Pharmaceutical Drug Rebate Aggregator with Disruptive Claim Processing Automation Software

Healthcare; Technology, Media, Telecom & Data
Client Code: BN000047898
Revenue (TTM): $52,173,239
EBITDA (TTM): $15,560,202

Innovative pharmaceutical rebate aggregator experiencing rapid revenue and profitability growth by leveraging its proprietary software platform to automate prescription drug rebate processing with minimal headcount in a $16 billion market.

Key Aspects
  • Listed on Inc. Magazine’s 5000 fastest growing U.S companies.
  • Software continuously provides strong visibility into future cash flows, up to six months in advance; thus management can confidently predict a TTM gross profit of $20.9m for the period ending 9/30/23.
  • Analyzing claim stack for missed rebate opportunities.
  • Assisting in formulary formation.
  • Identifying & correcting missed/invalid rebate claims.

Partner with larger firm to show a stronger balance sheet to win clients. The company has lost multiple large, “whale sized” opportunites where it beat other bidders on all aspects expect for presenting a large enough balance sheet.

Hire additional employees to capitalize on software’s capability to identify and capitalize on missed, forgotten, and untouched rebate claims within the industry and PBM food chain.

Hire marketing and sales staff to advertise the software to PBMs and increase rebate volume and percentage for current and new clients.

Commit resources to enrolling specialty pharmacies, a market segment currently overlooked by intermediaries. Specialty drugs yield the highest rebate amount per prescription and have risen to account for 55% of consumer spend. One fill can return a rebate as high as 100 retail fills.

Disrupt and eliminate expensive legacy business models that utilize hundreds of employees to manually review, process, and submit millions of rebate claims annually.

Integrate with existing larger companies to reduce labor cost associated with processing rebate claims.

Explore licensing the company’s proprietary software. Multiple parties have already approached the company to do so.

Identify and educate protentional new clients on specefic drugs rebates. Resulting in higher rebate amounts for the clients and the company.

Further develop software and relationship with clients by offering a POS feature to incorporate inventory and prescription management.

Generate recurring revenue by monetizing PHI-free patient health data already being captured by the company's software.

Achieve scale necessary to file claims directly to the drug manufactures and thereby capture additional margin.


United States

Current Markets

Market size in this industry is defined by the percentage of overall rebates paid by pharmaceutical companies in the United States each year. These rebates flow through a waterfall of intermediaries, primarily PBM’s, to the employer, health care plan, pharmacy, or similar end user. The closest available measure of the volume of these rebates can be derived from the pharmaceutical market’s total annual rebates. In 2021, the total pharmaceutical market is estimated at $603 billion before rebates of 27%, or $163 billion. As rebates flow through the intermediaries’ fees amounting to as much as 30% – 50% are taken. This creates a potential market of $82 billion for PBMs and other intermediaries.

The flow of rebates to larger end users in this market is controlled by three large PBMs. While they control 80% of the market, they have collectively shown little or no interest in winning the remaining tens of thousands/thousands of accounts, leaving over $16bn of potential gross profit to the hundreds of intermediaries that compete and/or cooperate with the company.

While the company’s solution would certainly be valuable to the higher end of the overall market and, management believes, is unmatched by any software used by those big three PBMs; focusing solely on the company’s existing market involving the smaller PBMs, self-insured employers, long term care facilities, and onsite/independent pharmacies as a stand-alone business constitutes an unprecedented opportunity for growth.

After putting a dedicated sales team in place, the company can accelerate its gains in market share by:

Acquiring, partnering with (i.e., sitting above in the chain of rebates), or licensing its software to the many small PBMs that populate this under-softwared industry.

More vigorously seeking out and contracting directly with a wider range of small to midsized PBMs or self-insured businesses that are not of size to attract the attention of the larger PBMs.

Moving beyond the company’s traditional vertical – health systems– into one or more of the three remaining pharma insurance verticals – Specialty pharmacy, government-provided, and medical rebates.

Real Estate

The current owners work remotely and meet in person on a quarterly or as needed basis. The company has no physical building and can be operated from anywhere.