Why startup PBM Capital Rx wants to break the industry's 'roulette wheel of pricing'

When Capital Rx launched its "clearinghouse" model in 2019, it aimed to cut out the "roulette wheel of pricing" that some patients can face at the pharmacy counter.

CEO A.J. Loiacono told Fierce Healthcare in an interview that the goal is to inject some much-needed transparency into the black box that is pharmacy benefit management pricing models.

"The reason why we observe this artificial volatility is because middlemen players, unfortunately, are changing the price for profitability reasons," he said. "It's a game of winners and losers."

"You show up at the register and are you today's big winner or, unfortunately, the loser?"

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The PBM startup's model is based on National Average Drug Acquisition Cost (NADAC) pricing rather than more traditional average wholesale price. Capital Rx also avoids spread pricing, a controversial practice in which a PBM charges a health plan notably more than a drug cost at the pharmacy, and then keeps the difference.

Capital Rx's approach is resonating in the market, and it's the fastest-growing PBM in the country. It's also secured partnerships with big names like Walmart and closed a $50 million funding round in February.

Here's more from our conversation: