More Employers Turning to Benefit Startups to Manage Drug Costs

The heads of the Philadelphia Teamsters health fund knew it was a gamble to switch its prescription drug benefits from CVS Caremark, a giant in the industry, to a startup with few clients and big promises. The risk paid off.

Capital Rx Inc. offered the Teamsters Health & Welfare and Pension Trust Funds of Philadelphia and Vicinity more than $4 million in savings the first year in 2019 compared to CVS, Executive Director Maria Scheeler said, and actual costs were even lower. From 2019 to 2022, expenses consistently came in below projections—nearly 10% lower than expected over four years. ...