Prescription drugs can be expensive and prices often catch patients off guard. It’s a problem many have tried to solve, including politicians.
“You’ll find that most of the ire around the drug [pricing] problem is directed at manufacturers for raising their prices annually, but that’s typically just around 5 percent. ... But the reality is the greatest expense and the greatest driver of excess spend are the prescribers themselves unintentionally,” said Tom Dorsett, RazorMetrics CEO and co-founder.
RazorMetrics, an Austin-based startup, aims to make prescribers more aware of medication costs while also saving employers and patients money.
RazorMetrics co-founder Dr. Siva Mohan’s biggest complaints from patients was sticker shock about how much their prescriptions cost. Mohan, who also serves as RazorMetrics’ president, currently practices interventional cardiology.
“The reality is prescribers have very little visibility into how much the drugs they’re prescribing costs their patients,” Dorsett said. “Each health plan has a different formulary, different plan details and rebate structure. There’s so much that goes into pricing these drugs. And the variance from health plan to health plan, patient to patient is really just too much for a physician to keep up with.”
That’s where RazorMetrics’ platform comes into play. It is used by employers and health-plan managers to keep costs down for the company and employees. The software-as-a-service (SaaS) platform helps change prescribing behaviors by showing physicians lower-cost alternatives.
Founded in 2018, RazorMetrics expects to have a busy year. The company announced Tuesday a $6 million Series A round. This will be the company’s last investment round, Dorsett said.
Funds will be used to launch a partnership program and hire additional staff to keep up with demand. Dorsett said he expects RazorMetrics to grow from 13 employees to 20 or 30 by the end of the year. New positions will include account executives and various development roles, including engineers.
RazorMetrics also plans to roll out strategic partnerships that will help the company reach more than 59 million employees and members in Q2, according to a statement.
