Princeton-based Edison Partners, a growth equity investment firm, announced Tuesday it is leading a $12 million growth-financing round in next-generation health technology company, Capital Rx.

The company will use the funds to accelerate go-to-market execution and bolster its technology platform to transform the $500 billion pharmaceutical benefits management (PBM) industry.

Capital Rx is a pharmacy benefits manager, overseeing prescription benefit plans on behalf of employers, unions and government entities.

“Capital Rx is tackling one of the most pertinent issues in the health care system: a lack of pricing transparency. Their focus on providing a transparent clearinghouse and great service has quickly resonated with employers that have grown frustrated with the existing PBM model and are looking for an innovative solution to rising prescription costs,” said Lenard Marcus, general partner at Edison Partners who led the investment, in a statement.

“As a rapidly growing health technology company with a large addressable market, Capital Rx is a great fit for our portfolio and we look forward to helping AJ and the management team achieve their vision and maximize their market potential,” Marcus said.

Launched in April 2018, Capital Rx has realized 3,000 percent year-over-year revenue growth, with strong gross margin even as the company passes through savings to customers. Richer data sources, a unique, flat-fee business model and efficient workflows have helped them attract marquee employers including Philadelphia Federation of Teachers, The International Brotherhood of Teamsters and WoodForest Bank.

“The future of the pharmacy benefits industry is value-based—and that’s in line with our ethos to bring sustainable and transformative programs that accurately balance access, cost, and outcomes. Edison Partners is providing both the capital source and operating leverage to help us accelerate our go-to-market strategy and disrupt the supply chain with scalability, technology and service differentiation,” said AJ Loiacono, founder and chief executive officer of Capital Rx.

Edison Partners has financed and guided more than 220 private companies since 1986, including more than 20 health care technology companies. Noteworthy exits include Premier Health Exchange (PHX), Dendrite, Cadient, Health Market Science and Verilogue. Current Healthcare IT portfolio companies include Lincor, TrialScope, VirtualHealth and Zelis.

In a press release, Edison Partners said that prescription drug prices have skyrocketed and the public is demanding more transparency around the cost of health care, which is a centerpiece of the 2020 Presidential election campaign.

Large PBMs are facing scrutiny as their revenues are tied to drug prices and they have done little to bring pricing transparency to the market over the last 20 years, paving the way for next-generation PBMs that offer a more sustainable approach, according to Edison Partners.

Capital Rx oversees prescription benefit plans and brings financial visibility at the individual level to help employers, unions, and government entities achieve lower costs, manage their high-cost populations more effectively and improve patient outcomes.