Episode 076: A PBM Not Looking to Rip You Off with Vinay Patel, PharmD

Pharmacy Benefit Managers (PBMs) have been the villains in a number of earlier episodes of the Paradocs. Basically, PBMs are some of the largest health care corporations in the US and exert tremendous lobbying pressure in DC and state capitals. Although their role in health care is to efficiently settle claims with insurers, patients, and employers - that's not how they make the bulk of their money. Actually, they make their billions through a complicated series of kickbacks and rebates from drug companies meaning they pay more attention to that revenue stream than their core mission of serving to keep costs low for their clients.

My guest today is Vinay Patel, a pharmacist who was frustrated by the actions of the PBMs and decided to do something about it. He saw that there was an opportunity to carve out space in the market for a PBM that is transparent to its clients. They are harnessing independent pharmacies around the country to keep costs low. Thanks to the internet it is easier than ever to collectively coordinate pricing for these pharmacies to help them compete against the large big box national chains.

However, the big PBMs which comprise 80% of the PBM market, won't go down without a fight. They are continuing their price gouging and use their influence to move friendly regulations to the detriment of the upstart PBMs fighting for market share. Patel and his partners are hoping to break the stranglehold on health care from these big players in the pharmacy and PBM market with Mako Rx. The basic business model of Mako is to provide the adjudication process as a straightforward fee per transaction removing the incentives the larger PBMs have for driving up costs to employers, etc.

According to Patel, Mako Rx is nearing the launch of its app that will help consumers find low cost drugs from the independent pharmacies in the US and hopes to expand to cover the entire country in a few years.