Former OptumRx CEO launches drug pricing startup with GV-led $35M round

For years, drug prices have been on the rise, leaving as many as 18 million Americans struggling to pay for necessary prescriptions.

A drug pricing provision of the Build Back Better Act, which passed in the House of Representatives last year but stalled in the Senate, would cap certain price hikes and allow Medicare to negotiate lower prices for some drugs.

But Mark Thierer, former CEO of pharmacy benefit manager OptumRx, thinks the industry needs to take a different approach.

"The notion of overlaying a set of government programs to mandate price controls, in my own belief, is a failed enterprise," he told Fierce Healthcare. "The market will take care of itself if you align interests around patients and price."

With Waltz Health, Thierer set out to realign those interests using technology. The startup launched this week with $35.4 million in series A funding led by GV (formerly Google Ventures). 

The company, which Thierer co-founded with his son Jonathon Thierer, is developing software to intervene at each step in the pharmaceutical supply chain to create the incentives necessary for lower drug prices.

Waltz’s first product, Marketplace Search, is a white-labeled search tool that gives pharmacy customers the lowest cost available for each prescription by leveraging all Rx drug savings programs.

Instead of offering the solution directly to consumers in the style of GoodRx, Waltz will install its tool inside the pharmacy itself "to give the largest retailers the power to bring their customers back," Thierer said.

It's not rocket science, Thierer noted. Instead, he believes other companies have failed because they lacked the depth of insider knowledge and industry connections of which, having spent nearly three decades in the space, Thierer has plenty.

Thierer served as the chairman and CEO at Catamaran, which became OptumRx after it was acquired by UnitedHealth Group in 2015 for $12.8 billion. Last year the country's three largest PBMs, OptumRx, CVS Caremark and Express Scripts, controlled about 80% of the prescription market.

"I cannot overemphasize the importance of the 'whom', of picking up the phone and, through the trust and track record you've built, getting them to listen," Thierer said. "If you want to rewire the system, you have to know where the cables are."

In fact, Thierer says he doesn't think of Waltz as a startup at all. With a team boasting collectively hundreds of years working with pharmacies, PBMs, health plans and more, and no shortage of available capital, Waltz is "sold out" on meetings, Thierer said. 

Growth, then, is simply a matter of "how fast we can chop wood," he added. The $35 million in series A funding will support Waltz’s investments in product development and hiring so the startup can scale quickly.

The round included participation by Define Ventures, Echo Health Ventures, Blue Venture Fund, Byers Capital and Twine Ventures.

While Marketplace Search isn't live yet, Waltz plans to announce partnerships with several major pharmacy chains in the coming months, Thierer said.

After that, the company plans to partner with health plans to embed Marketplace Search into existing payer tools to drive member engagement.

Plus, by the end of the year, Waltz hopes to launch a specialty medication management solution to target healthcare's costliest drugs, which can rack up thousands of dollars each month.

"We're setting out to reduce the cost of pharmaceutical drugs for every American, with a platform that's infinitely scalable," Thierer said.