Nearly one quarter of all healthcare expenditures in the U.S. are considered “waste,” and contributing to this, much of the healthcare industry is reliant on decades old technology to manage pharmacy benefits. Informed by his own experience in the PBM industry and driven to create solutions, Rick Bates founded RxSense in 2015 with a vision to disrupt the pharmacy benefits ecosystem, ultimately improving healthcare outcomes.
The founder and CEO of RxSense joined CIO Look for an interview to talk about opportunities in the PBM industry and how his high-growth healthcare technology company is delivering enterprise solutions to reinvent how businesses manage pharmacy benefits.
Below are the highlights of the interview:
Brief our audience about your journey as a business leader until your current position at RxSense. What challenges did you have to overcome to reach where you are today?
I spent much of my career at large, publicly traded healthcare companies focused on revitalizing business divisions or underperforming assets and turning them into growth engines. This included reinventing value propositions and positioning our services as unique solutions in the marketplace. Those experiences helped me identify market weaknesses and opportunities to build solutions that competitors didn’t offer. After we sold Catalyst Health Solutions, it put me in a position where I could identify business opportunities in the marketplace. This enabled me to understand what I wanted to build when I founded RxSense.
Tell us something more about RxSense, its mission and vision.
Our business is focused on delivering industry-leading solutions for pharmacy benefits and prescription cost savings. RxSense is a disruptive innovator in its space – our cutting-edge cloud-based enterprise platform empowers organizations with the technology to take control of their own pharmacy benefits, ultimately bringing greater transparency, operational efficiency and financial value to our clients. The RxSense mission is to be the best product manufacturer in the PBM ecosystem, delivering automated technology solutions for pharmacy benefits. We are simplifying this industry and building the tools that will result in lower costs and better health outcomes.
Our vision is to enable our partners to provide the lowest prescription drug costs to their plan sponsors and employees. We’re able to do this by leveraging proprietary algorithms that push information to our customers and their members, enabling them to make the best decisions about benefit design and retail partnerships.
Enlighten us on how you have made an impact in the healthcare niche through your expertise in the market.
I believe the greatest impact we’ve had has come through the deep insights we have into consumer behavior. We have studied price elasticity at the consumer level and at the drug level. We have built pricing algorithms that allow us to offer the lowest cost of goods and improve adherence for the millions of members we serve.
Describe the values and the work culture that drives your organization.
We’ve created a culture that promotes collaboration and empowers our employees to create solutions. We’re accountable to each other and our customers, and we bring an urgency to continually innovate to meet our customer needs and to be disruptive in the marketplace. We are looking at our industry through a different lens and expect our employees to act as inspiring innovators. It’s the commitment from our employees and their dedication to innovation and building best in class solutions that is the bedrock of our company’s success.
Undeniably, technology is playing a significant role in almost every sector. How are you leveraging technological advancements to make your solutions resourceful?
We are a technology provider with the most modern and comprehensive enterprise platform in the industry. I don’t view an enterprise platform solution as a utility in this space, I view technology as a business enabler and differentiator that drives lower costs, improves clinical outcomes, and creates more predictability across the marketplace. The machine learning and AI tools we are building across drug pricing, clinical programs and our retail pharmacy networks will reinvent the mid-market PBMs, as well as other entities who partner with us.
If given a chance, what change would you like to bring in the healthcare industry?
We are working to remove the black box of drug pricing in the PBM industry. Our intent is to bring full visibility to the actual cost of goods for all of our customers. We are a fee-based business and believe in 100% passthrough of our market position to our customers.
What, according to you, could be the next big change in the healthcare industry? How is RxSense preparing to be a part of that change?
The prescription drug marketplace is ripe for disruption. I believe the market is moving and will eventually become 100% cash pay for all drugs at retail and mail. There will be a subset of very expensive brand. drugs and all specialty drugs that will either be insured or reinsured but this change will eliminate the markup on 90% of drugs that people purchase.
Where do you envision yourself to be in the long run and what are your future goals for RxSense?
We’re redefining the pharmacy benefits ecosystem. I believe we’re going to be the leading product manufacturer in the marketplace, continuing to build innovative solutions for our customers and potential partners.
What would be your advice to budding entrepreneurs who aspire to venture into the business sector?
Nothing ever goes as planned. You have to keep finding new solutions, move quickly and keep showing up. You also have to be incredibly passionate about your business idea and surround yourself with great people.
Why should a PBM or an organization that aspires to be their own PBM partner with RxSense?
I believe operational efficiency is table stakes for prospects considering a new platform; the real benefit of partnering with RxSense is to obtain full visibility into cost management and improving clinical performance/efficacy. I think the entirety of the business should be automated and we can enable that, as a data management company that leverages everything off of one single comprehensive platform. It’s one thing to change a formulary within minutes on our platform – which is fantastic – it’s another thing to change a formulary and run pricing scenarios so you understand exactly what the impact and the benefit of that change will be. It’s these reasons that clients are continuing to realize the tremendous value we can bring and why I think we have a huge opportunity for our technology to redefine the pharmacy benefits space.