Health tech company Kalderos launches solution to help safety net providers navigate 340B program

Health tech company Kalderos continues to innovate its drug discount management platform and developed a new tool to help safety net providers navigate the 340B program.

Launched in 2016, Kalderos is a data infrastructure and analytics company using technology to help eliminate waste and improve efficiency in drug discount management. The company works with healthcare providers, drug manufacturers, payers and government agencies. Its drug discount management platform has now processed more than 1 million claims for approximately 4,200 covered entity providers, or safety net providers, according to the company.

Kalderos developed new software called Discount Hub that enables safety net providers to more easily communicate with drug manufacturers to ensure that "good faith inquiries" are resolved more effectively and efficiently. The technology provides more transparency and visibility into the system and enables stakeholders to more efficiently communicate and collaborate on drug discount claims.

Good faith inquiries happen when a covered entity needs to work with a drug manufacturer to resolve a potentially noncompliant 340B drug discount claim. By giving providers a simplified process to review their 340B claims, the Discount Hub solution facilitates open and transparent communication with drug manufacturers and comes with tech support teams that ensure good faith inquiries are handled efficiently, according to the company.

Compliance with drug discount programs, such as the Medicaid Drug Rebate Program or 340B, has long been an opaque and complex process. The startup uses artificial intelligence to analyze hospital, state and discount drug claims to make sure they’re compliant and are not duplicating federal drug discount claims.

By using machine learning processes, Kalderos' drug discount management platform checks, identifies and resolves noncompliance issues and can detect inconsistencies overlooked by existing methods, according to Kalderos co-founder Jeremy Docken in a previous interview.

"Kalderos is focused on identifying the best ways to leverage technology to assist with more efficient and effective collaboration between payers,  providers, and kind of broadly what we think of as innovators," said Micah Litow, president of Kalderos, in an interview.

The company sees an opportunity to use its technology platform to fix some of the 340B drug pricing disputes.

In exchange for participating in Medicaid, a drug manufacturer is required to offer discounts to safety net hospitals that participate in 340B. But the program has been beset with controversy in recent years as drug companies claim the program has gotten too large and patients aren’t benefiting from the discounts.

Disputes between drug manufacturers, pharmacy benefit managers, contract pharmacies and 340B-eligible providers have even led to Congress stepping in and demanding solutions.

The desire to avoid duplicate discounts is behind a growing movement among several drugmakers to restrict sales of 340B drugs to contract pharmacies, which are third-party entities that dispense drugs for the 340B entities.

The Department of Health and Human Services finalized a long-awaited rule that sets up a process to resolve disputes surrounding the controversial 340B drug discount program.

While regulators and Congress are pulling different levers to address drug pricing practices, companies in the private sector like Kalderos also are trying to tackle the problem using technology.

The company said it has reviewed more than 850,000 discount requests. And, over the past year, Kalderos has identified approximately $640 million in noncompliant drug discounts.

Kalderos developed the new Discount Hub solution based on direct feedback from many users employing the platform at dozens of provider organizations, executives said.

More providers are jumping on board with Kalderos' platform driven by the promise of greater efficiency and transparency between all participants in the 340B program.

Kalderos' new solution replaces the previous "review tool" functionality to provide one centralized communication platform to help stakeholders reach resolutions on good faith inquiries. Providers can also access a new impact summary feature that produces reports detailing how much systemic noncompliance has been identified by each user, according to the company.
"Kalderos is working to bring business collaboration tools that exist in other industries to this space so stakeholders can work in one centralized data repository," Litow said. "The Discount Hub is really the next iteration that we brought to market as our provider-facing tools that is based on feedback from providers around some of the additional things that they wanted to see such as the impact summary that helps them gain a better understanding of where there may be breakdowns in the system."

Litow said providers will benefit from a new level of service and an enhanced user experience. These enhanced product offerings allow covered entities to spend less time responding to individual manufacturers’ inquiries and more time delivering quality care to patients, he said.

"Healthcare is trying to balance affordability, accessibility and innovation. For the system to work, you need all of the relevant parties working together. When it comes to programs like the 340B drug discount program or the Medicaid drug rebate program, the providers play an incredibly important role in taking care of those patients and making sure they have accessibility. The drug manufacturers play an incredibly important role in making sure that therapeutics are available to prescribe treatments to those patients. We're focused on helping those parties collaborate in the interest of better patient outcomes," Litow said.

Kalderos is seeing strong demand for its technology offerings. As the company expands its footprint in healthcare, it is on track to double its revenue in 2022. And, provider engagement on Kalderos’ platform has grown 20 times since 2018.