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Glen Tullman on launching Transcarent Pharmacy Care: Unlike others, we are a one-stop-shop

Silos, and the resulting fragmentation, are at the heart of the healthcare industry’s deep dysfunction — be it in care delivery or a person’s financial journey.

Glen Tullman, CEO of Transcarent, wants to tackle both — at least for self-insured employers and the millions of Americans who receive healthcare benefits through them. The Palo Alto, California, company announced on Monday that it is launching a pharmacy benefit service for self-insured employers and health systems.

“So the idea is to have an immersive experience,” Tullman said in an interview in Chicago. “Today, your PBM is very disconnected from the rest of your medical care. And as an example, my youngest son, who has type one diabetes, has a different company that delivers his insulin, that delivers his continuous glucose monitor, and that delivers his other medications. That’s so much complexity — we’re trying to change the experience people have with their PBMs. We give people the opportunity to choose where they want their medication delivered, how they want to receive it, and the like.”

Transcarent is the latest company to join the quest to dismantle the hegemony of the nation’s 3 largest pharmacy benefit managers owned by owned by CVS Health, United Healthcare and Cigna. Others have launched their own efforts to rein in prescription drug costs — they include GoodRx, Amazon Pharmacy, Mark Cuban Cost Plus Drugs, CapitalRx, EmpiRX, Prescryptive Health, Emsana Health, WithMe Health and many more.

But Tullman is quick to point out what differentiates Transcarent [derived from a play on “transparent and care”] from the rest of the brood.

We think each one of the ones you’ve mentioned — and I would add Walmart to that list — are folks that we’ll be working with very closely. And we think all of those are great organizations. But what consumers want is one integrated experience to get their healthcare and pharmaceuticals. So when they’re using Transcarent, everything is in one place. And that includes talking to a doctor, all your pharmaceuticals, your care at home, your surgeries, and complex care — all on your phone, all easy to use, and all in one place. So they all represent a solution. But each one of them, you’d have to go to separately. But with us there’s a one stop shop, and it’s easier for the consumer.

There is a reason why Transcarent and all these companies are tripping over one another as they try to get in front of the line to help consumers, employers and health systems get better prices on drugs and provide a more unified, hassle-free healthcare experience. In 2017, private health insurance offered by employers accounted for $140 million in prescription drug spending and the trajectory is unsustainable. Overall, average costs for employer-sponsored health insurance rose 6.3% in 2021 to reach $14,542 per employee, after increasing at a lower pace the year before, according to a Mercer survey last year.

While costs are increasing, established PBMs have been accused of opaque drug pricing and now, the Federal Trade Commission is probing the practices of the six largest PBMs — CVS Caremark; Express Scripts (owned by Cigna).; OptumRx (owned by United Healthcare) Humana; Prime Therapeutics; and MedImpact Healthcare Systems.

“Although many people have never heard of pharmacy benefit managers, these powerful middlemen have enormous influence over the U.S. prescription drug system,” said Federal Trade Commission Chair Lina M. Khan, in the June news release. “This study will shine a light on these companies’ practices and their impact on pharmacies, payers, doctors, and patients.”

While the FTC is aiming for a more transparent PBM structure in the U.S. in the future, Transcarent is dangling transparency to self-insured employers and health systems by offering them an alternative to large PBMs now.

“The existing model doesn’t provide employers with enough transparency to evaluate pricing and make better choices, and that translates into financial and therapeutic hardship for their members,”  Snezana Mahon, chief operating officer for Transcarent said in the announcement, referring to the current state of drug pricing.

So how does Transcarent hope to lower costs for employers and improve the member experience? First, it comes to what Transcarent will charge for providing the service,

“It’s a per participant, per month fee. And it’s one fee, so rather than markups and undetermined amounts, people know exactly what they’ll be charged for the pharmacy solution,” said Tullmain explaining how employers will pay the company.

For people, it’s all about choice and convenience and clinical integration. The pharmacy benefit allows employees to search for the best price, choose the one that they want and then either pick it up themselves or have it delivered.

While the addition of another PBM to the marketplace merely reinforces that there are many a David against the PBM Goliath (represented by the big 3 PBMs), watch out for more consolidation in this space.

Already today a big acquisition made headlines Monday. McKesson announced the $875 million acquisition of Rx Savings Solutions, a prescription price transparency and benefit insight company.

Katie Adams contributed to this story. 

Photo: Devrimb, Getty Images

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