A Louisville health-tech firm is looking to increase transparency in the prescription drug process.
EmsanaRx is a spinout of EmsanaHealth and the Purchaser Business Group on Health (PBGH). PBGH is a coalition of large private employers and public institutions “dedicated to transforming healthcare throughout the country with strategies to improve quality and control costs,” according to its website.
The concept for EmsanaRx spun out of a conversation between the Board of PBGH and Elizabeth Mitchell, its CEO. Greg Baker, CEO of EmsanaRx, said the group decided that, instead of looking for a particular pharmacy service that meets all their requirements, they should just build it.
EmsanaRx is just that. Based in Louisville, the company is in the early stages of launching its service.
EmsanaRx is a platform that aims to help doctors, pharmacists and patients get the information they need to make better clinical decisions. It’s meant to increase transparency around whether a certain drug is covered by a patient’s insurance provider.
PBGH is a nonprofit that holds 90% of the outstanding shares of Emsana Health, thus controlling the board and management. The other 10% is an employee option pool. EmsanaRx took on a seed funding round, with investors owning 20% of the company's equity, employee option pool at 25% and the outstanding 55% are held by Emsana Health.
It was registered as a C-corporation in Delaware in March 2021, but then leaders realized its values were more in line with being mission-driven than delivering more profits to shareholders each year, Baker said. It decided to re-register as a public-benefit corporation instead. It received that distinction in March 2022.
“Now we don't have to just focus on maximizing shareholder value,” Baker said. “We can actually deploy resources and make decisions that are in the best interest of their client and members. We've got the legal oversight by which to do so.”
EmsanaRx was also the first company to receive Canopy certification, a distinction unique to Kentucky companies. You can read more on Canopy here.
One of the biggest issues facing health care is the pharmacy component, Baker said.
“The problem is the current PBM [pharmacy benefit management] industry is driven by very large for-profit companies [that] are making tens of billions of dollars in profit a year,” Baker said. “As a for profit company [that's] beholden to shareholder, and they have to make more next year and the year after and the year after, they continue to make these decisions that really are against the best interests of their clients and the American public.
"... At some point in time, the pendulum goes too far, especially when you're doing health care. We really look at ourselves as a counterweight to that.”
The company outsourced the building of the platform.
The first client was onboarded on Jan. 1. Baker said the industry isn’t one where you can grow fast, and it has a small number of clients. He didn’t disclose the exact figure, but noted that it was in the single digits.
He said people change their benefits on the first of the year. That creates a long sales cycle, and employers are looking for a start in 2024.
“You can only grow as fast as the benefit cycle,” he said.
EmsanaRx has 12 employees and it outsources finance and legal work. Its seed funding round was $3.5 million and plans to take on more funding in the next several months.
