner, you know, resulted in we're going
to punt this, you know, another year or two to
decide if navigation is you know, truly essential. So Yeah,
I would say middle market focus early on, and then

(09:01):
we saw an opportunity to really work with these aggregators
of lives, the TPAs, the PEOs, the you know, tech
trust and you know say that we didn't have to
go one by one. So I think on the navigation side,
the distribution channels were as much a part of the
differentiation and innovation as it was the you know, underlying

(09:21):
product in all cases.

Speaker 1 (09:23):
So are you just maybe just a clarify, are you
saying that going into the consultants and brokers and those
TPAs actually helped you just cast in that wider quicker
for sure?

Speaker 2 (09:32):
You know, we we did not. You know, you could
bid in a seven month RFP for a ten thousand
life group, you know, or you could partner with a
TPA that had thirty two eleven hundred life groups, and
you know, the ability to win, the ability to effectuate change,

(09:52):
the ability to you know, integrate was just much higher
and more successful than you know, kind of the run
of the mill RFP and navigation land.

Speaker 1 (10:02):
Okay, Well, one of the other things you talked about
in your answer there was around the different solutions that
are out there, and you know, we saw this huge
wave of proliferation of point solutions, and so how have
you seen that transform or evolve over the years. What
are people asking for today? Visa the point solution problem?

Speaker 2 (10:22):
Now, you know, we've we've created a monstrosity of point
solutions to no one's benefit. You know, even the companies
that are providing them were seeing low levels of engagement,
low levels of retention, low levels of you know, customer
satisfaction or loyalty. So you know, it hasn't even worked
at the point solution level. I think what employers have
started to realize are like, what are the coren foundational

(10:45):
areas that we really need to dig into and address,
and then let's kind of create an ecosystem around those,
So you know, starting with the pillars of medical and pharmacy.
But you know, then it was the two or three
conditions or comorbidities that they needed to focus on, and
then you know, hopefully wrapping it in navigation to really
synchronize and harmonize it. But you know, it would essentially

(11:07):
be uh, you know, something for MSK, something for mental
and behavioral health coming out of the pandemic, and then
maybe some cardio metabolic you know, service and support on
top of that, and you know they've tried to simplify
and streamline it and then you know, rely on you know,
some of the core carrier and pharmacy benefit infrastructure for
the rest the days of having the you know N

(11:31):
plus one point solution for you know, the left handed
diabetic that's blonde and lives in Florida, you know, has
been absolutely so ultimate.

Speaker 1 (11:42):
How do you see that that that friction work itself out.
Do you think we're going to see a ton of consolidations.
Do you think we're going to see people maybe leave
the space? Do you think, I don't know, maybe the
big health plans start consolidating this themselves.

Speaker 2 (11:55):
You know, I don't think the health plans really have
a lot of appetite to buy some of these point
solutions that don't have real differentiated technology because you know,
they can make the claim that you know, we could
do this in our in house with you know, the
services and support that we have. So you know, I
don't see a mass wave of you know kind of

(12:17):
payer or even provider you know, purchasing of these solutions
because I don't think there's you know, real differentiated technology
at at most of you know, these the point solution levels.
So you know, I don't see that happening. I could see,
you know, an effort like what's going on with I
guess it's Personify Health now where you know, they're trying

(12:37):
to stitch together you know, an entire ecosystem of stuff.

Speaker 1 (12:41):
But you know there's the transparent Accolade.

Speaker 2 (12:44):
Yeah, exactly, transparent Accolade. Just I think that was for
a different reason, you know, which I'm happy to get into.
But yeah, you know, I could see there being some consolidation,
but I think you have to go back to the
core principle of like is this making anyone's healthcare journey
you know, more efficient, more clinically effective, or more you know,

(13:05):
cost optimized. And you know, I don't see a you know,
aggregator of these disparate point solutions being able to create that. So,
you know, I think there's going to be a boneyard
of a lot of these point solutions because the desire
to put incremental capital into them is decaying, and you know,
there's just not that much use or utilization of these tools.

(13:28):
So I think they'll you know, slowly erode, and you know,
I think that will be good for the entirety of
the ecosystem.

Speaker 1 (13:34):
Now that makes sense, maybe switching gears here to the
PBM side. You know, where where was the inflection point
where you said we have to build a PBM Because
as I sit here and I think about that market
and having followed it for a number of years, I
don't you know, I don't know a lot of people
who go to bed at night and say I should
start a PBM tomorrow.

Speaker 2 (13:50):
No, And I would be the first one to admit.
When we had the initial iteration of right way, it
wasn't that we were going to solve the PBM space.
You know, I always knew and had an hypothesis that
care navigation was the right place to start. You know,
if care navigation worked well, it had a very privileged
position within the enterprise ecosystem that you know, essentially operated

(14:11):
as the you know, operating system for you know, everything
else downstream. Right, If care navigation works well, it's a
digital front door and it gets to see every interaction
downstream of that, and it also gets all the data
across all the different, you know, disjointed parts of healthcare.
So it was never the only thing we were going

(14:35):
to do. But the inflection point on PBM was we
started working with these hundreds of employers and millions of members,
and you know, we were super data driven in that,
you know, about a third of our interactions were coming
to us. We're around the pharmacy benefit. And it was
also the fastest growing part of healthcare spend for like
sixty seventy percent of our employers at the time, and

(14:56):
you know, right now it's probably eighty ninety ninety five
percent on the navigation side, just given what's going on
in that space. And we took a step back and
we said, you know, what can we do as a
simple navigation layer on top of a fundamentally misaligned and
broken ecosystem. Every time we tried to help a member,
you know, shop for a drug optimized for lowest net costs,
think about you know, clinical interchange or therapeutic equivalents, there

(15:21):
was essentially no partnership on the PBM side. So we
kept running into a wall. And you know, the more
we unpack that, the more that we recognized that it
was intentional and highly orchestrated from the PBM side to
you know, essentially not have a member experience, to you know,
the recognition that they make more money when higher cost

(15:43):
drugs are dispensed, they make more money when more drugs
are dispensed. And every time we tried to chip away
at that reality to the benefit of the member, you know,
we were met with all sorts of red tape. So
you know, it was really out of necessity to be
able to provide the level of service and value to
our members that you know created the PBM mission. And

(16:06):
you know it's it's kind of taken off beyond belief,
which you know we can unpack a little bit.

Speaker 1 (16:10):
Yeah, why do we do that? What do you have
to build first to just even adjudicate claim?

Speaker 2 (16:15):
Yeah, so, you know, we were fortunate enough to partner
with Thrive Capital, who had some experience building Oscar. You know,
the the daunting nature of we're going to take this
all on at once and you know, build everything, you know,
overnight was unrealistic. So you know, we tried to distill down,
you know, the PBM to its essence and think about,

(16:35):
you know, building it from a first principles perspective of
like what does a PBM actually do? You know, what
are the core functions and foundations of a PBM. Obviously
there is the claims adjudication piece. You have to build
the formulary. You have to do the utilization and management
and just overall clinical management of the drugs. You had

(16:57):
to build a member experience. You had to build a
pharmacy network. You had to you know, contract with with
pharma of whether it be direct or via GPOs. You
had to have client portals. So you know, there was
eight to ten functions of the PBM that we looked
at initially and said, what's our reason for existing? Where
do we want to differentiate, how do we want to

(17:18):
be world class? And it was simple. We looked at
it across kind of two vectors, the first one the
financial part of the equation and the second one the
member experience part of the equation. And on the first one,
the financial side, we said, we have to get rid
of all the games and gimmicks. You know, we can't
have a model that you know is so financially misaligned

(17:38):
that you know, there's nothing to do downstream of that.
So we said we're going to be one hundred percent
passed through. You know, we're not going to retain rebates,
we're not going to spread the network. Most importantly, and
this doesn't get talked about enough. We're not going to
own dispensing assets. That's just a way to you know,
create exclusivity and you know, essentially monopolistic type pricing power
within the ecosystem of I'm only going to send our

(18:00):
drugs to our specialty pharmacy. So we didn't want to
own dispensing assets. We wanted to create a marketplace of competition,
you know. But then we wanted to go a little
bit further and create you know, some accountability with the
recognition that you know, pharmacy benefits had only been about
you know, discounts and rebates and dispensing rates and you

(18:22):
know a spreadsheet of here are the drugs that are
used and then you know what's the rebate that it's
going to generate off of that with no recognition to
the utilization piece. You know, in a price times quantity equation,
all we've talked about is price for decades and that's
done nothing to impact overall net costs. So you know,

(18:42):
we really wanted to innovate around a permember per monk guarantee,
you know, starting to show you that we're going to
manage both sides of the equation. We're going to get
you lowest net cost on the drug side, but we're
also going to manage utilization effectively. So we looked at
the financial piece and said, we could do this different
and create a market place of competition, whether it be
Mark Cuban cost Plus or Amazon pill Pack or Walgreens.

(19:05):
No exclusivity in those channels. But we looked at that
financial side and said necessary, but not sufficient. There have
been other PBMs that have been financially transparent and they
haven't had a lot of success. They haven't done anything
super innovative to really change the kind of nature of
the market. So then we looked at the other side
of the equation, which was, you know, in a p

(19:27):
times que, what is the queue going to look like
in overall drug spend and just overall, you know, what
the experience is going to look like. And you know,
we said we're going to build the first member of CESSPBM.
There's never been a PBM that put the member in
the center of the experience, not the rebate, not the
unit price. And you know, that was consistent with our
DNA and our founding story, which was how we're going

(19:49):
to wrap the member with that pharmacist in the family.
You know, the community pharmacist used to be such an
essential part of healthcare. You'd go into your local pharmacy.
You'd have a conversation with the pharmacist. Hey, I'm having
these side effects? Is there a way to get a
cheaper drug? How long do I have to be on
this drug for? You know, can I get it mail
to my house? That's non existent now in.

Speaker 1 (20:09):
The current And they used to be the most trusted
provider in healthcare.

Speaker 2 (20:13):
All the data says that. So we said, we're going
to bring this community pharmacist back to the forefront of
the healthcare experience, make them accessible digitally, make it elegant,
make it easy to use. And you know, when that happens,
you start to see all the benefits of adherence, of accessibility,
of affordability, and you know, we said we're going to
pair every member with the clinical pharmacist the same way

(20:36):
that you know, I would ask my dad, you know, Dad,
what drug am I on? You know, why does it
cost so much? How do I use it? You know,
when do I use it? What do I need to
eat with it? All the little questions that make prescription
drugs a little bit intimidating, And you know, that's really
where we said we're going to double down was a
member obsessed PBM where you know, as you started to

(20:57):
project that out, you know, in a pee times Q,
we were starting to see massively you know, enhanced experiences
at lower cost, which was ultimately what we showed up
to do.

Speaker 1 (21:09):
That's that's great. I mean there's so much to unpack there,
But the first one that comes to mind is, I
mean the key driver of the cost increases that most
both say employers are seeing is on the specialty side.
So how do you guys approach that, you know, not
owning the channel like others in the space, like the
Big three do, Like how does that? How do you
contract or carve out that piece and who do you

(21:31):
carve it out with?

Speaker 2 (21:32):
Yes, so you know, we have a small network of
specialty providers that we partner with. You know today our
biggest specialty partner is Walgreens and they give us kind
of broad based national coverage and then we have you
know a few specialty uh partners downstream of that. And
you know, we think about it as we don't want

(21:54):
exclusivity in that channel, and if someone comes to market
and has the ability to access these very expensive of drugs,
you know, more cost effectively than you know, a Walgreens could.
Then you know, we're going to create a competitive dynamic
around that, and we've been able to do that, you know,
Mark Cuban cost Plus has been able to do that

(22:14):
across you know, not every drug, but enough to really
make an impact. And you know there's two or three
other partners we're using for uh those efforts. But you know,
let's talk about specialty for a second, because I think
there's been you know, a few examples over the last
you know, twelve to eighteen months that I think are relevant. Humaira,
the best selling drug of all time, comes to biosimilar

(22:35):
last year.

Speaker 1 (22:36):
You know, let's just use around twenty years exactly.

Speaker 2 (22:39):
You know, because and we could talk about some of
the games, but you know, let's just call it a
fifty thousand dollars product, and you know, just to use
round numbers. You know, the biosimilars came on market I
think in July of last year for five thousand dollars,
so you know, a roughly ninety percent reduction and cost.
And you know that's not the exact math, but it's

(23:02):
it's of that order of magnitude a ninety percent reduction,
you know, for the Humyra branded product to the you know,
Humayra biosimilar. And what does right Way do with the
employers that we work with. We wrap our arms around
these members, We educate them, we tell them you know why.
You know, we think that this kind of low whack

(23:24):
formulary is the right one to execute on. And you know,
we're able to take a member who's on a fifty
thousand dollars a year Humyra and transition them to a
five thousand dollars a year U Simmery with no noise,
with you know, no pushback. We're obviously you know, consulting
the doctor, we're consulting the dispensing pharmacy. And you know, members,

(23:44):
when it's done for them and they're educated, they're okay
with it. And you know we did that and you know,
we were saving clients two, three, five, ten million dollars
in some cases. And you know that's how Right Way
approached a bio similar transition. What did one of the
Big three do? They said, Wow, we're going to lose

(24:04):
the rebate here. No one asked us to, but we're
going to go manufacture our own version of the biosimular. Yeah,
add a significant premium to the ten other products that
were on the market. And you know that is their
way of kind of continuing to trap margin and make
sure that the profitability is there for them, and you know,
the benefit isn't there downstream. And forever they got away

(24:28):
with tactics like this. You know, they weren't being pressed.
You know, if they came in and said, hey, fifty
thousand to twenty five thousand verse five thousand, the client
and the consultant may be great. You know, thanks, thanks,
PBM it you job exactly, And like that's been the
games and gimmicks they've played forever. And the truth is is,
we have the same thing with the Stellara biosimilar this year.

(24:50):
You know, the big PBMs were already moving you from
Humayra to Stillara last year to make sure that members
would be on the branded product so they'd continue to
tick the rebate and you know that's just a never
ending game to nowhere. You know, you saw that with
one of the big threes, you know, weight loss announcements,
you know, creating exclusionary type networks and you know who

(25:12):
cares if you're stable and on the product, we're moving
you to the different product all for the sake of
the rebates. So, you know, we keep seeing examples on
the specialty side, but even across the pharmacy benefit where
you know the big PBMs are grasping to their profit pool.
You know they're not doing what's in the best interest
of the member of the planned sponsor, and you know

(25:33):
they're awfully sneaky about it, and they have that ecosystem
capture such that you know they can do it and
not be super transparent about it. And what we've been
able to show, whether it's with Yumayrascalara, what we're doing
on the weight loss side is like these planned sponsors,
they want to partner for the next decade. They want

(25:53):
to partner that every time a new branded drug comes
to biosimilar, you know, there's not going to be a
game or gimmick played. They're not going to have the
you know, do a you know, deep dive to make
sure that their you know, PBM partner is doing the
right and honest and clinically effective thing for their members.
So really what we're trying to position is we're going

(26:15):
to be your partner for the next decade, and you
know that we're not going to make more money when
Humyra is dispensed, when Stillara is dispensed, when a certain
GLP one is dispensed. We're not going to make money
when more of those drugs are dispensed. You're going to
pay us an admin fee to manage your members. That
is the singular and only way that right way makes money.
And you know you're then going to know at every

(26:37):
step of this double digit and compounding increase in cost
on the pharmacy benefit side that you at least have
a partner that's working in your best in fiduciarily aligned interests.

Speaker 1 (26:47):
So on that admin fee. Is that just based on
the number of members or maybe the complexity of the
population as well. Is that as some mix of the
boat both of those things.

Speaker 2 (26:54):
Yeah, it's a it's a simple admin fee, you know.
It's it's based on size. It kind of scale. You know,
a three thousand life group may look a little bit
different than a thirty thousand versus two hundred thousand life group,
but you know it's take your number of members times
our admin fee equals our revenue. That's the singular and only,

(27:15):
you know, source of revenue at right way, and we
want to keep it that way, you know, and if
we're going to add a GLP one weight loss program,
maybe you'll pay us a little bit more for that, right,
I mean, if you have Slack or you have Salesforce,
or you have Bloomberg, you know, as features are rolled out,
like as long as it's transparent, as long as its
value add, as long as it's an ROI. Yeah, you know,

(27:39):
attach those on. But you know, don't have money coming
from fifteen different revenue streams and you know, not disclose
any of it. Like that's not what the initial intent
of the Pharmacy Benefit Manager was supposed to be.

Speaker 1 (27:53):
Well, how do you guys keep yourself from being painted
with that brush? Right? I mean you see you see
the headlines in the in the papers, all the middleman comments,
and there's a lot of I think saber rattling in
Washington these days. You know, how do you and maybe
this is maybe even a lesson for when you try
and differentiate yourselves for your first time you're going in
for an RFP with somebody, How do you guys actually

(28:15):
focus on that differentiation?

Speaker 2 (28:17):
Yeah, so you know the role of the PBM is
is essential. You have drug manufacturers, you have retail pharmacies,
you have specialty pharmacies, you have mail order pharmacies, you
have planned sponsors, you have this disconnected maze of stakeholders
that you know need a foundational interconnectedness to make sure

(28:41):
that people are getting the drugs that they need, when
they need them, how they need them, and you know,
orchestrating this complex ecosystem. So it's undeniable that the role
of the you know, middleman, let's not even label them
a PBM yet is essential. Like there is, you know,
no other way to orchestrate these disjointed pieces, similar to

(29:04):
what a third party administrator would do on the medical side.
So you know, I think we've at least established that,
like you know, this service is not going away. It
may come by a different name, it may you know,
be able to do different services, and you know, some
of that will get litigated out, some of that legislatively

(29:24):
will change, but like we need this function. You know,
whether you call us a PBM or not, I don't care.
You know, I think the PBM you know kind of
terminology has been you know, so tainted, rightfully so because honestly,
the PBM space historically has you know, been worse than
some criminal enterprises, like they are stealing money from employers.

(29:47):
They are stealing money, you know, from employees and the
you know, the byproduct and outcomes of that or really unfortunate.
It's people not getting the care, the life changing medications
they need, and like that has to stop. So, you know,
when we go into an RFP or an opportunity like
we try and you know, educate on what we're doing differently,

(30:10):
and you know how we're solving some of this, you know, misalignment,
some of this you know, opaque operating structure. And you know,
I was on a webinar with Congressman ackin Claus, who
I think put it really well. It's this you know
VENN diagram right now of competition of litigation and legislation
that's kind of changing the industry and you know, forcing

(30:31):
planned sponsors to really examine, you know, what's going on
at that intersection. And I think across those three buckets,
you know, right way is best positioned, and we're starting
to prove that every day now.

Speaker 1 (30:43):
So you know, one of the things that always surprised
me is that I always think of the buyers as
being the planning plan sponsors or the you know, the
benefits folks at the employer as being extremely sophisticated. Has
it surprised you, you know how what'll sometimes folks know
about how they're actually contracting with those legacy PBMs. And
have you seen actually a change in that sophistication over

(31:05):
the last five years?

Speaker 2 (31:07):
You know, it's a great question, and I'll be honest,
the pharmacy benefit by design has become so complicated that
the expectation that anyone understands it that isn't there, you know,
singular day job is unrealistic. And that's because they've created

(31:28):
a price I mean, the terminology, the AWP and what like.
It's just it's a foreign language, you know, to most people.
And you know, why are we talking about a gross
cost and then a rebate and then a net cost?
Like why aren't we just talking about how much you
buy it for relative to how much you you know,
dispense it at. But you know that's not what the

(31:50):
ecosystem has created. And that's been by design. And you know,
I think the big PBMs have tried to create a
you know, per ed marketplace where it's like this is
too complicated to understand. I will just you know, stay
with the big guy. You know, there's probably no downside
to that, and you know they've done that by design,

(32:13):
and you know, the consultants, you know, there haven't been
a lot of good alternatives. And the truth is is
they oftentime align themselves with the big PBMs, also in
the forms of coalitions and you know, other operating structures.
So you know, the average benefits person, it would be
wildly unfair to say that they need to be a
pharmacy benefits expert. Now, what we have seen is they've

(32:36):
dug into some core and unwavering principles that they're willing
to stick by. Like is this transparent? Is the PBM
acting as a fiduciary? Is the PBM, you know, providing
me claims level detail? Is the PBM taking care of
our members? When I read about, you know, a litigation
announcement in the newspaper, like am I protected against that?

(33:00):
You know, biosimilars are starting to become more well known,
this notion of delinking you know, price from profitability from PBM.
So I think what the buyer is saying is like
I am never going to understand the core pricing mechanisms,
And the truth is is the consultants do a pretty
good job of making that equally complex. So you know,
they're picking these ten values as it relates to the PBM,

(33:23):
and you know they are partnering with the consultant to say, like,
does the PBM have these ten components? You know, is
there a per member per month guarantee? Is their fiduciary alignment?
Is there a transparent contract? And the truth is is
I think it's so refreshing as more employers have started
to work with right way where you know, some of
the stuff that's happened historically by design is just non existent.

(33:47):
You know, we had a big, you know, one hundred
thousand life company come to us and you know, we're
just finished contracting and they said, this was the easiest
contracting process we've ever had in healthcare, in particularly on
the PBM side, where we would have six twelve eighteen
month fights around you know, definitions and you know, full

(34:07):
funds audit rights and you know, we got nothing to hide, right,
we make money one way, we want to provide full
auditibility down to the claims level. You know, then it's
just a standard contract beyond that and you know, I
think it's so refreshing to see the pendulum swing back
to like simplicity and transparency within the pharmacy benefit. So yeah,

(34:28):
you know, to answer your question more succinctly, it's unfair
to expect every benefits person to be an expert on
the PBM side. I think as pharmacy benefits spend goes
from thirty percent of total healthcare spend to fifty percent
of total healthcare spend, which is going to happen, they'll
probably have to dig in more the same way they
did on the medical side. But you know, it's it's

(34:50):
a tall task, and you know, outside of a handful
of experts out there, there's very few people who actually
understand how a PBM works. So it's unrealistic to say, yeah,
tens of thousands of benefits managers who have you know,
twenty other jobs as well are going to be experts
on this too.

Speaker 1 (35:07):
Well said, you know, if I wanted to go back
to that ven diagram, you know, when you think about
those different pieces, do you have a view around either
the regulatory piece or the legislative peach, which one of
those has probably the most impact over the next five
to ten years.

Speaker 2 (35:20):
Maybe it's a great question, and I think they're all
grinding in unison right now. I mean, I'll be the
first one to admit I mean I am skeptical on
anything Washington does. And you know, I think they've done
a good job of creating noise around this notion of
d linkage and you know, paying pharmacies fairly to make
sure that they can at least exist. But you know,

(35:41):
they'll start with government programs and it'll take a decade
before it works downstream to the enterprise market in terms
of implementation. But you know, you see what if it's
not at the federal level, at the state level, like
in Arkansas, you know, saying that PBMs can't own dispensing
assets in our state, that's a big and it's getting
every employer in Arkansas to say, hey, does my PBM

(36:03):
own dispensing assets in our state? And can we continue
to work with them? Or you know, what's the outcome
can be. So I think legislation is important. I think
we'll chip away at some stuff. But you know, this
is just a personal opinion. I think it'll end up,
you know, being too late in terms of their ability
to effectuate the sort of change that we need on

(36:24):
the litigation side. You know, this is an interesting one
because you know, I think it's started with Johnson Johnson
and then Wells Fargo, and you know, there have been
a few sins going back to that benefits decision maker.
You know, the old adage of you don't get fired
for being with IBM has always been a consistent theme
within the PBM decision making process. You know, there's three

(36:44):
big players that process ninety percent of scripts. You know,
I probably won't get fired if I'm with one of them.
There probably won't be you know, noise where I'm going
to be the culprit of that decision because you know
what's the difference. There's only three of them, and they're
you know, a different vector of decisions. So I think

(37:04):
what that's kind of done is this conservatism of well,
we'll just renew, we'll just kick the can. You know,
we're not really going to understand this at its core essence.
That's that's decayed a little bit because you know, you
can't just make that decision because your CEO or CFO
is you know, starting to.

Speaker 1 (37:25):
Chip away see in the headlines totally.

Speaker 2 (37:27):
And you know, one of the best things if there's
a fourth bucket here. You know, the Mark Cuban effect
in pharmacy benefits has been real, not because Mark Cuban
cost plus drugs is you know, so transformational to the
actual ecosystem that you know, it's changed the cost structure
of drugs, but he has the awareness and the respect,
rightfully so of every CEO, CFO, you know, c level

(37:50):
exec in this country. And he's been going on about
PBM stealing and being criminal and not doing the right thing.
And you know, it's been the best kind of macro
level advertising strategy that you know, any new PBM could
hope for because it starts to expose the injustices of
you know, the industry and how it's been orchestrated historically.

(38:12):
But you know, going back to this litigation piece, like
I think it's taking some of the conservatism out of
the benefits decision to say, hey, maybe by just renewing,
we don't protect ourselves against you know, this risk, so
we could try something new. And you know, sometimes you
need a little bit of courage to try something new,
and I think the litigation piece has kind of helped

(38:33):
with that courage. And then you know that third one,
which you know, I'll just make the case for the
competition side. It's like historically there was no good alternative
on the PBM side, Like you had a bunch of
you know, you had the big three PBMs, and then
you had transparent PBMs, and they weren't doing anything terribly innovative.
They weren't doing anything you know, terribly you know, kind

(38:57):
of worthwhile. So it was just in a of do
you want the best unit pricing or do you want
worse unit pricing but at least to get you know,
some audit rights, and you know, across that decision plane,
like the desire to go with a transparent PBM, the
it's just it's limited, it's it's non you know, it's

(39:20):
it's it's not as persuasive or compelling as we needed it.
And I think what right way has been able to
do is you know, introduce a compelling alternative that you know,
now not only hits across all the financial aspects of it,
but also hits across a lot of the other areas
that these benefits managers have you know, tried to zero
in on. So you know, that's that's where I think

(39:43):
we'll that's the gear that I think will grind the
hardest here as we think about that ben diagram. But
certainly the litigation and the legislation helps. It's just always
hard to know, you know, how long those will take
versus you know, you know, the free market, the competitive market,
you know, doesn't wait for anyone.

Speaker 1 (40:01):
Well, yeah, and we've seen on the legislative front, you know,
the pushback on rebates and you know now they're not rebates,
they're GPO fees. I mean, the industry has been able
to stay, yeah, a little one step ahead.

Speaker 2 (40:12):
If you look at the gross profit pool for PBMs,
you know, historically it was all within the rebate bucket.
Now it's all within the specialty buckets, so you know,
and the GPO buckets. So you know, they're one step
ahead of Congress in moving that perceived profitability into other buckets.
That's going to take Congress in another five years to actually
figure out the flow of funds, and you know, again

(40:34):
we'll be too late.

Speaker 1 (40:35):
You know. One of the things you just said was
around you know, these high growth categories, and I guess
every benefits manager that I've talked with is always asking
about GLP one. So maybe what's what's the right way
solution for GLP one costs and utilization.

Speaker 2 (40:49):
No, it's it's look, it's a great question, and you know,
ultimately we want to administer the plan that the planned
sponsor wants to administer. So if they want to cover
them with no clinical criteria, we can be supportive of
that and administer them. If they don't want to cover
them and you know, want to make sure that there's

(41:12):
you know, full compliance with that, we could administer that plan.
So you know, ultimately we are a you know, we're
an execution layer for the plant sponsor to deliver all
the want totally. Now, you know, I think if you
asked our clinical team and our P and T team
and our chief medical officer, there's a real recognition that

(41:33):
these drugs are are life changing, life altering and in
a lot of good ways. Now, you know they need
to be used, right, they have side effects and you
know they're not fool proof, but you know, there's a
lot of clinical value to these drugs. And you know,
we believe as well that the cost of these is
going to come down over time. You know, you saw
it with statins thirty years ago, and you know you're

(41:55):
already starting to see it today with some of the
direct contracting, so you know, the fifteen eighteen, twenty thousand
dollars a year is going to be a lot less
than that over time. So you know, we're really dealing
with a short window of like, how do we support
the plant sponsors that want to cover these drugs at
the cutting edge and you know, make sure that there's

(42:17):
appreciation and value within these, you know, efforts. So you know,
if you're covering GLP ones for weight loss as a
plan sponsor, you're going you're not hoping to see a
reduction in overall pharmacy spend, right, these are increasing pharmacy
spend for some plant sponsors twenty thirty forty dollars per
member per month, you know, So if you're making that

(42:40):
decision to spend millions of dollars on this drug category,
you want to know that members are using them correctly.
You want to know that you know you're seeing the
intended weight loss. You want to know that you know
there's not crippling side effects for members to the point
where they can't come to work. You want to know
that they're not just doing it for their wedding in
two weeks, that they're doing it sustained painably, you know,

(43:01):
and for the right clinical reasons. So you know, we
have built programming to really support you know, some of
the efforts I just mentioned, as well as others to
make sure that you know, there's not only the perceived benefit,
but there's the quantifiable benefit for this massive investment that's
going on right now. And you know, I think it's
going to be a short window where the relative investment

(43:24):
is going to be of this magnitude. But you know,
they're company spending fifty one hundred, one hundred and fifty million
dollars on these drugs, and they're sitting there saying, I
don't know, I'm not seeing the you know, corresponding decrease
in medical costs. I'm certainly not seeing you know, my
overall per member per month spend on the pharmacy costs
come down. So you know, how should I evaluate these

(43:46):
What should be the leading indicators such that I know
these are working other than you know, maybe it's the
right thing to do. But you know, this notion of
the right thing to do isn't sustainable, you know, for
these companies that you know, no matter how big you are,
how profitable, adding one hundred million dollars of you know,
let's try this. You know, experimentation on the you know,

(44:08):
drug side is unrealistic. So you know, we're building clinical programs,
we are supporting our plan sponsors. We are trying to
work with the drug manufacturers to get the lowest net
cost for these drugs to get rid of the rebate.
You know, just have a net cost, be able to
carve them out with a direct contract, and you know,
trying to change the you know narrative from you know

(44:32):
PBMs that are just trying to you know, dispense these
to grab the rebate and you know, don't care about
anything else to you know, what are the clinical standards
and the metrics that we want to see to you know,
know and appreciate these are working from a leading indicator perspective.
I mean we see going back to my we cover
them or we help plant sponsors cover them when they

(44:55):
want to and when they don't. You know, when we
take over from a big PBM, you know, they'll say, oh,
I don't think we're covering these for weight loss, and
we'll dig into the data and you know, seven percent
of their population will have only raised their hand or
told some doctor virtually that they're pre diabetic or diabetic
and they'll get the script for JILP once. Not that

(45:18):
there's anything wrong with that clinically, but you know, if
the plan sponsor doesn't think they're covering them, then they
should have a PBM that you know, is doing more
to make sure that the plan is administered appropriately. So
there's all sorts of non sense that takes totally.

Speaker 1 (45:34):
So we've been spending a lot of time on the
industry and I think the landscape, but maybe to focus
on the business a little bit more. What can you
share in terms of KPIs, in terms of your size,
whether it's revenues or members, you know, whatever you're comfortable
with sharing, maybe just to anchor a little bit of
the discussion.

Speaker 2 (45:49):
You know, you know, across the right way. Now we're
probably working with about thirty five hundred employers. We're working
with the cross navigation in PBM a bit over three
and a half million members. You know, we don't typically
share revenue numbers, but you know, we've grown greater than

(46:11):
one hundred percent over the last three years and you know,
really excited about the progress there, and you know, I
think we're on our way to building a category defining
healthcare company both across you know, the financial metrics, but
you know, more importantly the you know, operational and clinical metrics.

Speaker 1 (46:30):
So if we think about a strategic plan for the
next couple of years, what are your personal priorities.

Speaker 2 (46:34):
Yeah, so I would look at it across kind of
two dimensions, you know, on the PBM side, like I
want to be the clear end of one alternative to
the big three PBMs. If you are sitting there and
you are saying I am leaving my PBM for X,
Y and Z, reason, you know, right Way is you know, hopefully,
and you know, I think we've done a good job

(46:55):
of this. Just you know, given our client lists and results,
we are the clear end of one alternative. We provide
the you know, clear value prop to anyone saying I'm
tired of what's going on on the PBM side, or
I love what's going on with the Right Way, and
we want to be a part of that. So you know,
that's that's a big focus right now, and I think

(47:17):
we're executing on that at an incredible level. And you
know it's continuing to be validated by you know, not
only lots of fortune hundred wins. But you know, even
downstream of that, you know, the seven thousand member group
is just as important as the seventy thousand, and you know,
it's kind of chipping away at an industry oligopoly. So

(47:39):
you know that end of one alternative to the big
three PBMs is you know, a short term obsession and
then you know longer term. You know, we talked about
care navigation in the beginning, and now PBM like, how
can we be that operating system for the enterprise and
eventually other channels and harmonized medical inpharmacy and do it

(48:00):
in a way that you know, I think was an
initial intent when you know these big threes either bought
health plans or PBMs and vice versa. You know, that
longitudinal management of being able to support medical with good
navigation like we were talking about initially, and support pharmacy
by actually being the PBM, and you know, start to

(48:21):
think about how we wrap our arms around you know,
ninety five percent plus of total health care spend and
do it in a way where you know, we control
the experience and the infrastructure, and can you know, start
to think about other arrangements, whether it be value based arrangements, sure,
you know, or just creating kind of sustainability and predictability

(48:41):
with the employer clients. So you know, I see what
is now maybe more parallel navigation and pharmacy benefit platforms,
you know, intersecting and eventually converging, you know, over the
next three to five years. The reason that it doesn't
happen more is the distribution channels are rigid. You know,
if you're doing a PBM RP, you are only doing
a PB MRP. You're not thinking about navigation layer. Now,

(49:05):
what we have seen is when we're working with a
PBM client and they know us, they love us, they
trust us. Hey, what more can you do for us? Oh,
you can help us with medical You know, we haven't
had a lot of success around our you know, navigation platform.
Let's go merge the two. And you know that's where
more than anything, we're starting to see higher levels of engagement,
higher amounts of cost savings, higher member satisfaction. And you

(49:28):
know that's validating that you know, these two intersecting or
value more valuable than you know, any of them on
their own.

Speaker 1 (49:37):
It leads me the things you have to do. Anything
from an investment perspective, to get there. I mean, I
think the last time you raise capital was a number
of years ago.

Speaker 2 (49:43):
Yeah, it's a good question. I mean we've become obviously
pretty capital efficient and you know, we're we're super proud
of that. But you know, look, we're we're continuing to
spend a ton of money on R and D and
you know what's going on in the AI landscape, and
you know, we are working hard to make sure that

(50:03):
our platform you know, reflects the desires of our client communities. So,
you know, from a capital perspective, like, no immediate plans,
but you know, I think over the next twelve months,
it's not unreasonable that you know, we would consider, you know,
doing something there. But you know, hopefully obviously there's some

(50:26):
inspiration this week and next week with some you know,
great companies going out to IPO, and you know, we
think we're not far behind from that perspective.

Speaker 1 (50:34):
That's great, you know, it's amazing. I think we've made
it worth of forty five minutes without mentioning aiyeh, which
is very rare in these discussions. So maybe just spend
a minute, you know, if you think about an AI
wave way or over top of your your company yeah,
you know, where's it going to be, where's it going
to be most impactful? And I guess maybe more broadly,
i'd love to get your view of you know, if
you think about the healthcare system at large, like how

(50:56):
how much of a game changer do you think AI
is going to be?

Speaker 2 (50:58):
Yeah, no, it's It's obviously the thing we talk about
the most right now. Look, I think where AI is
going to be most valuable in the short intermediate term
is on the internal facing operational improvement side. You know,
let's just take one of our pharmacists for example, if
they can do eleven tickets today with great AI, you know,

(51:21):
maybe they're doing twenty tickets in twelve months and thirty
tickets in twenty four months. I think the risk of
member rejection from AI that's ninety percent of the way there,
but not one hundred percent of the way there is
too high to you know, roll out too early. So

(51:42):
you know, I think similar to what you saw with
self driving cars, and you know you're seeing it with
Weimo now, like the Weimo and Tesla technology availability was
there a decade ago, you know, and the data probably
indicated that it was safer, and you know, we should
have rolled it out into cities, but you know, I
think members were hesitant then you know, for all sorts

(52:03):
of reasons, it got delayed. I think, you know, my
gut is is from a member facing perspective that going
to see an AI doctor or you know, care coordination
via AI or you know, some of the higher stakes
parts of healthcare will probably take a little bit longer
than we all think. But you know, I love to
see our clinical pharmacists and licensed clinical social workers and

(52:26):
nurses you know, be able to support more members with
next best actions with you know, all the alerts and
bells and whistles that they need. So you know, that's
that's my short term you know focus. But look, I
think it's going to be a transformational change. And you know,
I think the way that we do everything, not only healthcare,

(52:47):
is going to look materially different over the you know,
next five to ten years. So you know, we're we're
gearing up for that. We're making you know, big investments
and dedicated teams you know, focused on you know, hopefully
being right on a lot of these efforts, and you know,
also being equally innovative. So you know, more to come,
but we will we will continue to UH, you know,

(53:09):
stay close and invest in the features that we think
are going to make a difference for our members.

Speaker 1 (53:13):
Excellent. You know, one of the ways I like to
wrap up these conversations is to kind of talk about
a life lesson with the guest, is there something Jordan,
from your personal life or your professional life that really
guides your mission day to day.

Speaker 2 (53:23):
Yeah, it's it's a great question, and you know, I'd
want the proper time to think about it, but you
know I would say I would say one on kind
of the operating side, and you know, one on the
personal side. And you know this would probably be validated
by lots of people at at right way. But you know,
this notion of how you do anything is how you

(53:43):
do everything, you know is UH is something I believe in.
You know, the details matter, the little the little things matter,
you know, and it definitely, you know, creates tension within
a work environment because you know, when everything matters, you know,
that's a tough place to be. But you know, everything
matters for our members, and you know, taking care of them,

(54:07):
you know, is something that you know I take with
you know, zero error type approach. So you know, I
think that one to me is is something that you know,
I really try and instill and hopefully we get right
within right way. And then you know, I think on

(54:27):
the you know, more personal and even philosophical side, if
I'm going to stick with quotes, you know, the one
that I love and you know, even feel so fortunate
waking up every day getting to do what we do
is you know, I think it was a Jim Harbaugh
quote of attack, attack this day with an enthusiasm unknown
to mankind, which you know, it's just like a notion

(54:47):
of gratitude, a notion of like, you know, this opportunity
we have, and particularly you know, even from a right
way today perspective or seven or eight years ago, it's like,
you know, how lucky are we to have this opport tunity?
You know, go try and change healthcare, build something category defining,
do something different that you know, if you can't get
excited to kind of get out of bed and go

(55:09):
to work in the morning, then you know, what are
we doing here? So you know, I try and bring
that sort of you know, mentality to work, and you
know it's not every day, but you know, it's certainly
a notion of kind of gratitude appreciation that you know,
I try and think about an approach every day with well.

Speaker 1 (55:27):
Thank you so much for sharing that, Jordan, and thanks
for coming in today to talk to us and educate
us about the latest going ons in the landscape.

Speaker 2 (55:35):
Yeah, I appreciate John, Thank you.

Speaker 1 (55:37):
And thanks everybody for listening, and thank you for joining
us for our latest episode. Please make sure to click
the follow button on your podcast app or website so
you never miss a future discussion with the leaders in
healthcare innovation. I'm Jonathan Palmer, and you've been listening to
the Vanguards of Healthcare podcast by Bloomberg Intelligence. Until next time,
take caress and uses us and

Speaker 2 (56:25):
Bases