Rite Aid’s RxEvolution strategy looks to combine the company’s pharmacy services, (specialty and mail-order, digital, and retail PBM) into an integrated business that will enable it to expand beyond its 17-state footprint to be a national provider of pharmacy in an omnichannel way.
Rite Aid’s pharmacy benefit management company, Elixir, experienced revenues decline nearly 11% to $1.9 billion in the third quarter of fiscal 2021 due to a planned reduction in the company’s Elixir Insurance membership, a decline in member utilization in the Elixir Insurance business and a previously announced client loss.
Elixir’s third quarter adjusted EBITDA was $28.9 million or 1.6% of revenues, a decrease over last year’s third quarter adjusted EBITDA of $48.8 million or 2.3% of revenues. The decrease in adjusted EBITDA is a result of the loss in lives and related earned rebates and an increase in the medical loss ratio.
Rite Aid is implementing a number of strategies to make up this shortfall, including closing 63 stores and improving PBM margins from its new rebate aggregation agreement with Prime Therapeutics. Rite Aid signed its new agreement with Prime Therapeutics after taking its entire book of business out to bid for all of the rebate aggregators in the market.
Takeaway: Rite Aid and Prime Therapeutics have discussed the new agreement to further partner and have an expanded relationship with some over time