Rightway, a leading healthcare technology and services company, raised $100 million in Series C financing at a valuation of $1.1 billion. Jordan Feldman, Rightway Co-Founder and CEO, joins Yahoo Finance Live to discuss how the company is faring amid the pandemic and revolutionizing the healthcare industry.
- Welcome back to "Yahoo Finance Live." Health care tech startup Rightway, which is looking to make navigating the health care system easier on employers as well as employees announced today that it's raised another $100 million in its series C funding round to reach a valuation of $1.1 billion. And for more on how that will accelerate the journey, we're happy to be joined by the co-founder and CEO of Rightway, Jordan Feldman joins us now, alongside Yahoo Finance's Anjalee Khemlani.
And, Jordan, I mean, when we look at it-- first off, congrats on the race. $100 million is a lot here-- when we're talking about how it helps you guys in your goal of kind of building out a concierge health care service that's easier to navigate the industry, talk to me about how big of a boost this round is?
JORDAN FELDMAN: Yeah, so we're looking to be the most comprehensive platform within the enterprise health care ecosystem. So what this round of funding allows us to do is really start to build out the features and functionality to help us get there. We're very focused on the patient navigation side, giving members the tools, the resources, the advocacy. We're also focused on the pharmacy benefits landscape, simplifying that experience, giving people real-time pricing information, the best place to get a drug, the best drug to be on, and really, taking the frustration, the hassle, the headache out of health care and empowering them to be better health care consumers.
ANJALEE KHEMLANI: Jordan, Anjalee here. To talk to me about that PBM part of it, because I know that there have been many who have tried to do this with regard to generics. Are you also able to do this in the brand space? And what are you able to do right now?
JORDAN FELDMAN: Absolutely, so the Rightway Rx platform is a fully vertically-integrated PBM. So we're actually replacing the legacy infrastructure that's you know, controlling over 80% of the prescription drug market. That 80% of the prescription drug market is trapping about $65 billion of profitability in a middle-man-type environment.
So what Rightway is doing is creating transparency around this market, creating financial alignment between the PBM, the underlying employer, and the underlying employee. So whether it's brands, generics, specialty, whatever the pharmacy need is for the underlying employee, Rightway Rx is really able to support that member longitudinally across medical and pharmacy, delivering the most cost efficient therapy for that underlying member.
ANJALEE KHEMLANI: Could you expand on that? Tell me how you're able to do that. Because typically, the problem has been that bumping into these larger PBMs has been a problem for anyone trying to start in this space. How are you overcoming that?
JORDAN FELDMAN: Yeah, so first and foremost, we have a rebate list model. So if you look at the legacy PBMs, they operate on rebates and spread pricing. They're trapping margin for every drug that's transacted within the ecosystem, from drug manufacturers to wholesalers to retail pharmacies.
So the Rightway Rx model is a fully transparent, fully aligned model, where we're passing back rebates to the employers and their employees. And we're charging like a technology company-- an admin fee for our services, for our member platform, for our analytics, for our formulary design. And the way we're able to reduce drug costs is by more aggressively managing utilization.
Our history over the last four years in the care navigation space has allowed us to build an ecosystem and a platform that members want to use that members love. They're coming to us for all of their health and health care concerns. And when they do that, we can help them understand what drug they're on, why they're on that drug, and how most cost effectively procure that drug.
ANJALEE KHEMLANI: So when you talk about those rebates in place and the other features, ultimately, how significant is the cost savings?
JORDAN FELDMAN: Yes, so for our early customers, we're seeing anywhere between 20% savings at the low end, and up to 35% savings at the high end. And you know, this is twofold. This is by better cost of the underlying pill, but also better utilization. I think PBMs historically haven't focused on the utilization aspect of pharmacy drugs. And that's really where we're transforming and re-architecting what a PBM should look like.
We can actually engage members around their pharmacy spend, give them the support, the advocacy, the transparency, the guidance, that's been essentially nonexistent in the pharmacy benefits landscape. So as we continue to work with these employers, we can make a significant impact on their total cost of pharmacy, but also their total cost of care. And that's what we built by combining navigation plus new-to-the-world PBM and really kind of defining a new category within the health care services ecosystem.
ANJALEE KHEMLANI: Jordan, I know that a lot of people are really interested in health care right now, especially because of the pandemic. There's so much more investment in the space that you're benefiting from, clearly. But the idea isn't new, right? The idea of a navigator, the idea of concierge service has been around for some time. There have been multiple other companies offering the same.
And the easiest way has typically been through linking up with employers or working directly through pilots and such with insurers. What's the long-term view of this? Where do you see your market?
JORDAN FELDMAN: Yes, so I would argue navigation, advocacy, even telemedicine historically, the expectations were lower. You know, telemedicine 1.0, navigation 1.0, pre-pandemic were optimisation layers. And the virtual digital delivery of health care wasn't as significant, wasn't as impactful.
But you know, fast forward coming out of the pandemic, folks have higher expectations. They're looking to these digital environments, virtual environments, for not only care decision support, but care delivery to do more for them, to be more impactful, be more supportive. So you know, the long-term vision for what Rightway is going to become is really that singular digital front door into health care.
We want people to go to us for things related to pharmacy, medical, where they go for a drug, where they go for an MRI, how they find a primary care doctor. So by centralizing this entire ecosystem, we're able to give members that digital front door into health care, but with the personalization of what we call a doctor in the family. And we believe this you know, high tech, high touch approach to navigation is really what members are looking for and what really can make an impact an underlying spend.
- Jordan Feldman, Rightway's co-founder and CEO, it's good to have you on the show today. And our Thanks to Anjalee Khemlani for joining in on that conversation as well.