For many employers, managing the specialty drug benefit has become an exercise in frustration. Employers are absorbing runaway costs on specialty drugs that in too many cases, do not improve a patient’s length of life or provide other clinical value. In 2019, the average cost per-person for specialty drugs exceeded that for hospitalizations among people using at least one health care service. This pace of cost growth is simply not sustainable and threatens the financial viability of the entire health care benefit.
To make matters worse, existing solutions in the market are not well-equipped to tackle these problems. Traditional PBM business models are plagued with conflicts of interest, including spread pricing, pharmacy ownership and rebate retention that put them out of alignment with their clients. The traditional PBMs have little incentive to promote cost-effective drug use, enforce prior authorization requirements, or report the outcomes of their management interventions. Instead, their conflicted revenue streams create financial incentives to promote greater drug utilization, cover higher cost drugs with greater rebates, and promote the use of their own pharmacies even when it may not be in their client’s best interest. In addition to these challenges, PBMs are often unable to produce robust, actionable information to allow employers to hold PBMs and other vendors accountable for the promises that they make to reduce the waste and control unnecessary spend. Addressing this lack of alignment and transparency is a critical foundation for attacking the specialty drug challenge.
It is against this backdrop that Archimedes was formed. We designed our business model to align our interests with that of our clients. 100% of our revenue comes directly from client fees. We do not keep spread from drug discounts or rebates and we do not own pharmacies, thereby eliminating these tightly held conflicts of interests and allowing us to provide the most rigorous clinical management at the lowest net cost. Our technology platform provides visibility to opportunities for better managing the specialty benefit and transparent reporting to clearly see the results; and our clinical management of specialty patients is setting a new standard for the industry. For us, creating Archimedes was about more than simply building a company. Our goal is to transform the PBM industry to provide the necessary ingredients for the sustainability of the prescription drug benefit – alignment, value, and transparency.
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