Bain Capital Ventures led the second round of funding for Kalderos, netting the health tech start-up $28 million.
A little more than a year ago, Kalderos raised $7 million in a Series A funding led by Mercato Partners, allowing the company to expand its 14 person team to 56 by the end of 2019. Mercato Partners, which led Kalderos’ Series A in 2019, also participated in the Series B funding.
The additional 42 employees hired after the Series A funding should count themselves quite lucky; Kalderos was recognized in January, 2020 by Built In Chicago as one of the best places to work in Chicago, one of the best small companies to work for and one of the best-paying companies.
“When you’re starting a company, you’re not only setting the direction for your business’ goals, but you’re also obligated to create an environment and foster a culture,” noted Jeremy Docken, CEO, and co-founder of Kalderos. “We’re all quite proud to be recognized for the culture we’ve collectively built.”
The 56-person company wants to double the size of its team over the next two years, hiring more engineers, product managers, and designers.
Kalderos is the Chicago-based developer of a health tech platform that assists patients, pharmaceutical companies, and healthcare providers manage drug discount programs.
Founded by Jeremy Docken in 2016, Kalderos put together AI and data libraries to detect problems in the financial dealings between insurers, pharmacies, payers, and manufacturers.
Kalderos is a pharmaceutical audit platform working closely with ten out of fifteen of the largest drug manufacturers. Kalderos connects those drug manufacturers to more than 2,500 healthcare providers nationwide.
The Kalderos AI can detect problems such as data entry mistakes and with data obtained from drug manufacturers, the Kalderos platform can glean through the terms and conditions of each party’s discount programs to distribute the funds as they should be. Just last year, Kalderos identified nearly $100 million in duplicate discounts.
Pharmaceutical companies routinely discount drugs; however, keeping track of which discounts each party in the healthcare system qualifies for becomes very complicated. One estimate indicates that $8.5 billion in misdirected discounts were given in just one year.
Currently, drug discounts are only applied between businesses; these discounts do not benefit the patient. However, as legislation is introduced to have these discounts directly benefit the patients, Kalderos believes it’s even more critical to have a fully functional discount system.
“Our system is designed so that discount dollars can flow through to the patients, if that’s where the legislation takes us,” Docken said.
The 340B Drug Pricing Program was introduced in 1992 as a federal government program. It requires drug manufacturers who participate in Medicaid to provide eligible health care organizations outpatient drugs at greatly reduced prices. While the 340B program intends to keep prices down for the government, care providers and patients, the implementation of the program can be quite complicated.
“Kalderos has been a leader in the effort to restore compliance with 340B,” said Steve Zielinski, Kalderos director of industry relations. “To ensure the continuing benefit of the 340B drug pricing program, we must work in collaboration with all involved parties, drug manufacturers, covered entities, pharmacies, and state Medicaid agencies. We must empower each other with the necessary tools and information to resolve key compliance challenges.”
The company plans to launch a 501(c)(3) nonprofit that will assist underprivileged patients to afford the drugs they desperately need. “We’re really looking into being able to provide help to those patients that tend to fall through the cracks,” Docken said.