Latest / Pharmacy Podcast Network / Behind the Policy: PBMs, Drug Pricing & Telehealth with Conor Sheehey | PBM Reform

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Behind the Policy: PBMs, Drug Pricing & Telehealth with Conor Sheehey | PBM Reform · Pharmacy Podcast Network

0:05
Speaker 1: You are listening to the global network of podcasters dedicated
0:09
Speaker 1: to the pharmacy profession.
0:10
Speaker 2: Welcome to the Pharmacy Podcast Network.
0:32
Speaker 3: Welcome to the PBM Reform Podcast, where we dive deep
0:36
Speaker 3: into the world of pharmaceutical benefit management, cutting through the
0:40
Speaker 3: noise to uncover the truth. Since twenty nineteen, we've been
0:44
Speaker 3: your go to source for the latest on how PBMs
0:47
Speaker 3: impact patient care, drug pricing, and the very future of pharmacy.
0:52
Speaker 3: Here we champion the role of pharmacists.
0:55
Speaker 4: The most knowledgeable advocates for medication safety and expertise. Join
1:01
Speaker 4: us as we expose and generate discussions that are reshaping
1:04
Speaker 4: healthcare and explore how we build a better payment system
1:08
Speaker 4: which focuses on advancing pharmacy care.
1:17
Speaker 5: Hey, welcome back to the PBM Reform Podcast. This is
1:20
Speaker 5: in support. We're getting amazing support from APCI, the United
1:25
Speaker 5: Voice of Independent Pharmacy. Just to learn more about the
1:28
Speaker 5: American Pharmacy Cooperative Incorporated, go to APCI net dot com
1:34
Speaker 5: once again. That's APCI net dot com and our host
1:38
Speaker 5: is back, Greg rivaled.
1:40
Speaker 2: Greg.
1:41
Speaker 5: It's so good to see you. It's so good to
1:43
Speaker 5: talk with you. I love the insights that you bring
1:45
Speaker 5: to our listeners on the Pharmacy Podcast Network about PBM reform,
1:49
Speaker 5: and it couldn't be a hotter boiling tub of water
1:53
Speaker 5: right now in PBM reform for our nation. So Greg
1:57
Speaker 5: take it away.
1:58
Speaker 6: Yeah, that's right, and appreciate Todd as always.
2:03
Speaker 7: Super excited about today's guests in today's conversation, and this
2:07
Speaker 7: is one where you know, if he's good enough, we
2:09
Speaker 7: haven't even started talking yet, and I'm already telling him
2:11
Speaker 7: what I want him back, right because there's so much
2:14
Speaker 7: there's so so much to talk about. And so we
2:17
Speaker 7: have Connor Shehe from Levitt Partners joining us today, and
2:23
Speaker 7: you know, it's always interesting what shapes the practice of pharmacy.
2:28
Speaker 7: And behind me this podcast so you'll probably can't see it,
2:31
Speaker 7: but I've got an old pin from like Man's probably
2:34
Speaker 7: the nineties, and it says, get into politics or get
2:37
Speaker 7: out of pharmacy. But there's so many things that shape
2:41
Speaker 7: the practice of pharmacy at state levels, at federal levels,
2:46
Speaker 7: and this is a really unique opportunity for pharmacists and
2:51
Speaker 7: others to hear from I think really one of the
2:54
Speaker 7: brightest minds in pharmacy and who shaped pharmacy policy, but
2:58
Speaker 7: who you know farm assists behind the counter, you know
3:01
Speaker 7: on main Street America may not yet know, and so
3:06
Speaker 7: really excited to have you Connor, and would love for
3:09
Speaker 7: you to just, you know, spend spend a minute or
3:11
Speaker 7: two just kind of introducing yourself and giving a little
3:14
Speaker 7: little background.
3:16
Speaker 1: Thanks so much, Greg, it is always great to connect
3:19
Speaker 1: with you. Thrilled to have the opportunity to participate in
3:23
Speaker 1: the podcast this morning. I am a longtime listener, first
3:27
Speaker 1: time guests, so again really really appreciate the opportunity. I
3:32
Speaker 1: should start by staying at the outset. As was noted
3:36
Speaker 1: in the intro, I currently work for a lot of partners.
3:38
Speaker 1: I'm here speaking in my personal capacity, not on behalf
3:42
Speaker 1: of the firm or our clients, but I can also
3:45
Speaker 1: say virtually whoever you talk to across the healthcare sector
3:52
Speaker 1: is plugged into PBM reform as an issue and is
3:57
Speaker 1: energized about achieving solutions on this front.
4:00
Speaker 2: And I first came into this space when I.
4:03
Speaker 1: Started on Capitol Hill back in twenty seventeen, so roughly
4:08
Speaker 1: eight years ago, when I worked for Senator Tim Scott
4:11
Speaker 1: of South Carolina, who served on two of the leading
4:14
Speaker 1: healthcare committees in the Senate. And I will say this
4:18
Speaker 1: was still a time where you didn't have a lot
4:20
Speaker 1: of TV commercials talking about pharmacy benefit managers or PBMs.
4:25
Speaker 1: I came to Capitol Hill with very little knowledge about
4:30
Speaker 1: what PBMs did, what their function in the supply chain was.
4:33
Speaker 1: I remember looking at flow charts of the prescription drug
4:37
Speaker 1: supply chain and feeling totally intimidated, and I questioned many
4:43
Speaker 1: times whether I had made the wrong choice by stepping
4:46
Speaker 1: into healthcare policy, in particular, just given how dante it
4:50
Speaker 1: can be. And Greg, I think, you know, the APCI
4:53
Speaker 1: connection is so important because for most of us, including
4:58
Speaker 1: for me, when I first came to Capitol Hill, my
5:01
Speaker 1: primary touch point with respect to prescription drugs was the pharmacy,
5:06
Speaker 1: and the goal of the pharmacy in many ways was
5:10
Speaker 1: with respect to the consumer, to ensure you didn't have
5:13
Speaker 1: to think about the broader supply chain, and you didn't
5:17
Speaker 1: have to think about the drug channel, and you know,
5:20
Speaker 1: you'd pay an affordable cost, you'd know you were getting
5:23
Speaker 1: a reliable product, you'd have a friendly rapport with your.
5:26
Speaker 2: Pharmacist, and then you go about your day. But over the.
5:33
Speaker 1: Exactly and over the course of my time in Center
5:35
Speaker 1: Scott's office, I had the privilege to start delving into
5:38
Speaker 1: these issues a little bit more. But then in twenty
5:42
Speaker 1: twenty one, I moved over to the Senate Finance Committee.
5:45
Speaker 1: And just because Senate jurisdiction issues are are only known
5:50
Speaker 1: to people in Washington, d c.
5:54
Speaker 2: Proper generally because they're so arcane and they're they're.
5:57
Speaker 1: Almost as convoluted as the prescription drug flow charts, which
6:01
Speaker 1: is saying something we set and exceed that high bar.
6:05
Speaker 2: But the Senate Finance.
6:07
Speaker 1: Committee has jurisdiction over the Medicare program as well as Medicaid,
6:12
Speaker 1: the Children's Health Insurance program, and a lot of health
6:16
Speaker 1: tax related policies such as health savings accounts.
6:19
Speaker 2: So I had the privilege for four years.
6:22
Speaker 1: On the Senate Finance Committee, working under now Chairman Mike
6:26
Speaker 1: Crepo from Idaho, where you talk about a state where
6:29
Speaker 1: community pharmacies are a lifeline, You've got a state like
6:32
Speaker 1: Idaho with such sweepingly large rural communities and rural populations.
6:37
Speaker 1: I mean, those folks really care about and value those
6:40
Speaker 1: pharmacists in pharmacy relationships. Again, that's often their frontline access
6:46
Speaker 1: point to healthcare, and it's the only alternative to driving,
6:49
Speaker 1: you know, one two three hours sometimes out of state
6:53
Speaker 1: to reach a frontline provider. But I think because Senator
6:57
Speaker 1: Crepo had that perspective, and because he's always cared a
7:01
Speaker 1: lot about healthcare access affordability across rural urban suburban communities,
7:07
Speaker 1: we were able, really as a team and on a
7:11
Speaker 1: bipartisan basis within the Senate Finance Committee to undertake what
7:16
Speaker 1: I think is fair to say is the most comprehensive
7:19
Speaker 1: federal pharmacy benefit manager reform effort to date. And this
7:24
Speaker 1: involved efforts from members across our committee who were from
7:29
Speaker 1: diverse states, representing communities from all walks of life. But
7:34
Speaker 1: in partnership with then chairman now ranking Member Ron Wyden
7:39
Speaker 1: of Oregon, and for my part with in partnership with
7:43
Speaker 1: my counterpart poly Webster, who was just phenomenal and equally
7:47
Speaker 1: plugged into these issues, we were able to develop bipartisan
7:52
Speaker 1: legislation over the course of two different bills, which we
7:56
Speaker 1: moved through our committee the first time around near unanimously,
8:00
Speaker 1: this second time unanimously. And I think what was crucial
8:05
Speaker 1: for us was we had policies aimed at getting at
8:09
Speaker 1: some of the supply chain incentives, but we also had
8:13
Speaker 1: provisions aimed specifically at ensuring pharmacy access protections for Americans,
8:21
Speaker 1: for seniors, for folks in Medicaid, and for again folks
8:24
Speaker 1: from any different commercial insured market, you name it, recognizing
8:29
Speaker 1: that Congress has had a longstanding commitment to serving the
8:35
Speaker 1: needs of communities, including folks like those in Idaho where
8:39
Speaker 1: those frontline pharmacies are their key access point for healthcare,
8:44
Speaker 1: and that commitment is reflected in the letter of the law.
8:48
Speaker 1: When you look at something like Medicare's prescription drug benefit,
8:52
Speaker 1: you know, on paper there's this any willing pharmacy provision.
8:56
Speaker 1: But I think in practice, and Greg, we'll get into
8:58
Speaker 1: this more. Despite being a former Senate staffer, I don't
9:01
Speaker 1: want to start this discussion off by filibustering, but I will.
9:06
Speaker 2: Say I think, for for Polly.
9:08
Speaker 1: And me, and for Senator creep Out and Senator Widen,
9:11
Speaker 1: and for so many of our members, it was crucial
9:15
Speaker 1: that we had protections for patient affordability, that we had
9:19
Speaker 1: provisions that got at the heart of some of the faulty,
9:23
Speaker 1: distorted incentives within the supply chain, and it was crucial
9:27
Speaker 1: that we shored up those pharmacy protections with clarity with
9:31
Speaker 1: enforcement and with oversight, and I will stop there.
9:35
Speaker 7: Now, look that's great, and there you know, again, we
9:38
Speaker 7: could probably riff just off what you said for a
9:41
Speaker 7: really long time, but you just touched on something that
9:45
Speaker 7: I always find fascinating to talk about. And and you
9:49
Speaker 7: mentioned like any willing provider, right, and so much of
9:52
Speaker 7: what we see in.
9:53
Speaker 6: The rags, and we're just jumping right right into deep
9:55
Speaker 6: water here.
9:56
Speaker 7: But when you read the Federal Code and then you
9:59
Speaker 7: look at sort of the way it's played out in practice,
10:03
Speaker 7: it's fascinating, right because if you read that Federal Code
10:05
Speaker 7: and it says, hey, any willing provider, boy, you think
10:09
Speaker 7: case closed, right, patients are going to have access to
10:12
Speaker 7: the provider that that is going to be of their choice,
10:15
Speaker 7: and then lo and behold below the law, there's sort
10:17
Speaker 7: of this complex regulatory scheme where you've got preferred networks
10:21
Speaker 7: and narrow networks and specialty medications being filled predominantly at
10:27
Speaker 7: PBM owned pharmacies.
10:30
Speaker 6: Something really similar.
10:32
Speaker 7: That I always think of sort of hand in hand
10:36
Speaker 7: is rebates, right, because federal law also says that beneficiaries
10:41
Speaker 7: are going to be offer the negotiated price, and federal
10:44
Speaker 7: law includes with the negotiated price discounts DR rebates and
10:50
Speaker 7: what we see in practice, And when you were in
10:52
Speaker 7: your position in Senate Finance, we talked about this, I
10:57
Speaker 7: think at least a few times. But what we see
10:59
Speaker 7: incice is, you know, and I think there's a Medpack
11:02
Speaker 7: report that looked at I think it was the year
11:04
Speaker 7: was twenty twenty one. They found fifty billion dollars in
11:08
Speaker 7: drug manufacture rebates that were treated as DR meaning beneficiary
11:12
Speaker 7: cost shares, beneficiary copays.
11:15
Speaker 6: Being based on being based on sort.
11:19
Speaker 7: Of this gross price instead of the net the price
11:22
Speaker 7: net of the rebates and the discounts that federal law contemplates.
11:26
Speaker 7: And you, you and Polly both I think, really delved
11:28
Speaker 7: into the weeds and sort of tried to get it, well,
11:31
Speaker 7: why is practice not matching not matching necessarily what federal
11:36
Speaker 7: law says? And how does that happen through the regulatory
11:39
Speaker 7: process and shows you how important regulations are.
11:43
Speaker 6: Would love for you to just expand on that a bit.
11:46
Speaker 1: Yeah, Greg, I'm so glad you brought this up because
11:49
Speaker 1: this was a key area of prioritization for really a
11:54
Speaker 1: bipartuis and crove of our members. And I think there
11:58
Speaker 1: was a real red flags Capitol Hill in September twenty
12:02
Speaker 1: twenty three, when the Government Accountability Office or GAO, they
12:07
Speaker 1: released I thought a pretty barn burner of a report
12:12
Speaker 1: that had looked at scores of data and had looked
12:15
Speaker 1: at contracts between manufacturers and PBMs all in the Medicare
12:20
Speaker 1: party space. And I remember the top line finding and
12:23
Speaker 1: there was a nifty infographic showing this suggested that for
12:28
Speaker 1: seventy nine of the one hundred most highly rebated drugs.
12:32
Speaker 2: So these are.
12:33
Speaker 1: Products where the manufacturers were paying discounts in some cases
12:37
Speaker 1: of fifty, sixty, seventy, or we know from the installent example,
12:42
Speaker 1: in some cases eighty or eighty five or ninety percent.
12:46
Speaker 1: You would think for beneficiaries, that's the best case scenario
12:51
Speaker 1: because they're going to get these massive discounts passed through.
12:54
Speaker 2: And that's part of the reason you enroll in a
12:57
Speaker 2: health plan.
12:57
Speaker 1: That's why most folks want to be cover through insurance
13:01
Speaker 1: and with the program with Medicare. That's why people work
13:04
Speaker 1: their entire lives and pay into this system with the
13:07
Speaker 1: expectation that when they turned sixty five and they enroll
13:11
Speaker 1: in the Medicare program that they're going to be protected
13:14
Speaker 1: from sticker shock out.
13:16
Speaker 2: Of pocket costs. But for this GIO.
13:19
Speaker 1: Report showed that for seventy nine of the one hundred
13:21
Speaker 1: most highly rebated drugs, the beneficiaries in a given year
13:27
Speaker 1: paid more than their plan sponsors did in some cases
13:31
Speaker 1: planned sponsors. So these are the carriers. And again for
13:34
Speaker 1: most of the party market, these folks are affiliated with PBMs,
13:40
Speaker 1: and so they are negotiating with their own subsidiaries at
13:44
Speaker 1: different levels, and they were in some of these cases
13:49
Speaker 1: essentially turning a profit off of these rebates, even as
13:56
Speaker 1: at the pharmacy counter. Plans increasingly in years have exposed
14:02
Speaker 1: seniors to those list prices. And Greg, I think you
14:05
Speaker 1: were right to point this out. You know, we often
14:08
Speaker 1: think about Medicare benefits and prescription drug benefits through this
14:14
Speaker 1: lens of what they might have looked like ten years ago,
14:18
Speaker 1: fifteen years ago. Where I think what folks generally expect
14:22
Speaker 1: with their health insurance is for the most part, you'll
14:26
Speaker 1: pay a flat copey And that's true for most generic drugs.
14:29
Speaker 2: Right most generic drugs, you.
14:31
Speaker 1: Go to the pharmacy counter, you're paying five dollars, ten dollars.
14:35
Speaker 1: But we generally think of flat cops and what we've
14:38
Speaker 1: seen over the course of the past few years. And
14:41
Speaker 1: I think it's fair to say there's a restructuring going
14:44
Speaker 1: on a party right now under the Inflation Reduction Act
14:48
Speaker 1: the past a few years ago that is changing that
14:52
Speaker 1: landscape such that more and more plans are turning to
14:56
Speaker 1: co insurance where you're paying a percentage of as you
15:00
Speaker 1: set the negotiated price. And I just think it defies
15:03
Speaker 1: logic that the quote unquote negotiated price would not reflect any.
15:10
Speaker 2: Of the negotiations. It doesn't even disflect any of the discounts.
15:14
Speaker 1: And so to me, it's like if if you have
15:17
Speaker 1: a product that has a list price of one thousand
15:19
Speaker 1: dollars and your health plan or PBM negotiated an eighty
15:24
Speaker 1: percent rebate, an eighty percent discount, that's fantastic. That's actually again,
15:29
Speaker 1: there's a world in which that PBM could say, look
15:32
Speaker 1: at our value proposition and our value add to the system.
15:36
Speaker 2: Because again, I think consumers rightly want a buffer in some.
15:39
Speaker 1: Cases between you know, the list pricing power of a
15:43
Speaker 1: given manufacturer and what they're paying at the pharmacy counter.
15:48
Speaker 1: But in practice those rebates are subject to in most
15:52
Speaker 1: cases really stringent confidentiality protections, you know, non disclosure agreements,
15:58
Speaker 1: all sorts of control, actual protection. So as the consumer,
16:02
Speaker 1: i see that one thousand dollars and I'm like, this
16:05
Speaker 1: manufacturer is really screwing me over with this high price.
16:09
Speaker 1: And again, traditionally, maybe I'm paying a twenty dollars twenty
16:14
Speaker 1: five dollars flat copay. In that case, I'm insulated more
16:18
Speaker 1: and more, I'm paying a twenty five percent co insurance,
16:22
Speaker 1: so I'm forking over two hundred and fifty dollars.
16:25
Speaker 2: And in the example I gave.
16:27
Speaker 1: That's actually that's that's a profit on that unit for
16:32
Speaker 1: my plan, even as I'm two hundred and fifty dollars down.
16:35
Speaker 1: And the last thing I'd say is we see this
16:37
Speaker 1: across the commercial market too. Deductibles are getting bigger and
16:42
Speaker 1: bigger in the commercial insurance base, in the party space.
16:46
Speaker 1: So that means in a given year, I may have
16:49
Speaker 1: to pay, you know, in the Medicare context, five hundred
16:52
Speaker 1: dollars in the commercial context, often much more before I
16:57
Speaker 1: even start getting any.
16:59
Speaker 2: Benefit from the plan.
17:00
Speaker 1: And with respect to prescription and in the deductible phase,
17:03
Speaker 1: I am always paying on that inflated sticker price.
17:06
Speaker 6: That's right.
17:08
Speaker 1: Yeah, so I guess the last thing I say on this, Greg,
17:12
Speaker 1: I think what we tried to do with the Senate
17:15
Speaker 1: Finance Committee process was figure out, you know, we know
17:18
Speaker 1: that these rebates buy and large are being translated into
17:23
Speaker 1: buying down premiums because understandably and surers want to have
17:26
Speaker 1: a more attractive product and easier.
17:28
Speaker 2: To market product.
17:30
Speaker 1: And again studies suggest a lot of those rebate dollars
17:33
Speaker 1: do go into premium declines.
17:35
Speaker 2: That just doesn't help you much.
17:37
Speaker 1: If you have a chronic condition and you were going
17:40
Speaker 1: to the pharmacy every week or every month for a prescription,
17:44
Speaker 1: you don't get much peace of mind knowing that, hey,
17:47
Speaker 1: at least my premium is ten cents less than it
17:51
Speaker 1: would be otherwise. In my neighbor down the street who
17:54
Speaker 1: doesn't have chronic conditions benefits from that too.
17:57
Speaker 2: I think what we tried to do with.
17:58
Speaker 1: Our legislation was saying, for a subset of chronic conditions,
18:03
Speaker 1: if as a plan.
18:04
Speaker 2: You were going to charge this co insurance, you're going
18:08
Speaker 2: to charge a percentage of this list sticker price, then
18:11
Speaker 2: you got to do that incorporating most of the discounts
18:16
Speaker 2: and rebates that you expect to get on that unit.
18:19
Speaker 2: We gave them some flexibility.
18:21
Speaker 1: We actually worked really actively with some good faith folks
18:25
Speaker 1: across the sector and try to figure out how can
18:28
Speaker 1: we set this up in a way that it was
18:30
Speaker 1: almost like a pilot program to ensure we were providing
18:33
Speaker 1: relief for patients with chronic conditions at the pharmacy counter.
18:38
Speaker 1: And I think our hope is if that provision were
18:40
Speaker 1: enacted and it works the way we think it will,
18:44
Speaker 1: and it works the way it has in states that
18:46
Speaker 1: have adopted that model for their fully insured commercial markets,
18:51
Speaker 1: my hope is that we could see that become the
18:54
Speaker 1: norm across the broader system. Again, it's a starting point.
18:59
Speaker 1: I love to see some of this done through regulation.
19:02
Speaker 1: I think it's been encouraging to hear some comments from
19:05
Speaker 1: Administrator OZ and others in the administration saying, you know,
19:09
Speaker 1: they don't like the way this current rebate system functions.
19:12
Speaker 2: They like to see this shift.
19:15
Speaker 1: And I think for the average pharmacist, I can't imagine
19:18
Speaker 1: anyone wants to see a patient with whom they have,
19:21
Speaker 1: you know, an operating relationship and a rapport come in
19:25
Speaker 1: to fill a prescription, find that they're charged five hundred
19:29
Speaker 1: dollars this year when last year it was twenty dollars
19:32
Speaker 1: copay and then have to say, you know, I can't
19:36
Speaker 1: afford this right now and walk away.
19:38
Speaker 2: You know that's really bad in the passion right totally.
19:43
Speaker 7: So again, a lot to unpack there. I think I
19:49
Speaker 7: want to make sort of two points and throw it
19:51
Speaker 7: back at you. I think that I love the point
19:55
Speaker 7: you made about the deductible First of all, right, like like,
19:58
Speaker 7: obviously things are moving towards co insurance, but when you're
20:00
Speaker 7: in that deductible phase, and obviously you're talking about the
20:04
Speaker 7: GAOS GAO or like seventy nine one hundred most rebated drugs,
20:07
Speaker 7: the beneficiary is actually paying more. You also touched on
20:11
Speaker 7: the fact that there are certain cases where the prescription
20:14
Speaker 7: drug plan and the PBM, who are often affiliated, are
20:17
Speaker 7: making money on that right in the deductible phase. If
20:20
Speaker 7: if they're not, you know, if the patient's paying one
20:22
Speaker 7: hundred percent of that drug cost and the PBM is
20:27
Speaker 7: mandated a brand, so the beneficiary is paying more out
20:30
Speaker 7: of pocket when let's say there's a less expensive generic
20:33
Speaker 7: and then on top of that, the prescription drug p PM,
20:35
Speaker 7: we're getting that rebate back. This is a situation where
20:38
Speaker 7: the beneficiary is paying more out of pocket so that
20:42
Speaker 7: the PBM and the prescription drug plan can literally make money. Right,
20:45
Speaker 7: So really really warp from an insurance perspective. And you
20:49
Speaker 7: also touched on premiums, and obviously sort of the concept
20:52
Speaker 7: of insurance is really subsidizing for the sickest, right, that's
20:56
Speaker 7: sort of the base and what we have now in
20:58
Speaker 7: Part D and also a lot of commercial plans is
21:02
Speaker 7: and you said perverse incentives is a situation where the
21:05
Speaker 7: sick are subsidizing lower premiums, presumably for the many. But
21:10
Speaker 7: I want to talk about the lower premiums because I
21:13
Speaker 7: think certainly some of those certainly lower premiums are being
21:20
Speaker 7: subsidized through rebates to a point. But what doesn't to
21:23
Speaker 7: me get talked about a lot is how much of
21:26
Speaker 7: those premium like, how much of those rebates are actually
21:28
Speaker 7: going used to subsidize lower premiums.
21:31
Speaker 6: And I would, I would posit and.
21:32
Speaker 7: I'm happy to push back on this that there's not
21:35
Speaker 7: a whole lot out there on that front. And I remember,
21:38
Speaker 7: like there was a MedPAC report that estimated like six
21:41
Speaker 7: dollars per member per month lower premiums over a period
21:46
Speaker 7: of I'm not going to be exact, but let's say
21:48
Speaker 7: like twenty seventeen to twenty twenty one, something like that.
21:52
Speaker 7: But if you take a six dollars per month premium,
21:54
Speaker 7: you multiply at times all the beneficiaries in Part D, Right,
21:58
Speaker 7: and then you look at twenty twenty one alone, fifty
22:01
Speaker 7: billion in rebates.
22:03
Speaker 6: Those rebate dollars are.
22:05
Speaker 7: Are are not just going to lower premiums, right, I
22:08
Speaker 7: mean they're definitely from my perspective, that money is going
22:12
Speaker 7: elsewhere and large, large swaths and chunks of it. I
22:17
Speaker 7: know you've looked at this closer than probably about anybody.
22:20
Speaker 6: What are your thoughts on that?
22:23
Speaker 1: Yeah, Greg, it's a great question, and I think what
22:26
Speaker 1: your last point is so important and it underscores I
22:30
Speaker 1: think the reason why the push for transparency remains so
22:35
Speaker 1: central to this conversation and so central to a lot
22:38
Speaker 1: of legislative efforts at the federal and the state level.
22:42
Speaker 1: I think it's fair to say there are so many
22:45
Speaker 1: questions that we don't know the answer to because again,
22:50
Speaker 1: these models shift over time. Right, I think it's fair
22:53
Speaker 1: to say the rebate conversation was a different discussion in
22:58
Speaker 1: twenty seventeen and twenty eighteen. In nineteen, when the first
23:01
Speaker 1: Trump administration issued and proposed the rebate rule, it was
23:06
Speaker 1: a very different model and discussion than that it is now.
23:11
Speaker 1: And I think it's fair to say, you know, profit
23:14
Speaker 1: drivers shift. One thing you mentioned earlier, Greg was specialty
23:18
Speaker 1: pharmacy in the specialty dispensing channel. I think Adam Fine
23:22
Speaker 1: and his Drug Channel Institute blog noted recently that for
23:27
Speaker 1: I can't even remember how many years in a row
23:29
Speaker 1: it is, but based on the data, we are seeing
23:32
Speaker 1: huge growth in this specialty pharmacy channel. And again, is
23:37
Speaker 1: we both know really well and is the average pharmacist
23:40
Speaker 1: knows really well what a specialty quote unquote drug is
23:45
Speaker 1: is in the eye of the beholder, and generally speaking
23:48
Speaker 1: the beholder is the PBS, the PBO.
23:50
Speaker 6: Yes, So the.
23:51
Speaker 2: Reality is, you know, this channel growth.
23:55
Speaker 1: I think some of it's organic, just because we have
23:57
Speaker 1: seen a lot of breakthrough specialty products, you know, I
24:01
Speaker 1: think about oral oncology drugs come to market. But part
24:05
Speaker 1: of this, I think is also a category question. And
24:08
Speaker 1: the reality is at this point, and again, drug channels
24:12
Speaker 1: broke down the top fifteen specialty pharmacies by their share
24:18
Speaker 1: of prescription revenues associated with you know, PBM designated specialty drugs.
24:25
Speaker 1: Two thirds of that volume was affiliated with specialty pharmacies
24:31
Speaker 1: that are PBM affiliates. And so again, if you're the
24:34
Speaker 1: PBM and you're crafting pharmacy networks and you're kind of
24:39
Speaker 1: you get to decide to some extent, what type of
24:42
Speaker 1: a pharmacy can dispense a quote unquote specialty drug and
24:46
Speaker 1: what can't you get to say, Oh, this generic drug
24:49
Speaker 1: that's been on the market for years, retail pharmacies have
24:52
Speaker 1: had no trouble dispensing in the past, but now it
24:55
Speaker 1: is a specialty generic drug, and so now it has
24:58
Speaker 1: to go through the specialty channel. And there are all
25:01
Speaker 1: sorts of contracting mechanisms that any organization can leverage in
25:06
Speaker 1: order to steer volume towards those specialty pharmacy affiliates. Again,
25:13
Speaker 1: that two thirds volume isn't just a throwaway number. It
25:18
Speaker 1: translates into the fact that now specialty pharmacy dispensing revenue
25:23
Speaker 1: accounts for i want to say, roughly one third of
25:26
Speaker 1: gross profits for PBM organizations, So I'm talking about the
25:30
Speaker 1: broader companies there. Again, that's a significant shift from where
25:36
Speaker 1: we were ten years ago. I also look at a
25:38
Speaker 1: phenomenon like private labeling. The reality is different forms of
25:43
Speaker 1: private labeling have been around for a while. But I
25:46
Speaker 1: remember a time a few years ago when we were
25:49
Speaker 1: all pushing for more biosimilar dispensing. We had these products
25:54
Speaker 1: with you know, eighty five percent discounts relative to more
25:58
Speaker 1: expensive biologic you know, these are essentially just complex drugs,
26:03
Speaker 1: often injectables and fusion drugs, and there was this massive push,
26:08
Speaker 1: and I think the response we saw is each of
26:10
Speaker 1: the three PBMs now operates a private labeler. So you've
26:15
Speaker 1: got Qualin, which has been around a little bit longer.
26:18
Speaker 1: You've got Cordavis with the CVS Health umbrella, and then
26:23
Speaker 1: you've got Nuvela under the UHG umbrella. And these are
26:26
Speaker 1: organizations that I think their value proposition to the public
26:30
Speaker 1: into consumers is, hey, look, we're giving you the low
26:34
Speaker 1: cost biosimilar access you wanted by essentially having various biosimilar
26:40
Speaker 1: companies bid for the right to sort of operate and
26:45
Speaker 1: have their drugs manufactured and distributed under these PBM affiliated labels.
26:50
Speaker 1: And look, I'm not an attorney, and I don't have
26:53
Speaker 1: access to those contracts.
26:54
Speaker 2: I've not seen their books.
26:56
Speaker 1: But I think that's an area where I now policymakers
27:01
Speaker 1: Senator Langford, Senator Widen, various folks in the House of
27:05
Speaker 1: Representatives asking questions about, Okay.
27:08
Speaker 2: What are the margins there, what are the fee arrangements there?
27:11
Speaker 1: And again it's this is not opining on whether that
27:16
Speaker 1: is a good thing or a bad thing. It's more
27:18
Speaker 1: underscoring the fact that with respect to rebate breakdowns with
27:23
Speaker 1: respect to especially pharmacy margins and spread and dispensing volume
27:28
Speaker 1: with respect to new entities like private labeling entities, folks
27:33
Speaker 1: realistically and reasonably want additional transparency. And I think the
27:38
Speaker 1: patchwork of state provisions that we've seen makes so much
27:43
Speaker 1: sense from a state wlallmaker perspective, because they see a
27:45
Speaker 1: void they want to fill this void. But I think
27:48
Speaker 1: especially as we've seen the courts turn away from the
27:53
Speaker 1: ruling we saw on Rutledge where they said, look, a
27:56
Speaker 1: risk of preemption does not necessarily preempt a state from
28:00
Speaker 1: PBM focused regulations. In other cases, more recently, we've seen
28:05
Speaker 1: pushback to that approach, and I think it underscores the
28:08
Speaker 1: fact that the FEDS have a valid and vital role
28:11
Speaker 1: to play in saying Okay, let's bring some transparency to
28:15
Speaker 1: the riskam market where there's broad federal preemption, and to
28:20
Speaker 1: Medicare party and to Medicaid.
28:22
Speaker 2: So again, I would love.
28:24
Speaker 1: To know the answers to all these questions. I think
28:26
Speaker 1: policymakers and regulators would as well, and I think employers
28:30
Speaker 1: in the commercial market would love these answers.
28:33
Speaker 2: So I'm really hopeful we'll make progress there.
28:36
Speaker 7: Yeah, so interesting, And you know you mentioned private label.
28:38
Speaker 7: I want to give a shout out. I don't know
28:40
Speaker 7: if you've seen this. I'm glad you brought it up.
28:41
Speaker 7: But forty six Brooklyn had a really really amazing piece
28:46
Speaker 7: on that I think about two weeks ago that I
28:49
Speaker 7: would definitely point to and have folks go ahead and
28:53
Speaker 7: read that.
28:56
Speaker 6: So, you know, one of the things that I don't
28:58
Speaker 6: I don't. I don't want to.
28:58
Speaker 7: If there's a boy, there's somebody for us to talk
29:00
Speaker 7: about here, but I think I'm going to push back.
29:04
Speaker 7: I don't even know if it's pushback right. But we
29:06
Speaker 7: talked about them moving to the specialty channels and the
29:08
Speaker 7: accounting for revenue, and what I would say is they're
29:12
Speaker 7: in certain areas as we're able to look under the
29:15
Speaker 7: rocks sort of the data. There's already data there telling
29:18
Speaker 7: a lot of these stories, right and so and again, right,
29:22
Speaker 7: you know, sometimes it's Medicare data, sometimes it's Medicaid.
29:26
Speaker 6: You know.
29:26
Speaker 7: Sometimes you can get access to federal employee health plan data.
29:29
Speaker 7: There are two states where that require commercial data reporting.
29:33
Speaker 7: Georgia was the first to do it in twenty twenty.
29:36
Speaker 7: West Virginia followed quickly, and PBMs are have to report
29:41
Speaker 7: certain percentages above NATEAC and whether it was an affiliate
29:45
Speaker 7: pharmacy not affiliate pharmacy. And what we see is not
29:48
Speaker 7: only do we see more and more specialty medications being
29:53
Speaker 7: contrary to what they've said in hearings, being steered to
29:56
Speaker 7: their affiliated pharmacies in a variety of ways including con tracting,
30:00
Speaker 7: including plan design. But what we know is that oftentimes
30:05
Speaker 7: these are not savings. Right when you when you compare
30:08
Speaker 7: the markups at the affiliated pharmacies to when independent or
30:14
Speaker 7: even non affiliated retail pharmaci's were able to fill these drugs,
30:17
Speaker 7: you're seeing massive, massive markups. And so I certainly think
30:20
Speaker 7: transparency is a really good thing. I would say in
30:25
Speaker 7: certain markets, we've seen enough to know that that action
30:28
Speaker 7: needs to be taken. And it's interesting because I definitely
30:31
Speaker 7: hear you on the patchwork at states, but i'd also
30:33
Speaker 7: pause it. And this is a guy who came from
30:35
Speaker 7: you know, from a state background, right. But if it
30:39
Speaker 7: weren't for the states, God help us. Right now, PBMs
30:42
Speaker 7: would have the run of the House because federal laws
30:46
Speaker 7: have not even remotely kept pace. And there's reasons for that,
30:49
Speaker 7: and I want to talk about those reasons. Right It's
30:52
Speaker 7: harder to move stuff at the federal level. So I'm
30:55
Speaker 7: going to ask you that. But also in the context
30:57
Speaker 7: of Trump is back in office, and you know, he
31:02
Speaker 7: was willing to really go beyond just transparency with sweeping
31:06
Speaker 7: safe harbor reforms to ensure that beneficiaries get the benefit
31:10
Speaker 7: of that discount. I was a big fan of that, right,
31:14
Speaker 7: I make no apologies for that. The Inflation Reduction Act certainly,
31:19
Speaker 7: you know, undermine that by pushing implementation back to twenty
31:22
Speaker 7: thirty two.
31:23
Speaker 6: With Trump back in office and.
31:25
Speaker 7: An HHS and a CMS that is looking, I think,
31:30
Speaker 7: to take big swings. And you see with the most
31:32
Speaker 7: favored nations, you know, A would love you to talk
31:35
Speaker 7: about why it's more difficult, why we don't see more aggressive, meaningful,
31:39
Speaker 7: comprehensive reform that's passed at the federal level already. But
31:43
Speaker 7: also does President Trump being back in office and with
31:47
Speaker 7: these new sort of agency heads, is there an opportunity
31:50
Speaker 7: for more sweeping material change as well.
31:55
Speaker 2: Yeah, Greig, it's a terrific question.
31:57
Speaker 1: I will say at the outset one of the most
31:59
Speaker 1: important points you just made, and it's one that we
32:02
Speaker 1: made again and again in discussions with our members, and
32:05
Speaker 1: I think there's broad bipartisan and by cameral support.
32:08
Speaker 2: For this premise.
32:10
Speaker 1: We've got to go beyond transparency, particularly in markets where
32:14
Speaker 1: we've seen enough. I think the biggest example of that
32:17
Speaker 1: is probably Medicare party and Medicaid. And I think what
32:22
Speaker 1: you've seen is not just the Senate Finance Committee, but
32:25
Speaker 1: also multiple different House committees have in the past couple
32:30
Speaker 1: of years advanced reforms that are aimed at, for instance,
32:34
Speaker 1: in Medicare party D linking PBM compensation in that market
32:40
Speaker 1: from the prices of drugs. Because again, if you have
32:44
Speaker 1: a system where I'm the price negotiator and I get
32:47
Speaker 1: paid thirty percent of whatever the price is, you know
32:52
Speaker 1: it doesn't take a genius or a rocket scientist to
32:57
Speaker 1: recognize that's creating an incentive a for me to preference
33:01
Speaker 1: drugs with higher prises.
33:02
Speaker 2: And to your point, the Office of the.
33:04
Speaker 1: Inspector General and the GAO have produced ample data demonstrating
33:11
Speaker 1: in living color the fact that we have seen distorted preferencing.
33:15
Speaker 1: And by the way, GAO's twenty twenty three report, in
33:19
Speaker 1: addition to talking about the rebate distortions as a matter
33:22
Speaker 1: of cost, they looked at some of the contracting arrangements
33:27
Speaker 1: and in most cases you saw examples of deals between
33:33
Speaker 1: branded manufacturers and PBMs that would say, you know, i
33:39
Speaker 1: will pay you a bigger rebate if I'm the only
33:41
Speaker 1: drug on this tier, or if I'm the only drug
33:43
Speaker 1: on formula, or you keep generic or bias similar self.
33:46
Speaker 1: I don't say that with any disrespect or disdain for
33:50
Speaker 1: the folks at that contracting table.
33:53
Speaker 2: They're responding to the incentives.
33:55
Speaker 1: Within the program as it exists now and the law
33:58
Speaker 1: as it's been interpreted now. But I also think we
34:01
Speaker 1: can look at that and say that's a problem, right,
34:03
Speaker 1: That's a problem for consumers and it's a problem for
34:05
Speaker 1: the market. So to my mind, medicare part dd winking,
34:10
Speaker 1: I think is a terrific first foundational step, and my
34:15
Speaker 1: hope is that as we take that step, as we
34:19
Speaker 1: also again through some of the reforms that we solve
34:23
Speaker 1: multiple committees across both chambers advanced on a unanimous basis,
34:27
Speaker 1: as we give some teeth and put some meat on
34:30
Speaker 1: the bones.
34:31
Speaker 2: Of any willing pharmacy protections.
34:33
Speaker 1: You know, the laws right now say that the terms
34:36
Speaker 1: and conditions that are offered by a plan or PBM
34:39
Speaker 1: to pharmacies are supposed to be quote unquote reasonable and relevant.
34:43
Speaker 1: But that's not been fleshed out.
34:45
Speaker 2: Again, I think.
34:46
Speaker 7: Argually because the non interference clause too right like, it's
34:49
Speaker 7: very difficult, truly.
34:51
Speaker 1: And that's why I don't say any of this diminutively
34:53
Speaker 1: towards CMS either. I think that the sense from the
34:56
Speaker 1: agency is Congress needs to step up and give them
35:00
Speaker 1: some direction on how they want this to look.
35:03
Speaker 2: And again, I actually have a relatively high level.
35:06
Speaker 1: Of confidence that Congress will advance those pharmacy access protections
35:10
Speaker 1: and party that they will move part y PBM fee
35:15
Speaker 1: compensation dlanking, that they will prohibit spread pricing and medicaid
35:20
Speaker 1: another area where we've seen copious data also not just
35:24
Speaker 1: from the FEDS, but from folks like Antonio, as you mentioned,
35:27
Speaker 1: who's been living and breathing this stuff long before the
35:30
Speaker 1: public knew what a PBM was, and who's kept.
35:34
Speaker 2: Pace with terrific research.
35:36
Speaker 1: And so again, I think with respect to federal policy,
35:40
Speaker 1: there is a consensus among most members in both chambers,
35:45
Speaker 1: and I've seen Speaker Johnson talk about this. I've certainly
35:49
Speaker 1: seen Senator fun the majority leader of the Senate, talk
35:52
Speaker 1: about this, and in fact, he had provisions included in
35:55
Speaker 1: the Finance Committee's package that he voted to advance. So
35:59
Speaker 1: I think where there's a real path forward on Capitol
36:03
Speaker 1: Hill right now is with respect to those provisions that
36:07
Speaker 1: are focused on Medicare and Medicaid, and I think commercial
36:11
Speaker 1: market transparency, because I do think there's a consensus in
36:15
Speaker 1: both chambers, and the Congressional Budget Office, by the way,
36:19
Speaker 1: says all of this will save money for the taxpayers,
36:22
Speaker 1: for employers, and for employees.
36:25
Speaker 2: Folks want to look under the hoods. So those areas.
36:29
Speaker 1: I think it's a question of when is Capitol Hill
36:32
Speaker 1: going to find their next opportunity for a bipartisan vehicle. Look,
36:36
Speaker 1: we had fits and starts when I was on the Hill.
36:39
Speaker 1: It was never reasons related to healthcare provisions specifically, it
36:44
Speaker 1: was broader macro politics. I think it's a question of when,
36:48
Speaker 1: not if, for those policies to move. I think where
36:51
Speaker 1: Congress has been the most reluctant, and Greg this speaks
36:54
Speaker 1: to your question around some of the difficulties from a
36:58
Speaker 1: federal policy making standpoint. There is a real apprehension on
37:03
Speaker 1: Capitol Hill, particularly among many Republican members, around interventions into the.
37:10
Speaker 2: Commercial health insurance market.
37:12
Speaker 1: And I think some of this is born out of
37:15
Speaker 1: the Affordable Care Act, where a lot of folks did
37:19
Speaker 1: see premium hikes in the early years, and again I
37:21
Speaker 1: think the general public early on there was some backlash.
37:25
Speaker 1: I think increasingly the general public has said, you know,
37:28
Speaker 1: the growing pains are behind us. This was you know,
37:33
Speaker 1: legislation that love it or hated. It's the law of
37:35
Speaker 1: the land now. But I do think there's a knee
37:38
Speaker 1: jerk fear and apprehension and skepticism. And what I would
37:42
Speaker 1: advise for folks on listening to this podcast who are
37:46
Speaker 1: interested in how to advocate effectively and how to try
37:51
Speaker 1: to push for federal reform, I think showing examples of
37:55
Speaker 1: how state laws have played out in practice. I look
37:59
Speaker 1: at the example of rebate reform, reflecting rebates at the
38:02
Speaker 1: point of sale has worked across multiple states, has not
38:06
Speaker 1: led to premium hikes. We'll see what Colorado's experience with
38:09
Speaker 1: PBM phoebe Winking looks like. But again, if that's successful,
38:13
Speaker 1: I think that creates a really strong case to Capitol
38:16
Speaker 1: Hill that look, these are smart market oriented interventions into
38:22
Speaker 1: a market that is not functioning in accordance with quote
38:26
Speaker 1: unquote market economic principles, because there's comfort concentration, there's information asymmetry.
38:32
Speaker 1: So I think congressionally, there's definitely going to be an
38:36
Speaker 1: appetite for movement, and I think folks recognize there's a
38:39
Speaker 1: need for policy. But I would expect more movement on
38:42
Speaker 1: the Medicare and Medicaid side and a little more apprehension
38:45
Speaker 1: on the commercial side with respective the administration. Just to
38:49
Speaker 1: quickly get to the second part of your question, which
38:51
Speaker 1: is a great one, I think if you look at
38:53
Speaker 1: remarks from the President, he clearly wants to revisit this issue.
39:00
Speaker 1: Form again, was a key focal point under the first
39:03
Speaker 1: Trump administration.
39:05
Speaker 2: I think right now a lot.
39:06
Speaker 1: Of the energy appears to be around this most favored
39:10
Speaker 1: nation concept. Look just speaking on my own behalf, I
39:15
Speaker 1: think that's a frat concept.
39:17
Speaker 2: I think it has and it has all sorts of
39:20
Speaker 2: operational concerns.
39:22
Speaker 1: I think the other piece, though, is our pricing system
39:25
Speaker 1: stems in part from this opaque patchwork of different rebates
39:31
Speaker 1: and discounts and various different pressures.
39:34
Speaker 2: It's not transparent.
39:36
Speaker 1: I applaud the administration for pushing for additional transparency in
39:40
Speaker 1: this space from a regulatory standpoint, it seems like that's
39:43
Speaker 1: their first step. But my hope is that this most
39:48
Speaker 1: Favored Nation concept, that as the Administration considers it, some
39:53
Speaker 1: of these challenges will come top of mind. And I
39:57
Speaker 1: think the reality of a very high risk of illegal
40:03
Speaker 1: litigation boondoggle with no actual policy effect, and of a
40:09
Speaker 1: conversation shifting away from the American system and how to
40:13
Speaker 1: improve it and shifting towards various European systems that I
40:18
Speaker 1: think for many Americans, you know, they wouldn't want the
40:21
Speaker 1: National Health Service. I don't begrudge my British friends. They're
40:26
Speaker 1: very proud of that system, but that's not what Americans
40:29
Speaker 1: have signed up for in.
40:30
Speaker 7: Section so very uptight the British I think we can
40:32
Speaker 7: agree on that is.
40:33
Speaker 1: That without without without commenting on the UK or the Brits,
40:41
Speaker 1: all I would say is, I think for I think
40:44
Speaker 1: for the average American there's a lot of appeal to
40:47
Speaker 1: prescription drug affordability. And my hope is that we will
40:51
Speaker 1: see a pivot away from MSN and towards more aggressive,
40:56
Speaker 1: assertive action on issues and areas like this. Where again,
41:01
Speaker 1: Doctor Oz his remarks at the Transparencies Rising Conference recently,
41:05
Speaker 1: I think it suggested to me he understands these issues
41:10
Speaker 1: inside and out, and he understands this market. And I
41:13
Speaker 1: applaud the administration for its efforts towards collaborative, cooperative policymaking in.
41:20
Speaker 2: A number of areas.
41:21
Speaker 1: I my sincere hope as someone who has, you know,
41:25
Speaker 1: a long standing interest in seeing PBM reform happen, and
41:28
Speaker 1: I think that requires both regulatory and legislative action. My
41:33
Speaker 1: sincere hope is if we don't see significant market driven
41:40
Speaker 1: shifts on a voluntary basis, and I haven't seen them
41:43
Speaker 1: to date, as we have in some other markets, then
41:47
Speaker 1: I have My hope is that Administrator Oz and HHS
41:51
Speaker 1: Secretary Kennedy, and President Trump, all of whom have expressed
41:55
Speaker 1: interest in pursuing smart PBM reforms, is that this could
42:02
Speaker 1: become a.
42:02
Speaker 2: Regulatory agenda item.
42:04
Speaker 1: It feels like this year has been you know, lengthy
42:06
Speaker 1: in some ways, lots of policy activity, but we're still
42:10
Speaker 1: in early innings with respect to the broader term. I
42:14
Speaker 1: think back to Trump won, a lot of the policy
42:18
Speaker 1: action on a regulatory front with respect to healthcare didn't
42:22
Speaker 1: come until twenty eighteen or twenty nineteen. Yeah, I would
42:26
Speaker 1: encourage folks not to lose hope.
42:28
Speaker 6: Yeah.
42:28
Speaker 7: And you know, even with the safe harbor reform, right,
42:31
Speaker 7: that's something that he sort of planned a flag very early,
42:34
Speaker 7: but the actual regulatory came very late in the term, exactly.
42:38
Speaker 6: Yeah. So that's a great point.
42:40
Speaker 7: Okay, we don't have a ton of time left, so
42:43
Speaker 7: I want to try to address three things really really quickly.
42:47
Speaker 7: And I love that you touched on the state data.
42:49
Speaker 7: You also mentioned congressional budget off and savings, you know,
42:52
Speaker 7: one of the things, and you can disagree with this,
42:55
Speaker 7: but one of the things that I find is that,
42:58
Speaker 7: you know, independent pharmacy have great relationships with their congress people,
43:02
Speaker 7: and they do a great job of explaining the issues
43:05
Speaker 7: and and and there's a will to affect really significant,
43:09
Speaker 7: meaningful change, and some of that butts up and including
43:13
Speaker 7: what what President Trump tried to do with rebates, bunts
43:15
Speaker 7: up against problematic Congressional Budget Office scoring and so often
43:20
Speaker 7: to me it seems like these are based between Congression
43:24
Speaker 7: Budget Office and also some some staffers on the hill
43:26
Speaker 7: right there. These issues have been hammered by insurers and
43:32
Speaker 7: PBMs and interests for a long long time, and it
43:34
Speaker 7: seems to me there's very much presumptions that, oh, my god,
43:38
Speaker 7: if you, if you touch rebates, premiums rise, or if
43:42
Speaker 7: you if you if we're not the ones setting the prices,
43:45
Speaker 7: or if we're not able to steer premiums and cost rise.
43:48
Speaker 7: But the data tells a really different story, and you
43:50
Speaker 7: touched on that right so so very recently, the West
43:53
Speaker 7: Virginia rebate passed through law which basically says, hey, you
43:57
Speaker 7: have to share the discount with the with the patient
43:59
Speaker 7: and anything left over goes to lower premiums. And the
44:03
Speaker 7: insurer's own data that they submitted, their actual is that
44:06
Speaker 7: they submitted the Commission of Insurance showed that that ended
44:09
Speaker 7: up reducing premium growth anywhere from like one to don't
44:13
Speaker 7: quote me, but eleven or twelve percent in Georgia this year,
44:16
Speaker 7: there was a repricing PBM pricing for twenty twenty three
44:19
Speaker 7: versus moving to an index plus model, right and lo
44:24
Speaker 7: and behold, guess what when they did actual repricing and
44:27
Speaker 7: there wasn't a presumption there was ingred There was eleven
44:30
Speaker 7: million dollars in savings conservatively based on that repricing. And
44:36
Speaker 7: so I know, like there were times I don't want
44:38
Speaker 7: to put words in your mouth where I'm sure like
44:40
Speaker 7: you all wanted to even be more aggressive in certain ways. Right,
44:44
Speaker 7: But you've got this, you know, you've got these realities
44:47
Speaker 7: and what can be done, and do you think data
44:51
Speaker 7: driven advocacy can help can help shape that? And then
44:57
Speaker 7: part two to that is give our listeners a little
45:00
Speaker 7: idea of just how like, look, you were in the
45:02
Speaker 7: pit you were shaping the policy, how engaged and how
45:05
Speaker 7: many insure and PBM interests are involved in this process
45:10
Speaker 7: as well.
45:12
Speaker 1: Yeah, Greg, it's a terrific question, I will say any
45:16
Speaker 1: time to start with it the latter piece first, and
45:19
Speaker 1: I'll be I'll be brief in these responses because I've.
45:22
Speaker 6: Not been on brief enough so far.
45:24
Speaker 1: But I think it's fair to say with respect to
45:27
Speaker 1: any health care policy, because the federal government accounts for
45:32
Speaker 1: such a large share of.
45:33
Speaker 2: The healthcare markets.
45:35
Speaker 1: And that's truer of healthcare that I think virtually any
45:39
Speaker 1: other sector of the economy possible exception of agriculture, but
45:42
Speaker 1: I think healthcare might have him be. The reality is,
45:46
Speaker 1: you know, folks have a significant amount of money on
45:49
Speaker 1: the line, and that's true for any stakeholder. So I
45:52
Speaker 1: think it's fair to say as we went through the process,
45:55
Speaker 1: Polly and I undertook a series of listening sessions and
46:00
Speaker 1: meetings with every stakeholder group under the sun. We talked
46:05
Speaker 1: to large PBMs, small PBMs. We talked to community health
46:10
Speaker 1: plans and larger insurers. We talked to patient advocacy groups,
46:14
Speaker 1: and I think the reality is it was a diverse
46:17
Speaker 1: landscape of perspectives. And look, I think the folks who
46:22
Speaker 1: felt that they had the most to lose under the
46:25
Speaker 1: policies that we were proposing, you know, they they did
46:30
Speaker 1: their constitutional right and they were extremely vocal. And again
46:35
Speaker 1: that's going to happen with any process. But I think
46:37
Speaker 1: it's also fair to say, like with respect to the
46:42
Speaker 1: Hills response, I think the advocacy from community pharmacies and
46:47
Speaker 1: from a lot of small businesses, like I think about
46:50
Speaker 1: some of the small and mid size PBMs inclusive, and
46:54
Speaker 1: I think about some of the smaller insurers.
46:56
Speaker 2: I think offices were really.
46:58
Speaker 1: Receptive to those messages because is those folks serve the
47:03
Speaker 1: residents of their states and their districts. And I think
47:06
Speaker 1: candidly there was so much lobbying from all directions on
47:10
Speaker 1: this front that it made for better policy. I think
47:14
Speaker 1: Polly and I were much more rigorous in terms of,
47:19
Speaker 1: you know, the microscope. We would expose every provision we
47:22
Speaker 1: wrote to because we knew that a lot of vested
47:25
Speaker 1: interests cared very passionately, and we're going to be talking
47:28
Speaker 1: to our offices.
47:29
Speaker 2: And we wanted to make sure that we could.
47:31
Speaker 1: Justify all of the provisions and really incorporate member perspectives.
47:36
Speaker 2: So it's always going to be fraught with healthcare.
47:39
Speaker 1: I will never begrudge anyone for, you know, conveying their interests,
47:43
Speaker 1: but it was This was probably one of the most
47:47
Speaker 1: frenzied experiences in terms of lobbying activity on the hill
47:52
Speaker 1: with the Congressional Budget Office piece. I'm very optimistic on this.
47:56
Speaker 1: I found that when we worked with CBO, A they're
48:01
Speaker 1: really good, hardworking people over at CBO. And I think,
48:06
Speaker 1: you know, there's this imagined universe sometimes where we picture
48:10
Speaker 1: like hundreds of thousands of CBO analysts working.
48:14
Speaker 2: On any given project. You know, the reality is coming
48:18
Speaker 2: is not fun CBO to that level, and.
48:21
Speaker 1: So oftentimes you gotter, yeah, right, you've got a few
48:25
Speaker 1: folks who are working on massive portfolios.
48:27
Speaker 2: What I found is CBO was.
48:30
Speaker 1: Incredibly receptive to we would send them reports, studies, Greg's,
48:36
Speaker 1: you guys were extremely helpful to us in terms of,
48:40
Speaker 1: you know, giving us access to hey, here is a
48:43
Speaker 1: state level report you guys might have missed.
48:46
Speaker 2: By and large, the.
48:47
Speaker 1: Federal government, you know, could could afford to spend more
48:50
Speaker 1: time looking at state level information. And so again I
48:53
Speaker 1: think we really took seriously when CBO said we we
48:58
Speaker 1: want to see more research, we want to see evidence,
49:00
Speaker 1: we want.
49:01
Speaker 2: To talk to folks.
49:02
Speaker 1: And it was telling to me that when CBO scored
49:06
Speaker 1: part D PBM compensation D linking, but also the commercial
49:11
Speaker 1: market PBM D linking, they score those as reducing reducing
49:17
Speaker 1: the deficit in both cases by by really substantial amounts.
49:21
Speaker 1: I think it suggested a really thoughtful process on their
49:24
Speaker 1: part in a real open mindedness because it was a
49:27
Speaker 1: policy they hadn't been asked to score in the past
49:30
Speaker 1: with issues like rebates. What it suggests to me is
49:34
Speaker 1: you've got folks at the Congressional Budget Office with an
49:36
Speaker 1: open mind, and I think these these guys love data
49:41
Speaker 1: and they love hearing from folks with hey, here's our perspective.
49:45
Speaker 1: That doesn't mean that they're going to agree with all
49:48
Speaker 1: of it, or that they're going to look at any study,
49:50
Speaker 1: you know, with eyes closed and say, oh, I'm sure
49:54
Speaker 1: these findings are perfect. But I think there is a
49:58
Speaker 1: real opportunity for full across the healthcare sector to leverage
50:03
Speaker 1: some of this state data to help assist again folks
50:08
Speaker 1: at CBO and folks on Capitol Hill with understanding how
50:12
Speaker 1: these complex policies play out in practice.
50:16
Speaker 2: And again, I think we had a really positive experience
50:19
Speaker 2: in that context.
50:20
Speaker 1: You're right with the rebate rule. I think the scores
50:23
Speaker 1: were inflated, But I would also say CBO, in the
50:27
Speaker 1: Office of the Actuary at CMS, they had much less
50:31
Speaker 1: experiential real world.
50:32
Speaker 6: To day, a different time.
50:33
Speaker 7: Yeah, it's a different time and times change, and yeah,
50:36
Speaker 7: data data evolves.
50:38
Speaker 6: Now you mentioned poly a lot so and I think
50:40
Speaker 6: we touched on this, but just.
50:42
Speaker 7: Just for listeners, right, Polly, was was your Democrat Democrat
50:46
Speaker 7: counterpart on Senate Finance Committee and one of the cool
50:49
Speaker 7: things I think be great just for listeners and pharmacists.
50:53
Speaker 7: Know this is like how closely two of you are,
50:56
Speaker 7: both two of the smartest on the hill back to
50:58
Speaker 7: the smartest of the country, not pharmists either, right, on
51:02
Speaker 7: a lot of this stuff, but you guys worked incredibly
51:05
Speaker 7: closely on this together.
51:07
Speaker 6: You also spent a lot of time on.
51:09
Speaker 8: It, like a lot of time, and I think it
51:13
Speaker 8: speaks to the bipartisan nature. But I mean, like this
51:16
Speaker 8: was I mean, is it fair to say and correct
51:18
Speaker 8: me if I'm wrong, but like this was, this was
51:20
Speaker 8: a priority for you all.
51:21
Speaker 6: It's something that.
51:22
Speaker 7: Really it seemed like you all were got legitimately passionate about.
51:27
Speaker 2: You hit the nail on the head.
51:28
Speaker 6: Greg.
51:28
Speaker 1: It's before the proudest thing I worked on on Capitol
51:32
Speaker 1: Hill in my time there. And I know that the
51:34
Speaker 1: provisions have not been enacted yet, but I remain really optimistic,
51:38
Speaker 1: and again not speaking on behalf of my firm or
51:41
Speaker 1: on any clients, but I remain optimistic they will and
51:44
Speaker 1: I think the bipartisan work stem for from I think
51:48
Speaker 1: Polly and I we took a practical, realistic approach, and
51:52
Speaker 1: we recognize that bipartisanship does, generally speaking, make for better policy.
51:59
Speaker 1: You pressure test each other's ideas, You ensure that you're
52:02
Speaker 1: bringing in a wide array of perspectives. I look at
52:05
Speaker 1: the Senate Finance Committee on the Democrat side, You've got
52:09
Speaker 1: Senators Warren and Sanders. You've also got folks like Senator Warner.
52:13
Speaker 1: And I look at the Republican side, you know you've
52:16
Speaker 1: got Senator Marshall, Senator Blackburn, Senator fun Tillis. These are
52:20
Speaker 1: folks with a really wide range of perspectives, and I
52:23
Speaker 1: think that helped us to pressure test and inform our policymaking.
52:27
Speaker 1: And I remember when Senator Scott, when I first started
52:30
Speaker 1: working for him, he was on not just the Senate
52:33
Speaker 1: Finance Committee, but also the other key Health Committee, the
52:36
Speaker 1: Help Committee, the Health, Educational, Labor and.
52:38
Speaker 2: Pensions and well more.
52:40
Speaker 1: Alexander was the chairman at the time and Patty Murray
52:44
Speaker 1: was the ranking member, And I remember Chairman Alexander would
52:47
Speaker 1: talk across a number of hearings about the split screen
52:51
Speaker 1: of Congress.
52:52
Speaker 2: We're on one side.
52:54
Speaker 1: You've got a lot of the political noise and the
52:56
Speaker 1: shirts and skins partisan exercises on an issue like the IRA.
53:01
Speaker 1: You know, I was the lead GOP staffer on those
53:03
Speaker 1: drug issues. We didn't care for the bill. You know,
53:07
Speaker 1: we fought tooth and nail with respect. But that's on
53:11
Speaker 1: that side of the split screen. And again, I think
53:13
Speaker 1: cable news wise, and just news in general wise, that's
53:17
Speaker 1: where a lot of the attention of the public is directed.
53:21
Speaker 1: The other side of that split screen, you know, with
53:25
Speaker 1: Alexander and Murray was the fact that they were churning
53:28
Speaker 1: out by partisan healthcare, education, pensions bills on a weekli
53:33
Speaker 1: or monthly basis, And I think that was a tried
53:36
Speaker 1: and true model that.
53:37
Speaker 2: For me, I always suggested that by partisanship was the
53:42
Speaker 2: secret sauce.
53:44
Speaker 1: And again, as you mentioned, Greg, PBM reform was a
53:47
Speaker 1: personal passion project for me, for Polly, and I should
53:50
Speaker 1: say for many of our colleagues across a lot of
53:53
Speaker 1: offices in both chambers, who were terrific champions and collaborators.
53:59
Speaker 2: But it look it was a massive time commitment.
54:02
Speaker 1: I'm shocked my hair is not turned gray yet, not
54:07
Speaker 1: at all not remoting Greg, but the reality is this
54:12
Speaker 1: was I think it was our top healthcare priority, and
54:15
Speaker 1: I think it should be encouraging for folks listening to
54:19
Speaker 1: this to know that even if the noise around Congress
54:24
Speaker 1: is devoted to other topics which I will not touch
54:27
Speaker 1: with a ten foot pull on any given day, the
54:30
Speaker 1: actual work getting done behind the scenes in a given
54:33
Speaker 1: week on Capitol Hill is by and large bipartisan. It's
54:38
Speaker 1: by cameral, it's thoughtful, and it's unsexy, and sometimes unsexy
54:43
Speaker 1: politics make for better policy and improve the odds that
54:48
Speaker 1: things can get done. So again, I've remained an optimist
54:53
Speaker 1: at heart, and I think the experience of working on
54:56
Speaker 1: a bipart basis and seeing Senators Crapo and Widen partners
55:00
Speaker 1: so effectively, to me, it's a really positive signal in
55:05
Speaker 1: the midst of what I know can be a really
55:07
Speaker 1: partisan political moment.
55:09
Speaker 7: Well, I don't know that we could end it on
55:11
Speaker 7: a better note than that. You know, we're gonna have
55:16
Speaker 7: you back if you're willing, for sure, because there's just
55:18
Speaker 7: still so much to cover.
55:20
Speaker 6: You know.
55:23
Speaker 7: I thank you because I feel very much like you
55:25
Speaker 7: gave our listeners insights and perspectives that it's just so
55:29
Speaker 7: hard to get right, like it's just it's it's its
55:32
Speaker 7: own thing up there, and even pharmacists who fly in
55:36
Speaker 7: and meet with their congress people, right, like, you've given
55:39
Speaker 7: a perspective that so few have, combined with the fact
55:44
Speaker 7: that you're just so nuanced on this issue, right, I mean,
55:47
Speaker 7: I couldn't be happier with with with sort of the
55:49
Speaker 7: subject matter recovered, and again there's plenty more to talk about.
55:53
Speaker 7: So thank you so so much and just appreciate you
55:56
Speaker 7: being on.
55:57
Speaker 2: Thank you so much for the opportunity. Creig really appreciate it.