PHILADELPHIA — Last December Rite Aid named Chris DuPaul chief operating officer of Elixir, the company’s pharmacy benefits management business. It is a position for which his career up to this point has prepared him extraordinarily well, and his appointment could not have been timelier.

Chris DuPaul

Elixir is an important part of Rite Aid’s new strategy, the latest evolutionary stage of the RxEvolution strategy launched in 2020. RxEvolution aims to drive growth by transforming the nation’s third-largest drug store chain into a total health destination. As described by Rite Aid president and chief executive officer Heyward Donigan, the approach involves transitioning Rite Aid from a company with a number of loosely connected pharmacy parts to a business that leverages its retail pharmacy, specialty pharmacy, mail-order, digital and PBM businesses in ways that will enable it to expand beyond its current 17-state footprint to become a national provider of pharmacy across a number of channels.

At present, Elixir contributes about one-third of Rite Aid’s top line, but with a total PBM addressable market estimated by Rite Aid management at around $400 billion, the pharmacy services segment is seen as the company’s greatest opportunity for future growth. Establishing it as a clearly differentiated leader serving the middle market, consequently, is one of the three strategic pillars supporting RxEvolution.

Rite Aid acquired the PBM, which then was known as Envision Rx, in 2015 for about $2 billion. But it was only after Donigan was named CEO of Rite Aid in August 2019 that Envision Rx became a significant strategic focus for the company. It was rebranded as Elixir in mid-2020 to signal that it would be a fully integrated PBM combining technology solutions, mail order prescription and delivery, specialty pharmacy, prescription discount programs, network and rebate administration, and claims adjudication.

Recently, though, Elixir has encountered some headwinds. Membership growth has lagged expectations, and management has reacted aggressively, hiring DuPaul as well as other seasoned health care executives, assembling a strong sales team and partnering with Prime Therapeutics under a new rebate aggregation agreement to improve the PBM’s rebate economics (see story below).

DuPaul brings to his new role several years of experience in the pharmaceutical and pharmacy space, including nine years at CVS Health. His involvement with pharmacy goes back even further. A graduate of the University of Virginia and holder of an MBA degree from Virginia’s Darden Graduate School of Business Administration, DuPaul was recruited by Monitor Deloitte (formerly Monitor Group) out of business school to join the consultancy’s growth strategy practice.

It was there that his involvement with the pharmaceutical industry began, as he tackled such projects as developing a global positioning and payer strategy for a top-three pharmaceutical manufacturer bringing a type 2 diabetes compound to market as well as directing the consumer brand strategy for another pharmaceutical compound. It was, he says, a great experience.

“I was working with some of the largest pharmaceutical manufacturers on drug launches and life-cycle management,” he recalls. “At that level you can look down the entire value chain and really see how pricing impacts access to care. I spent a lot of time doing research with patients and prescribers, and that was really how I got my first glimpse at the impact that prescriptions and pharmacy care can have, not only on a patient’s life, but on the health care system. It revealed how the levers we pull can either give patients easy access to affordable prescriptions or make it very difficult for those people to get the care that they need. That really helped steer me toward spending the rest of my career in the pharmacy and PBM space.”

After four years with Monitor Deloitte, DuPaul joined CVS in 2008 as director of retail strategic product development. After two years he was promoted to senior director, with responsibility for strategic product development. This was around the time of CVS’ acquisition of Caremark Corp., and consequently DuPaul gained invaluable experience in the integration of a retail pharmacy chain and a PBM.

In 2013, he was promoted to vice president of enterprise product innovation and development, a role that gave him leadership of the development of health care products and services across both the retail pharmacy and PBM business units. After four years in that position, he was named vice president of pharmacy services, with responsibility for a portfolio of clinical products and services generating $4.5 billion in revenue.

With the perspective gained from that wealth of experience, DuPaul is optimistic about Elixir’s future. It has, he says, all the assets needed to give clients control over their pharmacy programs, including specialty and mail order pharmacy, a Medicare Part D business, Laker, an industry-leading adjudication platform, and population health services through a sister company, Health Dialogue.

“Our overall structure means that we are large enough to scale but we’re also flexible enough and nimble enough to deliver on a client’s requirements, even in nontraditional situations,” he says. “And being part of Rite Aid, with a network of approximately 2,500 pharmacies, gives us the strength to compete aggressively on discounts, rebates and DIR [direct and indirect remuneration] fees, and opens the door to that presence for an exceptional member experience.”

DuPaul points out that there are many regional health plans that are wary of the Big Three of the PBM industry (CVS Caremark, Cigna and UnitedHealth). Elixir is focused on serving that market segment and providing the kind of meaningful consultation that the biggest players may not be interested in delivering to small and mid-market clients.

“I think we’ll continue to push into being a more high-touch partner that helps our clients navigate the landscape with more confidence by helping them better understand the economics of their drug spend to get the most value, while also helping their beneficiaries get the medications that they need,” he remarks.

While much remains to be done to optimize Elixir’s performance, DuPaul is impressed by the progress made in recent months, and he points to several encouraging signs. First, the company has received 80% more RFPs (requests for proposal) in recent months than during the same period of 2020. Additionally, it has added 10 new clients, and is getting to the final competitive round 20% more often than last year, and is closing 50% of the opportunities when it gets to the final round.

Finally, Elixir is now executing a more targeted go-to-market strategy for the segments where it has a right to win, particularly health plans, health systems, employer groups with more than 1,000 lives, labor organizations and the public sector.

“This says to me that we are addressing and have fixed some of the issues that were keeping us from getting into the game, and that the value proposition we offer is extremely compelling,” he says.

“This organization has made tremendous progress over the past year, but we still have a long way to go,”he adds. “Some of that progress is going to come from enhancing our systems; some of it is going to come from changing the way we do things, including introducing new technology into certain processes. And the last part is going to come from our people.

“We are committed to creating a culture of continuous improvement, and we are continuing to push decision making down into the organization to the colleagues who are closest to our customers.”

DuPaul is clearly enjoying the challenge of helping Elixir realize its potential, and he continues to find great satisfaction in working in the pharmacy industry, and in the value it brings to society.

“I believe deeply in the power of pharmacy,” he says. “It’s remarkable that we have a clinical intervention that, for so little money, can do so much good in halting the progression of chronic diseases.

“When we do our jobs well, people get access to prescriptions that improve outcomes and lower the cost of care. It’s a remarkable industry where you can have that kind of impact every day.”

Agreement expected to give PBM a boost

PHILADELPHIA — The rebates that pharmacy benefits managers obtain from drug manufacturers for their prescription drug prices are a key part of their offering to potential clients and a vital competitive asset in winning new business.

Consequently, when Rite Aid recently acknowledged that its PBM subsidiary, Elixir, has not met its membership growth targets because its rebates were uncompetitive, management responded swiftly and decisively, forming a partnership with Prime Therapeutics LLC, a rebate aggregator that is part of the huge group purchasing organization (GPO) Ascent. Rite Aid’s new rebate aggregation agreement with Prime is expected to improve its rebate economics and make it more competitive in bidding for new member clients. That move should help Elixir get back on the growth track.

According to Chris DuPaul, chief operating officer of Elixir, rebates are one of the most important ways a PBM serves the health care market and also probably one of the least understood. “As list prices for prescription drugs have continued to grow, the ability to provide the highest possible rebate value is critical to lowering the pharmacy cost for PBM clients,” he explains. “Maximizing the potential rebate value is critical to retaining existing clients and to winning new business. As a PBM, you have to do that.”

Traditionally, he points out, PBMs have contracted directly with drug manufacturers based on their formulary designs and the claims volume recorded in their book of business. But the emergence of scaled rebate aggregation models has greatly increased the leverage of aggregators and their access to GPOs like Ascent and Zinc, a GPO launched by CVS Health in 2020.

“While exceptions exist, for the most part, access to manufacturer rebates through these larger GPOs results in a significant improvement in value over that of a smaller, mid-market individual PBM,” DuPaul says. “Last year Elixir engaged in a competitive evaluation of several aggregators, and that has allowed us to capture significantly higher rebate values. And that in turn has translated into much more competitive rebate guarantee pricing that we can offer in the marketplace.”