Q2 2023 Progyny Inc Earnings Call
Yeah.
Good day, everyone and welcome to the progeny, Inc. Second quarter 2023 earnings call.
At this time, all participants have been placed on a listen only mode and we will open the floor for your questions and comments after the presentation.
It is now my pleasure to turn the floor over to your host James Hart, Sir the floor is yours.
Thank you Matthew and good afternoon, everyone welcome to our second quarter Conference call with me today are Pete and FTE CEO progeny, Michael <unk>, our president and Mark Livingston CFO , we will begin with some prepared remarks before we open the call for your questions before we begin I'd like to remind you that our comments and responses to your questions today.
<unk> management's views as of today only and will include statements related to our financial outlook for both the third quarter and full year 2023, and the assumptions and drivers underlying such guidance the demand for our solutions our expectations for our selling season for 2024 launches anticipated employment levels of our clients and the <unk>.
<unk> that we serve the timing of client decisions are expected utilization rates and mix the expected benefits of our pharmacy program partner agreements, including future conversion of adjusted EBITDA to operating cash flow the potential benefits of our solution, our ability to acquire new clients and retain and upsell existing clients our market opportunity.
<unk> and our business strategy plans goals and expectations concerning our market position future operations and other financial and operating information, which are forward looking statements under the federal Securities law actual results may differ materially from those contained in or implied by these forward looking statements due to risks and uncertainties associated with our business.
As well as other important factors.
A discussion of the material risks uncertainties assumptions and other important factors that could impact our actual results. Please refer to our SEC filings and today's press release, both of which can be found on our Investor Relations website any forward looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new.
Information or future events during the call. We will also refer to non-GAAP financial measures such as adjusted EBITDA and adjusted EBITDA margin on incremental revenue more information about these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures are available in the press release, which is available at investors <unk> Dot Com I would.
Now I'd like to turn the call over to Pete.
Thanks, Jamie and thanks, everyone for joining us this afternoon.
Pleased to report that project had a very solid second quarter highlighted by record quarterly revenue of $279 million or 43% growth over the second quarter of 2022.
The strength in this quarters result reflect that member activity continues to be healthy further affirming that only the essential nature of facility care, but also the strong desire amongst members to pursue the appropriate medical treatments they need in order to realize their family building goals and.
In addition to the strong top line performance. Our continued focus on operational excellence also produced our highest ever quarterly adjusted EBITDA and quarterly cash flow as well.
Sure. We've entered the second half of the year with positive momentum across all the areas, we look to when measuring our progress and.
In addition to our strong financial performance, we continue to deliver to our customers the benefits of value based care because of our clinical outcomes and member experience.
Lastly, based on what we're experiencing in our current selling season to date, we're continuing to see higher employer demand for fertility and family building solutions.
Last month, the CDC released its annual outcomes data on the utility industry in the U S. Reflecting treatments completed through the end of 'twenty one.
For the seventh straight year projecting a significantly outperformed the national averages across every relevant benchmark for success. As a reminder, project and is the only solution that is doing comprehensive outcomes reporting reflecting virtually every treatment for every member across all relevant metrics Youll see these results ripped.
<unk> and our second quarter 10-Q.
Since launching our solution in 2016, we've consistently achieved higher pregnancy rates higher live birth rates lower rates of miscarriages and significantly fewer multiple births, our superior clinical results not only create a better member experience as they ensure members avoid unnecessary treatments and painful comps.
<unk>. They also drive cost containment for our clients given that project team members on average require fewer treatments in order to get to the desired outcome of healthy baby.
A closer look at the data highlights a key measure of how do we deliver this value to clients and IVF journey entailed to procedures, a retrieval followed by a transfer the retrieval portion and the related medication represent a substantial majority of the overall cost for IVF.
It's also a much more physically gruelling for the patient and the transfer is so desirable to get to a wide berth with as few retrievers as possible.
While our live birth rate is 27% the national averages more importantly, our average number of retrieval is provide birth is now 36 present better than national averages. This means that the average project any member needs only 2.2 retrieval to achieve live birth versus the national average of three five.
The difference of more than one full retrieval, which represents substantial avoidance of cost for our clients as well as significantly less physical and emotional stress on the patient.
While other facility solutions may continue to employ blood utilization management techniques in an attempt to contain costs, we actively manage the benefit across our network leveraging our vast data set to deliver the most efficient clinical pathways for our members and demonstrated cost containment, which controls the client's expense.
Where it has the largest impact while still delivering the best member experience in the form of the most favorable clinical outcomes.
Turning now to the demand we're seeing in the market the factors, helping support our momentum are being noted in the latest research from health authorities and the benefit consultants on.
On last quarter's call we reviewed the world Health organization's latest research, which will yield an increase in the prevalence of infertility from one in a just a few years ago to one out of every six people of reproductive age today.
While there are a number of factors driving this the societal trend in pursuing family building until later in life when conception becomes biologically more difficult plays a significant role.
Turning back to the latest CDC data for a moment our cycles have not only continued to grow at a compounded annual growth rate of 10, 5% over the last decade, but volumes are actually accelerating to a compounded annual growth rate of 11, 8% over the past two years alone.
This growth has occurred despite the impact of the pandemic, which significantly suppress utilization and nearly every other health care category.
Looking at this data another way in just one year the percentage of babies conceived through assisted reproductive technologies increased from 2% to two 3% in the most recent period, which represents the largest year over year increase ever.
We believe this is driven by the increased incidence and prevalence of the condition as reported by the WH out as well as continued adoption of fertility benefits by more and more employers. So adoption is still well behind where it needs to be when taking into account the latest incidence and prevalence data reported by the <unk> and CDC.
While Andy coverage is helping to increase access. We're also seeing more employers looking to eliminate health disparities through comprehensive and equitable coverage such as our solution.
In fact, according to Mercer nearly two thirds of large employers report they are planning to make enhancements to the health and wellbeing coverage in 2024.
Of the other one third daily all reported that they had already made those enhancements within the last few years.
Their study also reveals that 78% of large employers said they are looking to improve the health equity in their plans, including initiatives to support diversity equity and inclusion.
This continues to be yet another tailwind for us as the project. The benefit was specifically designed to provide equitable coverage for all types of journeys to Parenthood, and our focus on providing culturally competent care throughout the member journey makes our solution all the more relevant to employers.
This data reveals that the macro trends that have been driving our growth remains fully intact and illustrate why do we see higher employee employer demand for fertility and family building solutions and our current sales season.
As in every sale season, our priorities are to expand our market share by adding new clients to retain existing clients, who are in their renewal year and to grow our relationship with clients through expansions and upsells.
I'll spend just a moment and each of these areas to help you understand our progress.
First new client acquisitions have always represented the largest contribution to our year over year growth.
And every season, we see opportunities to grow by taking existing market share by winning clients, who already have a fertility benefit most offered through their managed health plan and also to expand the market with clients, who are adding fertility coverage to their health plan for the first time.
Over the last two selling seasons, our success has been equally divided across both groups as our solution appeals to both types of buyers.
There is over 8000 large self insured employers in the United States and as of today, we have less than 5% of those as clients. So we're in we're in the various earliest stage of addressing the market and we continue to see significant opportunities for ongoing expansion.
We're now in the heart of our selling season, and our pipeline continues to be favorable relative to where we were at this time last year. We're also continuing to add to our pipeline as companies he's followed their own timetable and evaluating new benefits.
Also at this point in the season, we've already received a healthy number of early commitments, which as in past seasons have come from abroad section.
Broad cross section of industries. These include leading brands in manufacturing healthcare financial services, automotive and automotive and professional services to name just a few <unk> and.
And even though this is just our first full year of targeting Taft Hartley groups. We're also seeing strong demand as well as early commitments from labor Union populations.
Thus far these early commitments are choosing comparable levels of coverage to what we've seen in the past seasons and we're also continuing to see a high take rate on projecting Rx.
Both of which indicate the buyers are fully committing to their coverage.
While early commitments are one indicator of demand we expect the majority of client decisions will come in September October timeframe is thats. When most companies are finalizing their benefit decisions ahead of their open enrollment activities in the fall.
And any salary season, our goal is to grow the absolute number of new clients and covered lives over what we've achieved in the prior season and with the results. We've achieved so far we're pleased with where we are and believe we're on pace on pace to meet this objective once again.
With respect to renewals the early activity. Thus far has been consistent with our typical high retention rates and upsell activities positive. This includes services like <unk> Rx as well as expanded coverage to additional smart cycles or other services like surrogacy or adoption.
We also made progress in expanding our solution with our services that our clients and members would expect to receive from us, particularly ones that leverage our experience and cultivating networks of specialized providers, increasing access to care and managing the patient experience to improve outcomes and providing concierge experience.
For example, we continued to enhance our mail and fertility solution, which launched earlier this year.
And we're pleased to release, our next service expansion to address menopause, which is one of the least addressed and understood conditions in women's health, but one that is increasingly becoming a priority for employers.
The Mercer study I mentioned earlier reported that menopause had the fastest growing support amongst employers with a more than threefold increase and companies looking to expand their coverage for 2024.
And it makes sense for this to become a high priority given that more than 40% of women in the workforce today are over the age of 45% and more than 1 million women in the workforce experience menopause symptoms annually incurring billions of dollars lost and productivity indirect medical costs. According to the Mayo clinic.
While our <unk> coverage is broadly available through the health plan. This is an area that's been underinvested and historically as most Ob gyn and primary care providers arent, receiving the necessary training to recognize and effectively treated symptoms.
Unfortunately leaves many women unsupported as they look for solutions.
We're excited to help address this by creating a network of specialized providers of menopause care with many health and <unk> the premier virtual platforms in this field as our first partners in this area.
For an additional nominal fee <unk> projecting clients can provide their employees with access to convenient personalized treatment that addresses nutrition mental health and hormonal health, which build on the comprehensive concierge support our members already received to navigate their fertility journeys.
And these services will be integrated with the health plans of our clients ensuring full coordination across all aspects of the member's health care.
We believe adding these services continues to raise the bar for what employers should expect from their benefit providers and further advances progeny is positioned as the industry leader in women's health solutions.
Let me now turn the call over to Mark and he'll go over our results Mark. Thank you Pete and good afternoon, everyone. I'll begin by taking you through our second quarter results and then provide you with our expectations for both the third quarter and full year.
Revenue in the second quarter was $279 4 million, reflecting growth of 43% the growth versus the prior year was primarily due to an increase in the number of clients in covered lives as compared to the year ago period.
We had 384 clients with at least 1000 lives as of the end of the second quarter, representing an average of $5 3 million covered lives for the quarter. This compared to 273 clients and an average of $4 3 million covered lives a year ago, reflecting approximately 25% growth in lives over the prior year.
<unk>.
As expected a handful of clients launched during the second quarter. So these were relatively smaller accounts.
Several months ago, a number of high profile companies announced planned reductions to their workforce for late 2022 and 2023 some.
So not all of those companies are private clients and in most cases these were relatively modest reductions when compared to their overall.
While we did see an impact from workforce reductions at some of our clients in the second quarter. The level was consistent with what we had expected and that impact has continued to be offset by other clients that have been expanding their organizations either through additional hiring or M&A.
This dynamic is consistent with the Labor Department data this year, which has continued to show an expansion of jobs across the economy as well as unemployment that is remains steadily below 4%, which is meaningfully better than what many thought it would be as of mid 2023.
Following the close of the quarter several additional clients launch their project any benefit taking into account the launches that took place in July and over these first few days of August we have over 390 clients today, representing more than $5 4 million covered lives.
This is also consistent with what we had expected to see and we continue to believe that our covered lives will remain at approximately $5 4 million over the balance of the year.
Looking at the components of the topline medical revenue increased 36% over the second quarter last year to $173 million due again to the growth in our clients and covered lives while pharmacy revenue increased 56% in the quarter to $107 million I'll remind you that our higher growth in pharmacy revenue.
Continues to be driven primarily by an increase in the number of clients with the integrated solution as of this as of this time a year ago, approximately 84% of our clients at <unk> or 90% of our clients today do.
Turning now to our member engagement metrics approximately 14800 art cycles performed in the second quarter, reflecting a 42% increase as compared to the second quarter last year.
The female utilization rate, which most closely corresponds to our financial results was <unk> five zero percent. This quarter, an increase from four 4% a year ago and a modest increase sequentially from the four 8% in the first quarter of this year.
Utilization rates can vary from period to period due to a number of factors, including the timing of new client launches the time of the year and demographic mix. Nonetheless, we believe the engagement in the current period is reflective of both the high priority members placed on family building as well as the increasing need for treatment given the growing prep.
Elizabeth fertility as measured by the World Health organization.
We also believe that the second quarter reflects a small amount of member activity that was slightly pulled forward likely due to that populations pursuit of other commitments in July and August like vacations.
Turning now to our margins gross profit increased 38% from the second quarter last year to $60 6 million, yielding a 21, 7% gross margin.
As compared to the year ago period, gross margins decreased 80 basis points, reflecting the impact of planned cost containment efforts that were shared with our clients as well as incremental investments in care management resources.
While healthcare and employers adult pressures from medical inflation on unit costs, we're pleased to be able to leverage our growing scale to hold our rates constant and even pass along unit cost savings in certain circumstances. As we believe this provides a further differentiation in our model.
Looking across the first half of the year, our gross margins have expanded by 130 basis points over the gross margin in the first half of 2022, reflecting the efficiencies that we've continued to realize through our economies of scale.
As we look to the back half of 2023, we expect that our gross margins will reflect the typical level of incremental investment that we made to add care management personnel in advance of the new client launches and the subsequent year.
Sales and marketing expense of five 5% of revenue in the second quarter, an improvement from the five 9% in the year ago period as.
Once we have made to increase our go to market resources were more than offset by the leverage we continue to gain through client acquisition and retention.
G&A costs were 10, 8% of revenue this quarter as compared to 12, 1% in the year ago period.
The 130 basis point improvement is primarily due to the ongoing efficiencies in our back office operations, reflecting the inherent nature of our expanding margins on G&A as we grow revenue these efficiencies more than offset higher noncash stock based stock based compensation expense.
With our strong revenue growth and the operating efficiencies that we've realized throughout the business adjusted EBITDA grew 44% this quarter to $47 5 million.
Adjusted EBITDA margin of 7% this quarter was up slightly from the year ago period.
Over the first half of the year, our adjusted EBITDA margin on incremental revenue was 21, 2%. We continue to believe this measure is useful as a forward indicator of where the business is capable of moving as it highlights our high rate of margin capture as we expand the business.
Net income was $15 million in the second quarter or <unk> 15 per diluted share this compared to net income of $8 8 million or <unk> <unk> per diluted share a year ago.
Higher income in EPS as compared to a year ago, primarily reflect operating efficiencies realized in our higher revenues, which was only partially offset by higher stock comp expense and higher tax expense in the current period.
Turning now to our cash flow and balance sheet operating cash flow for the quarter was $76 million, which compares to $19 2 million generated in the year ago period.
This significant improvement is primarily due to the impact of new terms, we've reached with our pharmacy program partners as well as the timing of certain working capital items.
Many of you will recall that we announced new pharmacy program partner agreements back in 2021.
We are pleased to share that we have renewed and extended some of those agreements not only with favorable unit economics, but we also accelerated the payment receipt terms on one of our rebate agreements from 150 days to 90 days.
As a result of the shorter terms, our cash flow for the second quarter reflects a one time catch up receipts and our AR balances now only reflects just one quarter of rebate receivables related to this agreement.
Under these new terms, we don't anticipate the same working capital use that we've been seeing for the past two years as it relates to this receivable and we would expect to see our conversion of adjusted EBITDA to full year operating cash flow improved from the mid 60% range that it had been coming into this year to me.
70% for 2024 and beyond.
We anticipate that the initial unwinding of the working capital will provide a greater benefit for our expected 2023 cash flow conversion.
As of June 30, we had total working capital of $367 million, including $283 million in cash cash equivalents in marketable securities and no debt.
Turning now to our expectations for the third quarter and full year 2023.
Given our strong first half results. We are pleased to be in a position to raise our guidance again for 2023, it's worth noting that these ranges reflect a normal level of seasonality that we typically expect to see with member activity over the peak of the summer when outside commitments like family vacations and travel take priority for certain members.
And as a reminder, last year there were a number of outsized early an off cycle launches, which muted the seasonality that we ordinarily see in the summer months.
For the full year, we are raising the range and now expect revenue to be between 1.0 75 billion to 1.09 billion, reflecting growth of between 37% and 39% or 38% at the midpoint.
We are also raising our guidance on profitability, we now expected adjusted EBITDA of between $183 million to $187 $5 million.
For net income, we now expect between $51 2 million to $54 3 million or between 50 and 53 earnings per share on the basis of approximately 102 million fully diluted shares.
Our net income projections do not contemplate any discrete income tax items, including any income tax benefit related to equity compensation activity.
To the extent that activity occurs we will continue to benefit from those discrete tax items throughout 2023.
At the midpoint of this guidance, we are expecting to see the continued expansion of our margins in 2023 with adjusted EBITDA margin on incremental revenue of more than 20%.
For the third quarter, we are projecting revenue between $268 million and $273 million, reflecting growth of between 30% and 33%.
For the third quarter adjusted EBITDA, we expect between $44 7 million and $46 2 million along with net income of between $9 $5 million to $10 5 million or between nine and 10 cents earnings per share on the basis of approximately 101 million fully diluted shares.
With that we'd like to open up the call for your questions. Operator can you. Please provide the instructions.
Certainly everyone. At this time, we'll be conducting a question and answer session. If you have any questions or comments. Please press star one on your phone at this time we.
We do ask that while posing your question. Please pickup your handset if you're listening on speaker phone to provide optimum sound quality.
Once again, if you have any questions or comments. Please press star one on your phone.
Your first question is coming from Michael Cherny from Bank of America. Your line is live.
Afternoon Gratulation.
Another great quarter.
I just want to make sure I heard everything right.
Mark you talked about the <unk> performance I think you used the term pull forward, but then the guidance talked about seasonality I just read the outperformance and the timing is.
Nothing about seasonality I want to make sure that we understand exactly the dynamics of how you think about.
What happened in <unk> and the performance relative to what you would typically expect of the seasonality of your business.
Yes, so for Q2, certainly utilization was healthy.
Were sort of pointing out that we.
Aleve that theres, some slight pull forward potentially utilization for the July August timeframe, it's something that we see typically.
So when youre looking at Q3.
Remember last year, we had a significant number of launches that.
We're early that we're not really seeing in this particular year, so that sort of.
Summer.
Is this just the the.
The comparison versus Q2 tends to be a little bit more on par is obviously our guidance is indicating that was a little bit obfuscated by those launches last year, so but again, it's really looking at the full year and what we see in Q4 and beyond and again. The overall utilization has remained really healthy.
We're just making sure that people can be focused on the dynamics of how that third quarter seasonal piece.
It relates to what we're seeing in Q2 and for the balance of the year.
Okay, but nothing abnormal that you would typically see in a normal year, which I know again, we haven't had in a while in terms of that dynamic between <unk>.
Yes, no Mike the short answer is you are right it is normal seasonality.
A look back in 'twenty. One you saw this a little bit. So you saw a dip in Q3 versus Q2.
But by the end of Q3 and into Q4, it ramps back up its normal so you're absolutely right.
Perfect and then my other question.
Obviously, the cash flow catch up is great, but your cash flow has been building as you go pretty healthy level on the balance sheet no debt what are the plans for the cash.
The plans continue to be to look for opportunities.
<unk>.
Whether it's in the space or expanding into Adjacencies haven't identified any yet, but we will get to keep our powder dry.
Relative to the cash we have in the balance sheet and the good news is.
At least.
Weights are now favorable and so as that as the cash sits there and at least <unk> favorable treasury rates in the interim until we identify opportunities to deploy it.
Perfect. Thanks, so much congrats again.
Thanks, Mike.
Thank you. Your next question is coming from Scott showing Haas from Keybanc. Your line is live.
Hi team congrats on the record quarter, Pete Thanks for providing those project any acreage fever stats versus the national average for in order to get to a live berthing that puts your success in context.
So I just wanted to ask about the new wins and pipeline you noted in the release and in your prepared remarks that the pipeline is up versus last year and then you mentioned.
<unk> that the mix was equal between employers with existing fertility solutions and those without I think I got that right just curious about the competitive market.
Versus this time last year from those that you are converting away from our current fertility provider.
Just to clarify when I referred to the.
Greenfield versus brownfield I was really talking about the last two sales wholesale seasons. This sales season is early in terms of of giving that kind of commentary, we'll give that color relative to this sales season.
When we report.
In November .
Wholesale season.
So just one clarification overall the environment is.
Yes.
I would say about as competitive as it was last year sort of no no more no less bigger opportunities because you have more competition small ones usually have less we still.
Compete.
Generally across the board when you look across all of the accounts primarily with with the.
The carriers the payers across the country managed care, but certainly competition in this space continues and I would say relatively comparable to last year.
Great. Thanks, Pete for that color and then on the gross margin side you noted.
Sort of.
Giving back some to the client is that a way for you guys to also ensure that.
You are being competitive in the market just kind of walk us through those dynamics.
And how we should think about gross margins I guess.
And longer term thanks, Scott so the gross margins.
It does give us a competitive differentiator for a couple of reasons a lot of the other competitors in this space are usually pricing off of pricing that the clinics. So X percent off are usually also doing an overlay of what's.
Renting somebody else's network and so as a result.
Dealing with the reality that health care inflation is real.
For us.
Part of what we do in terms of benefit to our clients is a combination of all.
Cost containment measures and one of them is to the extent that we can take advantage of of our growth.
And be able to keep cost constant or <unk>.
Bring unit cost down and we do that really important the other piece of it as I highlighted on the call is is making sure that our version of utilization management is the smartest version that does that create the best member experience, but delivers real value and real cost containment in the form of Av.
Really favorable live birth rates per Retrievable as an example.
All the other clinical outcomes that we talked about those are the really important ways to do that as opposed to sort of traditional blunt instrument.
<unk> management techniques. So so it all sort of goes into the mix of continuing to differentiate ourselves.
And deliver value to our existing clients as well as.
Being able to position ourselves well for prospective clients.
Thanks.
Thank you. Your next question is coming from Jelen dressing from Truest. Your line is live.
Thank you I actually wanted to ask about any update on your reimbursement discussions clinic partners.
So is that all in health care in general inflation have you seen any pressure on cap rates from them if that happens how much flexibility do you have in terms of passing on these increases to your employer plans.
So it is not happening.
It's not happening anymore than normal.
Every year as you might imagine negotiations.
They start one more.
And we talk about.
We use data as we have these conversations and talk about how much business routing for them et cetera, and so ultimately come out.
Where we've been coming out on a net basis based on our history, So theres nothing more happening relative to that.
So so but answering the second part of your question to the extent that that does happen.
We do have the ability and flexibility to raise rates with our clients.
So we have been successful in not doing that and we've been keeping unit costs flat to down and this year is no different.
But we do have that flexibility contractually with clients to be able to to raise rates should we need it.
And my follow up on a quick question rich.
We've got some investor recently that on fraud, and the Onyx and I know rebates play a crucial role in that business just curious with all the noise and scrutiny around rebates with Pbms I know youll be named as a unique and focused focused on niche a niche area do you see any concerns in that business model, if there's more scoped.
EBIT for premiums in general.
We I don't have one yet.
I say, yes, I mean, we're not experiencing sort of at that same type of activity your questions around it remember our model is very different we don't we don't have a traditional model, where we're where we're collecting and giving rebates back for us.
Everything is part of the pricing that we do at the point of sale. So the member can also enjoy the benefit of it and.
And that model has been performing for us and continues to perform for us.
So it is one of those areas that we've been hearing about for many many years.
We'll see what happens, but we're not concerned.
Alright, thanks, guys congrats on a good quarter.
Thanks.
Thank you. Your next question is coming from David Larsen from <unk>. Your line is live.
Hi, congratulations on the good quarter.
Just wanted to confirm what I think I heard you are not seeing any slowdown in the market.
Are you hearing any client or any of your sales people talk about belt tightening <unk> <unk> or just can you provide any color or thoughts or comments on.
How clients might view the fertility benefit is it potentially.
Is it a potential area of savings reducing that benefit for employers in the event of a recession just any color there would be helpful.
Yes, I think Michael sure Michael close to the Salesforce easier to handle that.
So thanks for the question.
At the end of the day facility from a value perspective operates the same way that that the rest of Ontario's it's about <unk>.
Delivering a great member experience delivering great quality and controlling costs.
That's no different today than it has been in the last several years.
To the last sort of final question, we have some good levers that we've been able to pull in and keep down from.
A unit cost perspective.
We will continue to do that in the market as we go through the selling season and into the retention business for their clients.
Okay, and then can you just comment on the Pea that PVM itself like why why would somebody use your pharmacy benefit like couldnt. They get the same rates with medco or Cvs or optum or is your pricing better I would think that with their scale. They would have very competitive prices on these drugs can you.
Maybe give some color around that please.
There's a couple of factors to it right. One is it's about the whole member experience and how we sell it first.
Having a single authorization.
So that cycles are never delayed because cycles are tied closely to a woman's menstrual cycle.
And so and so that's one big wrinkle that that gets avoided. It's also about the fact that we deliver we're the only.
Company I know a PVM that serves.
The facility space that has a waste management program, where we are in conjunction with R. R.
Network of providers are dispensing more than one time throughout the treatment cycle, so that whenever over dispensing visa b.
Dosing instructions versus what happens traditionally which is you've got your day, one dosing construction and then 80% of the time that is going to decline as you go through the cycle, but the prescription is written for the full 10 days at that day, one right. If you will and it's all of the space and so we have we've been achieving somewhere in the 12.
The 14% range of less dispensing without waste management program, that's huge savings because all these drugs are our specialty drugs. The last piece is that we are competitive from a pricing perspective, despite the size of the other pbms because they're bigger in general, obviously, but where we are.
Big in this space and continue to grow at a rapid rate and go to our partners with business cases that that that gets us competitive pricing. So that's not an issue.
Okay. So it sounds like by using your ppm, Theres, a higher quality of patient care higher quality of service and that obviously leads to better outcomes more effective birth rates ultimately lower costs and better clinical care.
Okay, and then just one last quick one.
We've been hearing about like maybe in kind body. It seems like it's a very competitive space.
At a high level, what's the key differentiator between <unk> and a handful of your peers your competitors.
The key differentiator.
Is that.
We are directly contracted with our entire network as a result of being directly contracted with our entire network we get.
A tremendous amount of data on every one of our patients, including what I just described.
Has the ability to manage the waste management program that otherwise without that relationship you wouldn't be able to do.
Get a significant amount of data points on the entire journey and are in a position to.
Sure.
Monitor and manage adherence to best practices that ultimately drive the clinical outcomes that we get it's pretty significant and it's also why we're the only <unk>.
As a provider in this space that reports outcomes in every one of their patients.
And they are in our SEC filings as well and has also been validated by.
Third parties in terms of melamine and so overall, it's pretty significant demonstrated at scale ability to deliver value based care in this space that is really second to none and so.
There is detailed in the approaches, but that's the high level significant difference.
Okay, great. Thanks, very much congrats on a good quarter. Thank you.
Thank you once again, everyone. If you have any questions or comments. Please press star then one on your phone.
Please hold while we poll for questions.
Thank you that concludes our Q&A session I will now hand, the conference back over to.
James Hart for closing remarks.
Matthew So thank you everyone for joining us today.
If you do have any follow up questions. Please be sure to reach out to me at any time, otherwise we will look forward to speaking with you again in a few months' time.
Yes.
Thank you everyone. This concludes today's event you may disconnect at this time and have a wonderful day. Thank you for your participation.