Rescription, a healthcare startup led by Scott Martin, is disrupting prescription drug affordability through their innovative approach to the 340B federal program. Since launching in 2023, they've achieved 30% savings for health systems while providing zero-dollar copays to patients, and are now expanding to 14 states with their patent-pending adjudication technology.
In this episode of Product in Healthtech, we reconnect with Scott Martin, founder and CEO of Rescription, to discover how his company has evolved since our previous conversation.
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Chris Hoyd 0:00
Welcome to Product in Healthtech. I'm Chris Hoyd, principal at Vynyl. Today we're diving into the world of prescription drug cost innovation with Scott Martin, founder and CEO of Rescription. Scott returns to our podcast to share some updates since we last spoke with him a couple of years ago. Rescription has pioneered a unique approach leveraging the 340B federal program to dramatically reduce prescription costs, benefiting health systems, employers and patients. In our conversation, we explore Scott's response to the recent Wall Street Journal article about Rescription, highlighting how they're using the 340B program as intended, while ensuring both health systems and patients benefit. How Rescription's partnerships with the health systems Bergen New Bridge and Baton Rouge General are delivering cost savings while providing $0 copays to patients their patent pending, best price adjudication technology developed in collaboration with Vynyl that enables upfront processing at scale and differentiates them from traditional health system approaches and Rescription's ambitious expansion plans across 14 states, 15 additional health systems and final negotiation stages. Let's jump into that conversation.
So Scott, Rescription was mentioned a few days ago in Wall Street Journal article sort of referenced, you know, as part of a new breed of drug middlemen. How would you differentiate restrictions approach, both from traditional PBMs and the other startups mentioned in that piece?
Scott Martin 1:35
Yeah, thanks for that. Our entire model is 100% different from what exists today. We use the term radical clarity that we deliver - so everything from top to bottom, bottom to top, is completely different. And that starts with having an actual guaranteed published price for every single prescription. And you combine that with the only way that we generate revenue, which is a simple per-member per-month subscription fee, and just those two things eliminate everything that everybody can't stand about a PBM, whether it's spread, pricing, formulary games, rebate games, the contract language that legally lets them play those games. So we've really reconstructed our deliverable and our program and our product from the bottom up to be different at every component from what exists today, which is really what's necessary in order to create a meaningful solution to the problem that that everybody's dealing with.
Chris Hoyd 2:44
The piece was interesting, right? It mentioned your solution in the context of how it utilizes this federal program, right? The 340B program, which I hadn't seen discussed in the past, as far as we can tell, your you guys are really driving engagement. You're saving folks a lot of money. This was the first time I've sort of seen it framed the way that it was. What was your reaction to that?
Scott Martin 3:10
We were thrilled that the article came out. Exposure is terrific, especially as as a startup. And you know, look, you take a leap of faith when you get interviewed, you don't know what the story is - what their take is going to be on it, but they were extremely accurate and in what they delivered. So, you know, we're most pleased about about that aspect of it. But there are a lot of misconceptions with with 340B, I think the biggest key, and the article did a good job getting this across, that we are using 340B as it was intended to be used as the letter of the law, the procedures, the compliance, all of that is part of our program, and actually it even enhances it. One example of that is that, you know, the manufacturers complain that just the the health system is generating revenue and that the patient is still paying top dollar for the prescription drug. In our model, the patient pays zero for the drug. So not only does the health system benefit, but the patient benefits as well. So there's quite a few misconceptions. One of the biggest ones is that this is not, yes, it's a government program, but this, these revenue dollars, this income, so to speak, for disproportionate share health systems that are treating the indigent, is not coming from the government. It's not coming from taxpayer dollars. It's actually coming from the drug manufacturers. So that's where the money streams in from, and it's actually, you know, a very clever program that the government put together to offset the losses that these disproportionate share health systems genuinely need to offset the losses they take by treating the indigent population.
Chris Hoyd 5:10
We had you on the Product in Healthtech podcast a couple years ago. At the time you mentioned, you know, I think you were maybe just starting a partnership with Newbridge Bergen Rutgers Health System in New Jersey, and I think this latest journal piece, also mentioned that you've started working with Baton Rouge General. So can you share a little bit how those partnerships have evolved since we last spoke, and what you've learned from those initial implementations?
Scott Martin 5:37
Yeah, so Bergen New Bridge, which is part of Rutgers University Health was really our, and again back speaking with Morgan, and in the interview that you referenced, that was really going from from concept to proof of concept. We went live 1-1-23, happy to say that the savings continues. They're at roughly 30% savings. The deliverable has exceeded expectations from a consumer standpoint, both the patient utilizers as well as the employer. And then that has has grown into signing Baton Rouge General up, which is about double the size of of of Bergen New Bridge, and we're, we're almost three months into the program. They're currently at 27% savings, trending upwards towards 35% and again, the favorability comments back from the utilizers is, I mean, the quotes that we're getting from Baton Rouge General are just terrific. The testimonials HR benefit team has said they've, they've never had a transition go so smoothly as what it did, as the process with with Rescription, so we continue to beat expectations, and now we're focused on the employers in Louisiana, and we're bidding on the state. We're bidding on LSU, the city of Baton Rouge, a large number of just great clients that we're hoping to work with, both uh, small, medium and large, as far as employee counts.
Chris Hoyd 7:25
Very cool, okay, so I'm curious some some pharma companies have you know, taken measures to restrict 340B discounts in recent years? Are you viewing that as you know, a headwind? Is that some potential industry pushback? And how do you you know? How do you think about that? How might you address that?
Scott Martin 7:43
The law stands so they they're mandated to participate in it. But where some of the pushback is, for example, is on contract pharmacies. Some hospitals have upwards of 600 pharmacies that they've contracted with, where they can go back and essentially get the spread between 340B acquisition price and retail, and that's how they generate their their revenue. Push back on those contract pharmacies is occurring by the manufacturers. But what's unique, again, with with our model, is that we don't work with contract pharmacies. We utilize the in house pharmacy of the health system, which is what the manufacturers are arguing for. So just like the the example I gave with them wanting members to benefit from a lower cost. Our members pay zero, and we're using the actual pharmacies at the health system partner. So we're really turning any of these headwinds into tailwinds, from the standpoint of not only 340B compliance, but what's good for the health system and what the manufacturers are actually looking for.
Chris Hoyd 9:03
I love that. Okay, very cool. So, you know, it sounds like you guys are clearly innovating on business model, right? I know you're also innovating on products and technology. Can you talk a little bit about what the rescription, sort of tech/suite, looks like, and how that drives outcomes for patients.
Scott Martin 9:24
The whole key to this is being able to do it at scale, and we've got patent pended adjudication technology that that Vynyl is has played a role in developing with us. It allows us not only to do this at scale, but to do it utilizing compliance and also upfront. And what I mean by that is currently, health systems are doing their adjudication of the claims after the fact and taking the spread in order to do it the way that we're doing it, without a spread and to be able to do it with the employer and the the employee member participating, it's got to be done up front, as far as being able to adjudicate based on the plan design, the benefits that the employer has set up. And that's what our technology allows us, us to do. And we're thrilled that it's patent pending and it does it at scale and allows us to to go out to market and expand what we're doing. The name of the game for us is to expose as many employers and employee members as we can to the program to really fulfill our mission, which is prescription health equity for all, so that we can bring these lower cost drugs to the to the masses, and do it in a way where people can actually afford their prescriptions. And part of the testimonials that we're seeing, or that we're being inundated with, is the fact that members admit that they weren't taking the prescriptions because the cost shifting from the employer caused it to not be affordable anymore, and by us providing the $0 copay, they're back on their prescriptions, they're out of the emergency room, their outcomes are improving. So we're thrilled. That's the mission of our company, and that's what we're providing.
Chris Hoyd 11:16
Very cool. Okay, last question, I just want to give you a chance to talk about what's coming next. I know you talked about marketing towards employers in the state of Louisiana, anything else on the, you know, near to midterm roadmap this year, next year, either on the product management side or on the business growth side?
Scott Martin 11:35
yeah, the exciting thing is, the momentum is building, and now we're marketing in 14 different states. We've got 15 different health systems in addition to the ones we're working with that are in final stages in negotiations, all spread out across the country, which gives us our national footprint to be able to do what we want to do. And then it really just turns a page on all these other exciting deliverables from bringing infusion therapy into it, which is another big expense for employers, for medications that need to be administered at a clinic or a doctor's office or in the hospital, where there can be five, six times markup on the prescriptions where, where we can help, obviously, in that that side as well. Abandonment and non adherence, we're already starting to tackle, and that enables us to actually show the employer a meaningful ROI on the deliverable and improved outcomes. And there's a long list of additional things, warehousing our data and being able to utilize our data to further benefit the employer and the employee members. So there's a long to-do list, and we're just getting started, and we truly believe that we are are fixing the the prescription drug system in the country for employers, and we're full speed ahead.
Chris Hoyd 13:07
Excellent. Scott, thank you so much for joining us today.
Scott Martin 13:10
I appreciate it. It's great to talk to you again.
Chris Hoyd 13:13
We will go ahead and link the Wall Street Journal article in the show notes below. You can also connect with us on LinkedIn, YouTube or on our website, and if you have ideas or suggestions and what you'd like to hear in a future episode, or if you'd like to be a guest, please just shoot us an email at info@productinhealthtech.com.