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A Digital Health Acquisition To Watch

Jan 13 2014, 8:51am CST | by , in News

 
 

RxAnte, which applies predictive analytics to medication adherence, became part of Millennium Laboratories in December. The companies are mum on details of the sale. Aberdare Ventures partner Mohit Kaushal, who invested in RxAnte while at West Health will only say “from an IRR perspective, it is amazing,” for an exit that occurred 15 months after RxAnte raised $4.5 million in series A funding from Aberdare and West Health. The start-up has “millions of dollars” in revenue coming from large payers and pharmacies, such as CVS Caremark, Coventry Health Care (part of Aetna), and WellCare Health Plans. It now monitors medication compliance for more than 8 million patients, since introducing its product in 2011.

The acquisition of RxAnte by a little-known, private equity-backed urine drug testing company may not generate last year’s excitement over UnitedHealth Group’s purchase of data analytics firm Humedica, but the growth potential for Millennium and its now subsidiary RxAnte is promising.

RxAnte addresses medication adherence, an issue costing $290 billion a year, according to a 2009 report by the New England Healthcare Institute. One out of three chronic disease patients risks complications and hospitalization, for failing to take drugs as prescribed. Based on several studies which establish a clear link between compliance and lower costs, the government now rewards health plans for boosting adherence of Medicare patients on blood pressure, cholesterol, and diabetes drugs. RxAnte has set out to prove its technology improves outcomes. Mining its customers’ claims data, it applies variables, ranging from past refills to the number of drugs a patient takes, to predict on a scale of 0 to 100% who is most likely to be non-compliant. This past July, it embarked on a pilot with Coventry to reach out to patients through their doctors or nurses. To remind patients to take their medications, health plans typically make calls and send letters. That strategy doesn’t always work, not least because patients don’t have a trusted relationship with their payer. RxAnte pinpointed at-risk patients and traced them to their doctor. Nearly 600 practices, ranging in size, agreed to enroll.

Motivating doctors was the promise of a bonus by the health plan based on the percentage of patients who stick to their drug regimen. “No one gets paid unless patients improve adherence,” says Aaron McKethan, RxAnte’s head of strategy and business development. Patients are considered adherent if they consume a minimum of 8 out of 10 pills prescribed over a period of time.

Through a web portal, the start-up provided daily information to health care providers on who to monitor, and suggestions to intervene and educate the patient. Someone taking a new cholesterol drug might have concerns about side effects; a patient discharged from a hospital, and taking a new medicine might be confused about it. The pilot concluded in December, and Coventry expects to release results this spring. RxAnte says participating health care providers performed significantly better than those who didn’t, and Coventry signed on as a customer as a result. “There’s a lot of hype around predictive analytics,” says Josh Benner, RxAnte’s president. “It’s one thing to tell the future, and another to tell how to change it.”

RxAnte was preparing to raise series B funds, when Benner got a call in July from Brock Hardaway, the CEO of Millennium, a six-year-old company with 1,300 employees. Although Hardaway won’t disclose revenues, Millennium is at the forefront of the rapidly growing business of monitoring pain medication for misuse, a cutthroat industry, involving suits and countersuits. Millennium itself is the target of a federal grand jury investigation for alleged fraud and intimidation of employees.

Hardaway, a former hospital executive, who joined Millennium this past year, wants to broaden the company’s testing business to potentially include heart disease and diabetes medications, as well as measuring a person’s metabolic response to drugs. Hardaway hopes RxAnte’s predictive tool will help the company target the right patients when testing. “We are in medication adherence,” he says. “We don’t view ourselves as a lab company.”

When asked how the seemingly aggressive culture of Millennium will mesh with RxAnte’s world of health care policy wonks, Hardaway says “we’re going to be aggressive to defend what we built, but it’s not a reflection of our culture.”

Source: Forbes

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