Scoop: Specialty pharmacy startup nets $25M
Specialty pharmacy startup House Rx raised $25 million in Series A funding led by Bessemer Venture Partners, company co-founders Ogi Kavazovic and Tesh Khullar tell Axios.
Why it matters: Specialty medications present a special hassle since insurers dispense the majority of such drugs, often on a delayed basis and without coordination with providers.
- These drugs are often expensive and include medications for different types of cancers and other severe conditions.
- Insurers and pharmacy benefits managers (PBMs) are mandating that providers complete detailed prior authorizations, a lengthy and mostly manual process.
- In surveys, some oncologists have suggested those delays may be tied to poorer health outcomes.
How it works: House Rx partners with specialty clinics to get patients care and medications from the same place.
- The company either trains clinics' existing staff to use its tools and software or places pharmacists or pharmacy technicians inside the clinic, where they collaborate with doctors on patient care.
- "We were afraid we might be starting a turf war, but it turns out the doctors and the pharmacists love it," says Kavazovic, House Rx's CEO. "It's a complementary skillset."
- House Rx also assigns a remote pharmacist to the clinic to verify that prescriptions are being written and sent out appropriately.
- Currently focused on Medicare Advantage patients, the company charges a per provider/per month service fee.
Yes but: The company faces fierce competition from controlling incumbent PBMs for whom specialty drugs tend to be highly profitable.
- "There is a ton of opportunity here, but it is very challenging for specialty pharmacies to get penetration into these broader PBM networks," says Antonio Ciaccia, a pharmacy sector analyst and the CEO of research firm 46brooklyn.
- Khullar, House Rx's president, hopes that as more and more startups begin to challenge those dominant PBMs, House Rx will have more leverage — especially if it can show better patient outcomes.
Details: First Round Capital, Character.vc and 1984.vc joined Bessemer in House Rx's raise, which brings its total financing to $30 million.
What they're saying: Kavazovic, Khullar and industry observers view House Rx's biggest potential advantage as helping to streamline and improve patient care.
- "That’s the dream, honestly — getting physicians and pharmacists and nurses working together," says Ciaccia. "When you’re talking about patients with complex diseases on specialty medications, collaboration is essential to make sure they're calibrated on the right treatment path."
Erin Brodwin co-authors the Axios Pro Health Tech deals newsletter. Start your free trial at AxiosPro.com.