Should Capital Rx prioritize expanding its pharmacy network for JUDI to increase coverage or focus on optimizing existing relationships for better pricing?

Introduction

The trade-off we're examining is whether Capital Rx should prioritize expanding its pharmacy network for JUDI to increase coverage or focus on optimizing existing relationships for better pricing. This scenario involves balancing growth with efficiency in a pharmacy benefit management context. I'll analyze this trade-off by examining the business context, user impact, technical considerations, and resource implications.

Step 1

Clarifying Questions (3 minutes)

• Based on the current market dynamics, I'm thinking coverage might be a key differentiator. Could you share how our current network coverage compares to our main competitors?

Why it matters: Helps assess the urgency of network expansion Expected answer: We're slightly behind in certain regions Impact on approach: Would prioritize targeted expansion in underserved areas

• Considering our revenue model, I assume we operate on a per-prescription fee basis. Is this correct, and are there any performance-based components tied to pricing or coverage?

Why it matters: Influences the financial impact of each option Expected answer: Mix of per-prescription fees and performance incentives Impact on approach: Would need to balance coverage expansion with pricing optimization

• Looking at user behavior, I'm curious about how often patients encounter out-of-network pharmacies. Do we have data on the frequency of these occurrences?

Why it matters: Indicates the real-world impact of network coverage on users Expected answer: Varies by region, but significant in some areas Impact on approach: Would focus expansion efforts on high-impact regions

• From a technical perspective, I'm wondering about the scalability of our current system. How easily can we onboard new pharmacies into the JUDI platform?

Why it matters: Affects the feasibility and timeline of network expansion Expected answer: Relatively straightforward, but requires some manual processes Impact on approach: Would consider technical improvements to streamline onboarding

• Regarding resources, I'm thinking about our team's capacity. Do we have dedicated teams for network expansion and relationship management, or would this require reallocating resources?

Why it matters: Determines the operational impact of each option Expected answer: Small dedicated teams, but would need additional resources Impact on approach: Would factor in hiring or training needs for either option