Biotech
Thursday, January 25th, 2024 5:20 pm EDT
Key Points
- Tyson Foods Shifts Away from Traditional Pharmacy Benefits Managers (PBMs): Tyson Foods has decided to break away from traditional large pharmacy benefits managers (PBMs) and has chosen PBM startup Rightway to manage drug benefits for its 140,000 employees. This decision is driven by Tyson’s aim to reduce spending on high-cost drugs and follows a bidding process that led to the selection of Rightway over CVS Health’s Caremark.
- Rightway’s Transparent Model and Industry Upheaval: Rightway offers a transparent PBM model that guarantees employers a 15% savings on pharmacy costs. The startup passes drug discounts to employers and plan members, providing concierge care to guide employees toward lower-cost alternatives. This move by Tyson reflects a broader industry trend where startups promising lower costs and increased transparency challenge the dominance of traditional, larger benefit managers.
- Challenges and Opportunities in the PBM Industry: Traditional PBMs, including CVS Caremark, Cigna’s Evernorth, and UnitedHealth Group’s OptumRx, have historically controlled a significant portion of the pharmacy benefits market. However, they have faced scrutiny for the lack of transparency in their negotiations with drugmakers. Tyson’s shift to a smaller, more transparent PBM like Rightway signifies a potential shift in the industry dynamics. If more large employers follow suit, it could improve competition and potentially bring down drug costs. However, skeptics question whether increased price transparency alone will significantly impact drug prices. Tyson hopes to address health issues such as diabetes management with its new PBM, emphasizing the need to balance cost with access to care and highlighting Rightway’s flexibility in decision-making.
Tyson Foods is set to become one of the first Fortune 100 companies to break ties with traditional large pharmacy benefits managers (PBMs) in an effort to reduce spending on high-cost drugs. After opening its benefits contract to bids, Tyson chose PBM startup Rightway over CVS Health’s Caremark. Rightway offers a transparent model that guarantees employers a 15% savings on pharmacy costs, passing drug discounts to employers and plan members while providing concierge care to guide employees toward lower-cost alternatives. Tyson’s move follows soaring pharmacy costs, with increases ranging from 12% to 14%, leading to a shift away from the traditional PBM model. Tyson’s Vice President Renu Chhabra expressed difficulty obtaining data on drug costs from the previous PBM, emphasizing the need for a partner offering transparency and efficient information management. CVS Health stated it would continue to provide specialty drug pharmacy services in collaboration with Rightway, but Tyson’s decision reflects a broader trend as startups challenging traditional PBMs gain traction, promising cost savings and transparency. This shift could improve competition and potentially reduce drug costs for large employers, challenging the dominance of major PBMs such as CVS Caremark, Cigna’s Evernorth, and UnitedHealth Group’s OptumRx. Despite the industry upheaval and increasing calls for transparency, skeptics question whether price transparency alone will significantly impact drug prices. Tyson aims to tackle diabetes management with its new PBM, emphasizing the importance of balancing cost with access to care and highlighting Rightway’s flexibility in joint decision-making.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/24/tyson-foods-drops-cvs-picks-rightway-pharmacy-benefit-manager.html
