Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.

Healthcare Brew

Maia Anderson

Healthcare Brew delivers the latest news and trends in healthcare.

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A yellow piggy bank wearing a stethoscope

How Greycoft VC decides to invest in a healthcare startup

Sharla Grass, a health tech VC at Greycroft, walked us through her process.

How does a VC decide to fund a healthcare startup?

Shannon Young

A female nurse takes care of an elderly male patient

Debate over nurse-patient ratios heats up

Here’s what you need to know about so-called safe staffing policies.

An illustration of two hands, one holding a coin with a dollar sign and the other holding a heart with a plus sign

Hospital operating margins up slightly in November 2022

Lower expenses and increased outpatient revenue helped buoy facility performances.

Hospital finances fared better in November 2022, but they’re still down

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Healthcare Economics

illustrated headshot of caroline catherman, healthcare brew reporter

Caroline Catherman

 the three largest PBMs—CVS Health’s Caremark, Cigna Evernorth’s Express Scripts, and UnitedHealth Group’s Optum Rx—of overcharging for drugs, pocketing savings, and giving perks to their vertically integrated insurance companies as well as their own specialty and mail order pharmacies.

The Big 3 deny this, saying they pass the vast majority of savings on to customers. They’ve recently introduced some transparent models to prove it. Cigna’s Express Scripts, for instance, 

 Oct. 27 it would phase in up-front discounts to replace rebates.

Meanwhile, alternative PBMs that already have transparent models like AffirmedRx, Rightway Healthcare, and Navitus Health Solutions are 

. Experts tell Healthcare Brew that though these alternatives aren’t perfect, their models may save insurers and patients money.

“Everybody in the [traditional] supply chain benefits from higher list prices,” Navitus SVP and Chief Pharmacy Officer Sharon Faust told Healthcare Brew. “It requires innovation and disruption of all the historical models to drive cost savings.”

Unlike traditional PBMs, which profit by taking a small cut of the discounts they negotiate between drug manufacturers and pharmacies, these alternative PBMs instead earn revenue through a 

, David Reissner, market access lead for advertising agency VML Health, told Healthcare Brew.

Navitus, for instance, charges an administrative fee per member per month for a set contract that often lasts around three years, the alternative PBM’s President and CEO David Fields told Healthcare Brew.

Though the Big 3 maintained in a 2024 federal hearing that they pass on 95% to 98% of discounts negotiated with drug manufacturers to insurers, some alternatives like Navitus—owned by St. Louis-based nonprofit health system SSM Health and Costco—say they pass on 100% of savings.

Another way traditional PBMs profit is through spread pricing, which is when a billing plan sponsors more for a drug than it pays pharmacies to dispense it, per HHS.

A January 2025 Federal Trade Commission report accused Caremark, Express Scripts, and Optum Rx of making $1.4 billion through spread pricing from 2017 to 2022, Healthcare Brew previously 

Navitus, meanwhile, takes no spread, meaning it pays pharmacies the same amount it bills insurers, Fields said. Specialty pharmacy Lumicera Health Services, a wholly owned subsidiary of Navitus, makes money from charging a patient management fee for services provided, he said.

“Spread is very profitable. But we were founded to be in opposition to all these gains that were developed in the traditional PBM world,” he said.

What’s more, Field said Navitus provides clients with data at the individual claim level to prove it not only talks the talk but also walks the walk.

This model has won the company 800 clients comprising almost 18 million lives since it began in 2003, including state plans in Wisconsin, some plans in the Medicaid and Children’s Health Insurance Program in Texas, and the nonprofit Pennsylvania-based Geisinger Health Plan.

AffirmedRx, started in 2021, has nabbed big names like 7-Eleven and Indiana-based Purdue University. And Rightway, founded in 2017, swayed 

A September report from nonprofit trade group the National Alliance of Healthcare Purchaser Coalitions surveyed 324 employers and found 61% have moved away from the Big 3 or are considering moving away from them in the next three years.

Reissner predicts that as more alternatives come to market, bigger PBMs will face more pressure to be transparent.

“It’s going to be a requirement,” he said.

Reissner thinks it’s unlikely these models will totally take over the industry, though.

“It’s not so much about replacing the Big 3 as it is looking for alternatives that are more niche,” he said. “[They’re] carving out a significant sector among a couple key areas.”

One limiting factor for Navitus and other alternative PBM models is they require a “more complex” customer-vendor relationship—meaning, more paperwork, Reissner said.

 employers and government entities, as well as other groups that prioritize cost control and want to have access to their data in order to make informed decisions about formulary designs and benefit strategies, Reissner said.

Another thing to keep in mind is transparent PBMs still engage in practices that some—like E. Michael Murphy, senior advisor for state government affairs at advocacy and lobbying group the American Pharmacists Association—want to see reformed.

The group supports legislation aimed at reining in PBMs. At this point, 

, though their stringency varies. Arkansas took the most extreme stance after it 

 PBMs from owning a pharmacy in April in an effort to break up vertical integration.

“[Transparency] doesn’t solve the problem if community pharmacies are going to continue to be under-reimbursed,” Murphy said.

 accused Caremark, Express Scripts, and Optum Rx of providing their vertically integrated chain pharmacies with 

 and better contracts than independent community pharmacies, which face 

Navitus is also vertically integrated with Lumicera and has gone to court to 

Rather than being a problem, this vertical integration is an opportunity to add efficiency and lower costs, Faust countered.

“We think that vertical integration can be good when done in the right way and in the right manner to deliver savings,” Faust said.

A pill bottle spilling out a bunch of pharma meds and money

How alternative PBMs are shaking up the industry

As major PBMs weather trials and investigations, alternatives promise an easier way.

 for healthcare mergers and acquisitions (M&A). Then 

Combine that with structurally higher interest rates and the usual fluctuations that come with a new presidential administration—plus the fact that the next moves from the Federal Trade Commission and Centers for Medicare and Medicaid Services are a bit unpredictable right now. In fact, most of the year has been defined by 

As a result, there weren’t more deals in H1 2025 than H1 2024, according to a September 

: Total value reached $34.7 billion, up 56% from H2 

. This shows investors were “strategic,” KPMG wrote.

We talked with investors to find out how they’re allocating their dollars in a time when caution seems to be the name of the game.

Lily Lyman, a partner at Underscore VC, a Boston-based venture capital firm that backs 

 health software companies, said her firm is focused on investing in software that eases clinical and administrative workflows and supports data infrastructure and interoperability.

Many of these issues are being addressed by the biggest buzzword in any industry right now: AI. The global market for AI is expected to reach $407 billion by 2027, with healthcare leading the trend, per professional services firm EY.

Lyman also sees the potential for AI in the tech biospace to help 

 the process from a therapy’s inception to the time it reaches patients. The company co-led a $6 million seed funding round in June for Quilt Health, a digital health company that aims to do just that.

Going forward, she expects to see more of a focus on “compliance and auditability” around the tech, too.

One example: Underscore invested in an April seed round for Terra Security, the developer of an agentic AI platform that tests web applications for security 

“We’re going to need to see more around transparency, compliance, observability, and traceability as AI gets further and more deeply embedded in these different workflows,” Lyman said.

Lisa Piercey, founder and managing partner at Nashville-based lower-middle market acquisition fund Tristela Capital Partners, told us in the face of unpredictable policy, reimbursement, and regulatory changes, some things stay certain: 

Tristela Capital focuses on acquiring small- to medium-sized businesses that address evergreen problems relevant to care delivery. Though she would not publicly disclose which companies, she said her firm has acquired three within the specialty pharmacy, senior living, and worksite wellness spaces.

“We don’t know how [policy changes] are going to play out in the next 12 to 24 months, but what we can do is identify those sectors that we know have the biggest moat around them,” Piercey said.

In contrast with 2021 and 2022, when investors had a “growth at all cost, volume at all cost” mindset, she said she’s seeing others take a “more disciplined” approach, too.

Maia Anderson contributed reporting to this story.

Two hands shaking surrounded by investing visual elements

Where healthcare investors are putting their dollars 

Venture capital firms are focused on technology that enables home care and eases administrative burdens.

Each week, we schedule our rounds with Healthcare Brew readers. Want to be featured in an upcoming edition?

Many hospitals offer financial assistance programs or charity care, but still, 

 of US hospital bills go unpaid, Becker’s Hospital Review reported in February 2024.

These hospitals may write off those unpaid bills as “bad debt,” sell the debt to a collection agency for a fraction of its worth, 

 for payment, or refuse future nonemergency care to them.

But since 2014, there’s been another option: Undue Medical Debt.

The nonprofit uses donations from private organizations and local governments to buy years of bad debt from debt trading companies or healthcare providers—at a discount. The company says it has relieved nearly $23 billion in debt for 14.7+ million patients who make less than 4x the federal poverty level or have debt that’s over 5% of their income.

Undue’s leaders make it clear they are a bandage 

. But they have partnered with 300+ physician practices and health systems like Connecticut-based Trinity Health of New England as well as states like 

 to buy debt and help come up with strategies to help patients avoid it going forward.

Ruth Landé, VP of provider relations at Undue Medical Debt, talked to Healthcare Brew about the organization’s work.

This interview has been edited for length and clarity.

How do healthcare systems and providers benefit from partnering with you?

Not only can we acquire those accounts and do the debt relief, we also give analytics.

We’ll tell you what the [patients’] income levels were. They can then figure out, “Why don’t we capture those people in our financial assistance?” We can really walk them through: What are other hospitals doing in your area? What tools might be out there?

 for assistance]. And this is not some diabolical plot because it’s not what a hospital wants, but it is hard to find out what people’s income levels are. There’s technology you can buy. You have to pay for it every time you run a transaction, just like we do.

What’s the biggest obstacle in getting healthcare systems on board with a partnership?

We’ve been reaching a lot of places, growing very fast, but it’s still a relatively new concept for healthcare to have an option like us.

We spend a lot of time explaining…we’re not selling anything, and we’re nonprofit. And the other thing, I think, is that hospitals really feel beaten up. They feel so beaten up in the media, and they feel like they’re on the defensive. And when you’re on the defensive a lot, it’s hard for you to open up and trust.

Beyond forgiving debt, what can the average healthcare provider do to help patients afford care?

If you look at the financial assistance policy for any hospital out there, you will see a whole list of clinicians who don’t participate.

People can educate patients. They can poke around to see who’s not included in financial assistance to make sure that nobody falls through. If the anesthesiologists are not a part of that, that makes no sense, right?

A portrait of the Vice President of Provider Relations for Undue Medical Debt, Ruth Landé

Inside Undue Medical Debt, the nonprofit helping hospitals erase medical bills

Undue Medical Debt has taken an eraser to billions in patients’ unpaid bills.

Wouldn’t it be nice if every patient could walk into a hospital and know exactly how much they’ll need to pay? It sure would. But we’re not there yet.

Price transparency legislation took effect for hospitals and health plans in 

 and 2022, respectively, requiring them to publish previously proprietary negotiated rates for all medical services in clear, machine-readable files.

Audits have found many hospitals’ public files 

 from Turquoise Health—a platform that aggregates and analyzes public pricing data from payers and hospitals—found payer files aren’t comprehensive, either.

“They’re reporting on so many entities and so many contracts, and there is a lot of complexity. If anything, it’s a little bit of an indictment into just how complicated the reimbursement landscape is,” Leland Robbins, Turquoise’s senior director of data product, said in an Oct. 27 press briefing.

A little confused, but they’ve got the spirit.

 The biggest issue, the report says, is that many payers list multiple rates for the same procedure, with no way to distinguish between them.

Of 97 payers analyzed, 28 gave “conflicting” rates for the majority of services. CVS subsidiary Aetna, for instance, did so for 57% of its listed services.

Aetna seemed to be the biggest offender among major insurers, compared to UnitedHealthcare (6%), Cigna (6%), and Anthem (16%).

CVS declined Healthcare Brew’s request for comment. But Robbins said during the briefing the company has been in touch with Aetna about its score, and the payer is working toward fixing this.

“I don’t think this is a case of them doing something purposefully to make it confusing,” Robbins said.

The report also checked payers’ machine-readable files for outliers, meaning obvious errors where something is clearly listed at the wrong price, like an organ transplant listed for a penny. Turquoise also tracked how many files it could successfully ingest, or parse, per payer per month, a metric that points to whether payers are making their files accessible.

These issues were rarer: Only about 10% of payers were flagged for having too many outlier prices and less than 10% were flagged for not being parsable.

It’s important to ensure payer data is accurate because “insurers, not providers, create the algorithms that convert negotiated rates for services into actual prices that patients and employers pay,” Ariel Levin, the American Hospital Association’s director of coverage policy, told Healthcare Brew via email.

Turquoise Health Chief of Staff Carol Skenes hopes these data analyses can be a tool in the future for patients, payers, hospitals, and policymakers alike to make sense of the complex world of healthcare rates, she said during the briefing. The company has a product that incorporates both hospital and payer data plus reference data from other claims, Medicare, and Medicaid.

“There are a lot of gaps in the hospital files. There are a lot of gaps in the payer files. When you start to bring these things together…you can actually start to get a pretty good signal here of what the real truth is,” Robbins said.

In February, President Trump called for a makeover of price transparency efforts, accusing the rules of being “slow walked” by the last administration. Then in May, the federal government announced that technical requirements for payers’ machine-readable files were being updated, with the update finalized Oct. 1 and required starting Feb. 2, 2026.

Hospital cross symbol with money coming out of it.

Health plan price transparency still needs work, report finds

To be totally transparent: We still don’t know how much a procedure costs.

Nicole Ortiz

—there’s a new retail pharmacy going through financial troubles.

CVS Health announced last week it would close 16 of its older adult-focused primary care provider Oak Street Health locations by the end of February due to “elevated medical costs” and changes to CMS’s risk adjustment model and “payer dynamics,” CVS spokesperson Amy Thibault told us in an emailed statement.

CVS will still operate 230 Oak Street Health sites across 27 states. Aetna acquired Oak Street Health for roughly $10.6 billion in May 2023, when it had 169 centers across 21 states.

This comes following September news that CVS subsidiary Omnicare, which offers pharmacy services to long-term care facilities, had 

 and was ordered to pay approximately $949 million in penalties.

 that CVS might split up its pharmacy division from its insurance arm, Aetna, after its CVS Health CEO and President Karen Lynch 

But according to Peter Bonis, chief medical officer at market researcher Wolters Kluwer Health, these closures indicate a “rightsizing” for CVS. Just one recent challenge Bonis pointed to was the 

 2026 Medicare Advantage (MA) star ratings. Aetna announced its 

 had decreased from 88% of members being enrolled in plans with four or more stars in 2025 to 81% for 2026.

These cuts are also in line with the multiyear $2 billion 

 it announced in August 2024 to revitalize Aetna.

Bonis told us while we might see more “challenges and pivots” from CVS, “they are playing a long game.”

“CVS will continue to optimize its vertical model using its 

 along with its retail footprint print to cut costs and focus on profit pools,” he said.

 for retail pharmacies since the end of the Covid-19 state of emergency, Bonis noted retailers including CVS and Walgreens are adjusting their approaches to help address the US’s primary care shortage. The hope at the time was these health offerings would “bolster” their other offerings like PBMs and insurance.

Last November, the Health Resources and Services Administration predicted a nationwide shortage of more than 87,000 full-time primary care physicians by 2037.

“Delivering primary care that achieved sustainable profits and growth was harder than anticipated, leading most retailers to step back,” he said. “Retailers are adjusting from lessons learned and continuing to explore where and how they participate in the provision of health services.”

An Oak Street Health clinic stands in a Brooklyn neighborhood

CVS Health to close 16 Oak Street Health primary care locations

Despite this bump in the road, an expert tells us this doesn’t spell doom for the retailer.

Biopharmaceutical company Spruce Biosciences’s stock surged 

That was on Oct. 6. Since then, the late-stage startup has announced $50 million in private financing, with its stock peaking at $240 on Oct. 7.

 found stock prices on average increase 5.8% after breakthrough therapy designations, which speed up the drug development and review process for potentially transformative drugs.

Of course, investors and scientists’ opinions don’t always line up. Take 

, an ultimately failed Alzheimer’s drug that attracted investor attention and millions of funding, catapulting creator Cassava Sciences to a valuation of $5 billion in 2021, even while scientists 

In this case, however, preliminary data has scientists feeling optimistic—with caveats.

The therapy, tralesinidase alfa enzyme replacement therapy (TA-ERT), treats Sanfilippo syndrome type B, a rare fatal disease with no available cure, with doses weekly or biweekly.

This syndrome occurs when babies are born without an enzyme that breaks down a specific sugar, which then accumulates to a toxic level, leading to childhood dementia and death, according to nonprofit the Cure Sanfilippo Foundation.

 published on Spruce Biosciences’s website in August suggest its therapy reduced this sugar to “normal or near-normal” levels over a five-year span in cerebral spinal fluid by artificially replicating that missing enzyme.

Patricia Dickson, professor and chief of the division of genetics and genomic medicine at Washington University School of Medicine in St. Louis, told us these results suggest the drug is working.

“I think this is the best thing that is in the pipeline [for this disease],” Dickson told us. “It’s a very promising therapy.”

The drug also appeared to stop cognitive decline, according to the preliminary results, though patients didn’t seem to progress past the toddler-level cognition they had when they started treatment.

However, Rita Redberg, a cardiologist and professor of medicine at the University of California, San Francisco, who researches drug and medical device regulation, told Healthcare Brew via email she feels this data is “weak and preliminary.”

This data is not from a double-blind randomized controlled trial, she said, which is considered the most rigorous way to determine a cause-and-effect relationship. Instead, Spruce Biosciences’s research compared treated patients to untreated patients whose disease progression was tracked in a 

 has been peer reviewed, the full August data has not, and there isn’t a public timeline for when that might happen yet, Spruce Biosciences President and CFO Samir Gharib told Healthcare Brew via email.

Kim Hemsley, head of the childhood dementia research group at Australia-based Flinders Health and Medical Research Institute at Flinders University, told Healthcare Brew via email that she believes double-blind randomized controlled trials are “unethical” for rapidly progressing childhood dementia-causing disorders. In instances like this, she added, when the disease’s typical progression is well documented and predictable, there’s a very short window to intervene, and children might miss it if they’re part of an untreated control group.

 in journal Frontiers of Neurology notes natural history studies can be used as control cohorts when a placebo-controlled study would be “difficult or unethical.”

Before this upturn, Spruce Biosciences was struggling. After multiple drugs for rare endocrine disorders had failed, the company 

 over half its staff in April—an estimated $1 million expense.

Now, according to an Oct. 6 press release, the company plans to submit a biologics license application—a request to the FDA for permission to start marketing the drug—in Q1 2026.

An Oct. 6 report from investment banking firm Jefferies found about 72% of treatments that have gotten breakthrough therapy designation since 2013 eventually get FDA approval.

“On the basis of the data obtained thus far, I sincerely hope TA-ERT advances under the 

A doctor dispenses a pill from a prescription bottle for a patient, its trajectory forms a price increase graph.

The science behind the therapy that catapulted Spruce Biosciences’s stock 1,400% and counting

Spruce Biosciences saw its stock soar after months of decline, thanks to a new drug for a rare disease.

The science behind the therapy that catapulted a biopharma’s stock 1,400% and counting

Cassie McGrath

Wholesale giant Costco entered the GLP-1 chat earlier this month when it 

 it would sell Danish biotech Novo Nordisk’s weight loss medication through its pharmacies.

, Costco will offer Wegovy and Ozempic for $499 per month, a discount off list prices of $1,349.02 and $997.58, respectively, for patients paying out of pocket. The wholesaler’s announcement is the latest partnership in Novo Nordisk’s strategy to offer 

 for its diabetes and weight loss medications.

Pankit Bhalodia, partner at consultancy West Monroe, told Healthcare Brew he’s “not super surprised” Costco is selling discounted GLP-1s “given the 

” of the medication and the fact that direct-to-consumer (DTC) offerings are becoming more 

For one, Novo Nordisk already offers Wegovy and Ozempic through its own DTC site, NovoCare Pharmacy, also for $499 a month. It offered that price through partnerships with other big pharmacies like Walmart and its wholesaler Sam’s Club 

Rajiv Leventhal, senior analyst in digital health at research firm eMarketer, said Costco’s GLP-1 announcement is “important” but he doesn’t “expect a big market shift” because it’s available for $499 a month at these other pharmacies already.

The interesting part here, Leventhal added, is Costco’s partnership could raise awareness around affordable options for GLP-1s. Health research organization 

 54% of US adults who have taken GLP-1s struggled to afford them.

Soon, he said, when Costco’s 81 million members go shopping, they may see a sign at the pharmacy offering Ozempic or Wegovy and decide to drop the cash.

“That’s still going to be a price point that’s very unaffordable for a lot of people, but Costco customers and members do 

Still, it’s a good potential customer acquisition strategy for Novo Nordisk, Leventhal said, “because it’s tapping into a retailer that has a very, very loyal and large customer base.”

Overall, GLP-1s are getting cheaper, he added, because companies like Novo Nordisk and Eli Lilly, which makes GLP-1s Zepbound and Mounjaro, want to compete with the compounding market.

The compounding market includes companies like telehealth business 

, which are selling GLP-1s made from similar ingredients but aren’t branded, FDA-approved drugs. Hims & Hers are providing it for much cheaper, too, at $199 a month.

 these compounding companies for their advertising methods, but for now they’re still selling medications.

OK, that’s all your GLP-1 news—at least for the next 15 seconds.