Choosing People Over Price with Matthew Gibbs
Matthew Gibbs is the President of Commercial Markets for Capital Rx, the fastest-growing pharmacy benefit manager (PBM) in America. He is a pharmacist by background and also has various leadership positions experience for both national health plans and several PBMs for over 20 years.
In this episode of MedStreet Journal, Matthew Gibbs shares his experience and journey about what he does for Capital Rx and how they make sure to deliver their goal which is to offer optimal patient outcomes with drug-transparency for pricing.
“You have to challenge it enough and not just do it with PR and marketing but go to the core of the fundamentals and, whatever is driving in the actual dynamics, and change it.” [19:49]
Who is Matthew Gibbs? [00:51]
For Matthew, getting into the healthcare industry was inevitable because most of his family members are physicians, nurses, nurse practitioners - almost everybody was in the medical field. After he got his pharmacy degree, he decided to be on the other side of the healthcare field and that led him to be working with Capital Rx.
What does Capital Rx do to establish drug-transparency price? [1:57]
For decades, there has been a lot of talk both in the pharmacy industry and public market about the cost of transcription drugs particularly comparing it from the cost in the United States to the price globally. With this, Capital Rx has put in a Clearinghouse Model that allows sellers and buyers to communicate with each other while helping members to see the actual price of the drugs and make the decision by themselves.
What is the difference of Capital Rx to any other PBM? [5:13]
According to Matthew, some PBMs tend to rely on an Average Wholesale Price (AWP) as their cornerstone. This is a “self-reported” drug price that comes from drug manufacturers to a publicly-traded third party. Capital Rx, on the other hand, uses National Average Drug Acquisition Cost (NADAC)
Bringing awareness to the target audience [6:53]
Matthew said that the health insurance industry, whether it be health plan, PBM, dental provider, etc, is essentially guided by consultants and brokers so they could not get into these markets without talking to the consultants & brokers. To address this, Capital Rx spent the last year educating that community so they can be considered as an alternative model.
What is the most effective way in sharing Capital Rx’s message out? [8:51]
Matthew has been working in the PBM industry for 20 year and has been through 4 different PBM companies. Based on his vast experience in the field, Matthew believes that the most efficient way to communicate their message is through having direct conversation with their potential client as it allows them to articulate and optimize the message properly.
What is the impact of Capital Rx’s Clearinghouse Model [12:34]
Capital Rx has seen around a 13% decrease in average drug cost for clients that have used the Clearinghouse Model and it is year over year. According to Matthew, there are several factors that drive them to this success and one of this is the pricing model they’re using which prohibits them, as a PBM, to pay the pharmacy and charge the customer separately - they operate transparently.
Capital Rx prioritizing people with price transparency [14:53]
In 20 years of his journey through the healthcare industry, specifically PBM, Matthew believes that the most accessed part of healthcare is pharmacy and it is so under leveraged. He said that we don’t go to the doctor every month when we need to refill our prescription, instead, we go to the pharmacy. Hence, Capital Rx developed the pricing framework to help members with their journey.
Challengers that Capital Rx had to overcome [16:26]
Matthew said that the main challenge that they’re facing is the fact that 70% of their marketplace is dominated by three major players that are either owned or they own a major health plan or administrators who work broader for the company. But the good news is that the employees and employers are the ones who pay the bills and their voices are louder. Capital Rx’s best tool is the people’s voices advocating for them.
Matthew’s advice for people in the healthcare industry that are striving [19:05]
Matthew said that in order to stand out, you have to do something different. With Capital Rx, their Clearinghouse Model was something different in the market and incomparable to larger organizations. Going to the core of the fundamentals, whatever is driving the actual dynamics and, then change it.
Matthew answers the rapid-fire round of questions. [21:33]