Chicago startup targets misapplied 340b drug discounts

The 340b program, under which hospitals qualify for significant discounts on drug prices if they provide sufficient public aid to the indigent, has been a growing sore point for the pharma industry, mostly because what started out as a small, focused program has ballooned into a large one, with billions of dollars of pharma sales involved. A 2018 report from the Government Accountability Office, “Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement,” found glaring inconsistencies, with the pharmacies contracted for providing hospital prescriptions diverting profits from the program, and hospitals charging full price for drugs and keeping the discounts.

Now, a startup, Kalderos, hopes to address these and related discounting issues with a cloud-based platform “that detects problems in the complex financial interplay between pharmacies, insurers, manufacturers and payers,” according to the company. Current customers include seven of the 15 largest drug manufacturers, it says. The company will provide real-time, point-of-sale solution to identify errors that have previously gone undetected, “ensuring the right discounts are applied to the right transaction.”

According to press reports, the Mercato investment will enable the firm to add to staffing and build out its platform. Kalderos’ opportunity points to not only to the byzantine processes by which drugs are bought and sold (especially in government-funded programs), but also to weaknesses in the pharma industry’s current slate of IT tools for pricing and channel management—all of which might be about to undergo radical change as proposals to do away with rebates and other intermediate pricing strategies are debated in Washington.