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Healthcare costs for employers continue to skyrocket with no end in sight. Here in the US, we have put ourselves in an untenable position with very few solutions in the market that actually bend the curve. Look at where the cost is growing and the picture is hard to miss: pharmacy is the fastest-growing line item in American healthcare, and the overwhelming majority of that growth has nothing to do with new science.
Instead, it’s about misaligned incentives and a lack of understanding. More often than not, the party choosing a patient’s medication is not thinking about the site of care, the drug’s price, or the downstream costs. This lack of understanding means billions of plan sponsor dollars get wasted every year.
Ben Ryugo, CEO & Founder, spent years at Included Health, where he sat inside one of the most operationally complex care navigation businesses in the world and saw these misaligned incentives around medication from every angle – payer, employer, member, and provider. He lived and breathed this problem on a daily basis, without a clear solution. Tokaido Health is changing that.
Tokaido Health is an AI-native medication steerage platform anchored in behavioral economics. In its simplest form, the company identifies same-or-better medications that cost less, and pairs those recommendations with incentives that compel members to actually make the switch. They deliver a clean and simple value prop to employers, while also delivering a better experience to patients.
AI now enables Tokadio to do this work at member-level granularity. Unlike navigation platforms of the past, this is not about building a static rules engine bolted on top of a benefits portal. To properly navigate a patient through any medical journey, the platform has to reason across clinical context, formulary specifics, member preference, geography, and incentive structure across millions of decisions.
To start, Tokaido delivers four motions on a single platform that have historically lived across separate vendors: site-of-care steerage, biosimilar substitution, formulary optimization, and polypharmacy reconciliation. The team sees this as just the beginning. The roadmap from here keeps expanding the surface area of decisions Tokaido can make on a member's behalf, and there is no shortage of places where misaligned incentives are pushing members toward the wrong choice.
Critically, Tokaido layers on top of the existing PBM and benefits stack. No PBM swap, no plan design overhaul, no fight with the incumbent ecosystem. The team does the concierge work of moving the member from the higher-cost option to the lower-cost one. The plan wins, the member wins, and the independent specialty providers absorbing biosimilar volume win.
We are thrilled to partner with Ben, Gus, Andrew, Samir and the rest of the Tokaido Health team as they come out of stealth and announce their $25M financing led by Norwest, Primary, Next Ventures, Constellation, Scrub Capital, and others.