Amid an ongoing conversation about pharmacy benefit managers and the role they play in rising drug costs, a Fortune 100 company is making the jump from one of the industry's biggest players to a startup.
Tyson Foods will be one of the first major companies to drop one of the so-called "big three" of the PBM industry by moving on from its long-term contract with CVS Health's Caremark to sign on with Rightway, a startup that was founded in 2017.
The new contract went into effect on Jan. 1.
Tyson has about 140,000 employees. In an interview with CNBC, Renu Chhabra, the company's vice president and head of global benefits, said that it began considering alternative options as it struggled to get key data on rising drug costs, especially for specialty products.
“Part of this was to really get a partner who can help us organize the information, make sure we understand how to manage specialty, and really looking at how to get the best net cost," she said.
Rightway is built on transparency as well as providing an enhanced member experience, CEO and co-founder Jordan Feldman told Fierce Healthcare.
He said that the focus on the patient experience is likely what differentiated Rightway during the bid process for the contract.
"The legacy PBM experience is fundamentally broken. There is no focus on the underlying member," he said. "In a universe where employers are looking to get their pharmacy spend under control, they can no longer just look at the price of the pill and the unit costs and the rebate generated, they need to look at the utilization and clinical efficacy and support that the members are getting."
Rightway's PBM model charges a per member per month fee to cover its services. Through this approach, the company can offer its clients drugs at cost.
Feldman said that Rightway also pairs each member with a pharmacist who can assist in answering questions, explaining how their medications work and advocating on their behalf if needed. This level of personalization is key to improving the member experience, he said.
PBMs, and particularly the industry-leading firms Caremark, Express Scripts and Optum, have been increasingly under the microscope as the feds examine the causes behind rising drug costs in the U.S. In that reform discussion, much of the conversation has focused on transparency.
Tyson is far from the only employer to say they've run into trouble securing key data from their PBM on what their drug spending looks like.
Insurers have also weighed a shift in their contracting models. Blue Shield of California moved on from a bundled contract with Caremark to a new model that leans on several different companies to provide different elements of the PBM experience. Caremark's specialty pharmacy services are a part of that approach, alongside offerings from Amazon, Mark Cuban Cost Plus Drugs and others.
Feldman said the industry has reached an "inflection point" where the major players are thinking about a new experience.
"People have had it with a system that only accretes profits and outcomes to a handful of large, vertically integrated insurance companies," he said. "So, we believe that on this arc of innovation, and adoption of alternatives we're in a really exciting place."