Latest / Pharmacy Podcast Network / Cutting Through the Noise: A nuanced discussion on MFN, Rebates, and Premiums | PBM Reform

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Cutting Through the Noise: A nuanced discussion on MFN, Rebates, and Premiums | 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 Welcome to the Pharmacy Podcast Network.
0:32
Speaker 2: Welcome to the PBM Reform Podcast, where we dive deep
0:36
Speaker 2: into the world of pharmaceutical benefit management, cutting through the
0:39
Speaker 2: noise to uncover the truth. Since twenty nineteen, we've been
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Speaker 2: your go to source for the latest on how PBMs
0:47
Speaker 2: impact patient care, drug pricing, and the very future of pharmacy.
0:52
Speaker 2: Here we champion the role of pharmacists, the most knowledgeable
0:56
Speaker 2: advocates for medication safety and expertise. Join us as we
1:01
Speaker 2: expose and generate discussions that are reshaping healthcare and explore
1:06
Speaker 2: how we build a better payment system which focuses on
1:09
Speaker 2: advancing pharmacy care.
1:16
Speaker 3: Welcome to the PBM Reform Podcast. My name is Todd Yuriy,
1:20
Speaker 3: founder of the Pharmacy Podcast Network. We started the PBM
1:24
Speaker 3: Reform Podcast in twenty nineteen to educate our healthcare professionals
1:29
Speaker 3: or pharmacists, our physicians, our nurse practitioners, and other stakeholders
1:33
Speaker 3: throughout the healthcare industry as to what's happening at the ground.
1:37
Speaker 3: Groups of PBM reform desperately needed for the entire healthcare system.
1:43
Speaker 3: And now I'd like to introduce the Vice President of
1:45
Speaker 3: Healthcare Policy and General Counsel for APCI, greg Rybold.
1:52
Speaker 1: Yes, thank you, Todd, appreciate the introduction, and excited to
1:56
Speaker 1: be joined today by doctor Robert Propovian. You know, somebody,
2:01
Speaker 1: there's a few voices in pharmacy and healthcare that I
2:03
Speaker 1: always make sure to take the time to follow. There's
2:06
Speaker 1: a lot of noise out there, and doctor Propovian is one.
2:10
Speaker 1: Anytime he releases something, I'm proud to say I'm probably
2:14
Speaker 1: one of.
2:14
Speaker 4: The first to read it.
2:16
Speaker 1: Just just great admirer of your work and the insights
2:19
Speaker 1: that you provide into healthcare and drug pricing. So first off,
2:22
Speaker 1: just thank you so much for being here.
2:25
Speaker 5: For giving me this is a great opportunity for us
2:29
Speaker 5: to have a discussion. We've known each other a long time, right,
2:32
Speaker 5: but this is always good to have a live discussion
2:35
Speaker 5: about these topics.
2:37
Speaker 1: Yes, and look, I think most of our listeners are
2:40
Speaker 1: pharmacists and healthcare policy people, so most of our listeners
2:44
Speaker 1: I'm sure know who you are. But would you mind
2:46
Speaker 1: just giving a brief introduction, little background and some of
2:50
Speaker 1: the work that you're doing.
2:51
Speaker 5: Now, So it's farm d trained at the University of
2:55
Speaker 5: Southern California. My clinical backgrounds and infectiousseases and audiomend disorders,
3:00
Speaker 5: but I had never worked as a pharmacist. I went
3:02
Speaker 5: back and got a degree in Pharmaceutical economics and policy
3:05
Speaker 5: again from USC and have been working in the drug pricing, spending,
3:10
Speaker 5: affordability and access environment for the last I would say
3:16
Speaker 5: decade and a half two decades. I was with a manufacturer,
3:20
Speaker 5: Pfeiser Farms Incorporated for a very long time, ended up
3:25
Speaker 5: being VP of Government Affairs in their DC office, but
3:28
Speaker 5: I did many other jobs, and since twenty and twenty
3:32
Speaker 5: I left Pfeiser, I opened my own consulting firm, Conquest Advisors.
3:36
Speaker 5: But I also have affiliations with few organizations that I
3:39
Speaker 5: worked with, one of them being Pioneer Institute. That we
3:43
Speaker 5: can talk about more about what we're doing in the
3:46
Speaker 5: IRA Inflation Reduction Act and pocket costs for patients with
3:51
Speaker 5: Global Healthy Living Foundation with regards to premiums and insurance
3:55
Speaker 5: premiums and so on and so forth, and then also
3:58
Speaker 5: with the Progressive Policiesitude, which frankly we wrote a paper
4:02
Speaker 5: about I was looking at about two and a half
4:04
Speaker 5: years ago, talking how the stuff that was being done
4:08
Speaker 5: both on the state level and on the federal level
4:10
Speaker 5: is going to completely disrupt the drug pricing model in
4:13
Speaker 5: the US, And it is happening. We see it every day,
4:16
Speaker 5: and you know, so I'm happy to say I'm affiliated
4:20
Speaker 5: with all three. And then I'm also affiliate with University
4:23
Speaker 5: of Southern California School of Pharmacy. I'm on the board chair.
4:26
Speaker 5: So what you will hear is also the perspective of
4:29
Speaker 5: somebody who's basically very much in tune or cares about
4:33
Speaker 5: this pharmacy as a profession or a pharmacist as a profession.
4:36
Speaker 1: Absolutely, and you know you touched on, you know, some
4:39
Speaker 1: of the different organizations you work with and some of
4:41
Speaker 1: the things that you've worked on in that capacity. And frankly,
4:45
Speaker 1: I think we could probably have easily an hour on
4:48
Speaker 1: like every one of these subjects. But you know, one
4:51
Speaker 1: of the things that I just love about the work
4:53
Speaker 1: you do is, you know, there's been so many really
4:56
Speaker 1: central policy moves in pharmacy in the last year or two,
5:02
Speaker 1: maybe a little longer. Right, Obviously, I talk a lot
5:04
Speaker 1: and spend a lot of time on PBM reform. I
5:06
Speaker 1: think PBM reform touches a lot of that. But whether
5:09
Speaker 1: it's the Inflation Reduction Act, whether it's three point forty
5:12
Speaker 1: b PBM assertions on premiums, or most Favored Nations, like
5:16
Speaker 1: you have, like you know, you have been a clear, loud,
5:20
Speaker 1: articulate voice, cutting through a lot of the noise, you know,
5:23
Speaker 1: and really looking at data.
5:26
Speaker 4: To tell the story.
5:27
Speaker 1: But I think most recently as most Favored Nations, you
5:30
Speaker 1: came out with a piece I think within about a
5:33
Speaker 1: month maybe a month and a half ago, really regarding
5:37
Speaker 1: President Trump's Most Favored Nations policy. He had come out
5:41
Speaker 1: I think in early June with an executive order on
5:44
Speaker 1: most Favored Nations, and you had some I think just
5:47
Speaker 1: really interesting insights with regard to the Most Favored Nations
5:51
Speaker 1: policy as well as the direct to consumer sort of
5:54
Speaker 1: model that seems to be born out of that.
5:57
Speaker 4: Could we talk a little bit about that first.
5:59
Speaker 5: Just to kick us off heepy to I mean, we
6:02
Speaker 5: wrote the paper Pioneer Institute about you're right about two
6:06
Speaker 5: three months ago it was published. There was a longer
6:08
Speaker 5: paper talking about the Inflation Reduction Act, but we also
6:11
Speaker 5: like sort of tied into the most Favored Nation and
6:14
Speaker 5: the reason that we tied into it is because in
6:17
Speaker 5: our opinion, and Bill Smith and I co authored the paper,
6:20
Speaker 5: is that the federal government already has the tools to
6:24
Speaker 5: the Inflation Reduction Act to institute most favored Nation. So
6:28
Speaker 5: this whole discussion, public discussion about the most favored nation
6:32
Speaker 5: is not going to happen in the US market. They
6:34
Speaker 5: already have the tools to be able to do it.
6:36
Speaker 5: All they have to do the federal government goes to
6:39
Speaker 5: CMS and says, you negotiate based on X country and
6:44
Speaker 5: the price should be based on a reference of France
6:47
Speaker 5: or Italy, and right there you have introduction of farm
6:51
Speaker 5: based pricing in the US market. So without a doubt,
6:54
Speaker 5: they have the tools to do it. So this whole
6:57
Speaker 5: discussion in the policy space that people are trying to say, well,
7:01
Speaker 5: it's never going to happen and they don't have the
7:03
Speaker 5: ways to do it, they absolutely have the ways to
7:05
Speaker 5: do it. And that was the argument that we made
7:07
Speaker 5: in that paper that came out, and it was a
7:10
Speaker 5: larger paper talking about inflation reduction of that PODCET costs
7:14
Speaker 5: for patients. Then a bottom a couple of weeks ago
7:17
Speaker 5: when President Trump announced with Pfizer, actually the whole idea
7:22
Speaker 5: of trump RX and the most Favored Nation now being
7:25
Speaker 5: introduced to the medicaid program. We wrote another piece that
7:30
Speaker 5: was published on LinkedIn, and in that one we didn't
7:33
Speaker 5: really focus on the MFN as much because that's specifically
7:36
Speaker 5: geared towards medicaid programs, and we can have a discussion
7:41
Speaker 5: of how impactful that's going to be. I mean, I
7:44
Speaker 5: have some opinions on that, but again we reiterated the
7:48
Speaker 5: issue that the federal government already has the tools to
7:51
Speaker 5: ira to implement MF in the pricing model in the US,
7:56
Speaker 5: especially with the drugs, the MFP drugs, that is going
8:00
Speaker 5: to be sort of price setting. But the bigger pit
8:04
Speaker 5: part of the paper was to do with TRUMP or
8:06
Speaker 5: X and the whole direct to consumers selling of medicines
8:10
Speaker 5: by manufacturers. And you know, both Bill and I are
8:15
Speaker 5: not opposed to it. You know, we're very much in favor.
8:17
Speaker 5: We think competition is a good thing in the marketplace.
8:20
Speaker 5: But we also believe that four things specifically need to
8:23
Speaker 5: happen for it to really take off and be meaningful
8:27
Speaker 5: for patients. If not, it's just going to be another
8:29
Speaker 5: federal government promise that's going to fall short and it's
8:32
Speaker 5: going to frustrate everyone. So first and foremost we make
8:36
Speaker 5: the argument that, look, if you're going to have this
8:38
Speaker 5: direct to consumer pricing, whether it's sold through trump rex
8:42
Speaker 5: or you know, greg RX or Robert RX, doesn't matter
8:47
Speaker 5: that anytime a patient decides, First of all, it's a
8:49
Speaker 5: good thing because you're providing tools for them to shop around.
8:53
Speaker 5: Right now, you have transparent pricing that they can shop around,
8:56
Speaker 5: especially for everybody in the marketplace that we have a
8:59
Speaker 5: deductible or co insurances that is tied to the retail price.
9:03
Speaker 4: It's a good thing to be.
9:04
Speaker 5: Able to have competition, but for it to happen, first
9:07
Speaker 5: and foremost is that if as a consumer, I'm doing
9:11
Speaker 5: the right thing, I'm applying consumerism in the healthcare system
9:16
Speaker 5: and I'm going and shopping around. I'm buying the product
9:19
Speaker 5: from whatever pharmacy it is that is selling it directly
9:23
Speaker 5: to me, that whatever I pay out of pocket, that
9:25
Speaker 5: should count towards my deductible or to my maximum out
9:29
Speaker 5: of pocket costs. The reason being is that if it doesn't,
9:32
Speaker 5: then you're providing patients with two bad choices. One is
9:36
Speaker 5: to go and pay out a pocket for something less
9:39
Speaker 5: than they would put pay for example, through their insurance model,
9:44
Speaker 5: and that doesn't count towards the deductible or or the
9:48
Speaker 5: opposite is to overpay for it through their insurance model,
9:52
Speaker 5: so it will count towards the deductible or maximount of
9:54
Speaker 5: pocket costs. So first and foremost that needs to happen.
9:58
Speaker 5: The second part that we argued is that look, if
10:01
Speaker 5: you are a self insured individual you buy your insurance,
10:05
Speaker 5: or you are an employee, if you get a better
10:08
Speaker 5: deal for the product going to one of these sites,
10:11
Speaker 5: whether Trump RX again at greg or X or Robert
10:14
Speaker 5: or X, you should be allowed to do that. You
10:16
Speaker 5: know that you should be able to see that you
10:19
Speaker 5: get a better deal to buy X drug from that
10:22
Speaker 5: site rather than what the PBM is charging you.
10:25
Speaker 4: And we said that you should not be.
10:27
Speaker 5: Penalized for that, and that should be a lot to
10:30
Speaker 5: be done without like sort of you're not storing or
10:36
Speaker 5: doing anything problematic with the with the PBM. The third thing, frankly,
10:41
Speaker 5: has to be an introduction of generics. Look, I think
10:44
Speaker 5: having these sites are great, but you should have brand
10:47
Speaker 5: and generic drugs and as a competition in the marketplace,
10:51
Speaker 5: for example with Cuban RX or you know, cost Plus
10:55
Speaker 5: drug Store, which just call or Costco or somebody else
10:58
Speaker 5: that should include because for a long time, and Greg,
11:02
Speaker 5: you know this, we've had this discussion, you and I
11:04
Speaker 5: actually about how consumers are bypassing insurance model and going
11:09
Speaker 5: directly and buying cash prices from these pharmacies because it's cheaper.
11:13
Speaker 5: So the consumer has already figured out in the generic space,
11:16
Speaker 5: and we've been doing that for a while. And you know,
11:18
Speaker 5: I always point out that it's not only cheap for
11:21
Speaker 5: the consumers, but it's also cheap for payers or the
11:25
Speaker 5: actual payers like the federal government or employers for example.
11:29
Speaker 5: I always point out that the Schaeffer Institute study that
11:32
Speaker 5: was done with Costco that over two years, they went
11:35
Speaker 5: ahead and compared prices of what Costco cash prices would
11:39
Speaker 5: have been compared to what the federal government reimburse vms.
11:44
Speaker 5: We're dispensing the same exact generics, right, the top two
11:47
Speaker 5: hundred generics, same exact throat, same exact dosa, same exact quantity,
11:51
Speaker 5: and the federal government over that two year period would
11:54
Speaker 5: have say four point five billion dollars, yes, on the
11:56
Speaker 5: two hundred generics.
11:58
Speaker 1: Yeah, yeah, it's it's so you know it was something
12:02
Speaker 1: and I think we probably talked about this specific study
12:05
Speaker 1: at one point, but I remember Three Actions came out
12:07
Speaker 1: with a study a few years back and they looked
12:09
Speaker 1: at Medicare Part D prices and in the year and
12:13
Speaker 1: they basically looked at over a thirty month period, and
12:15
Speaker 1: over that thirty month period, generics had deflated, according to
12:20
Speaker 1: Nateak around nine percent eight point nine percent something like that.
12:24
Speaker 1: And over that same period, PBMs and part D had
12:28
Speaker 1: inflated the prices in the aggregate by about fifty one percent. Right,
12:31
Speaker 1: so it was like there was like a sixty percent
12:33
Speaker 1: swing between as prices were actually you know, really devaluing
12:39
Speaker 1: in terms of pharmacy acquisition. It was going just up
12:41
Speaker 1: and up and up at the pharmacy counter for seniors.
12:44
Speaker 5: So well they and you know this started right with
12:47
Speaker 5: the independent pharmacies, right, we had the for example, I
12:50
Speaker 5: remember talking five six years ago, right, it was around
12:53
Speaker 5: the pandemic with BLUEBEARR pharmacy in Pennsylvania.
12:56
Speaker 4: Absolutely, it was the first.
12:57
Speaker 5: One really to talk about it publicly and say, look,
13:00
Speaker 5: come buy it in cash. I can give you better
13:02
Speaker 5: prices than what you put into your insurance.
13:05
Speaker 4: And you know, he continues to do that. So absolutely
13:08
Speaker 4: he continues to do that.
13:09
Speaker 5: And you have Freedom Pharmacy in Ohio, and you have
13:12
Speaker 5: all these other pharmacies that have popped around the place.
13:15
Speaker 5: And I can tell you my personal experience, and I'm
13:18
Speaker 5: probably the worst consumer in the world because I'm a
13:21
Speaker 5: little lazy. But my out of pocket costs every three
13:24
Speaker 5: months for my generic lippatour is around twenty dollars. If
13:30
Speaker 5: I just went three blocks down and need my prescription
13:33
Speaker 5: to Costco and paid the cash price for that same drugs,
13:36
Speaker 5: it would be fifteen dollars. So I would say, I
13:40
Speaker 5: would say, now I don't do it. I'm lazy, and
13:43
Speaker 5: I wanted to count towards my deductible, which it wouldn't
13:45
Speaker 5: if I paid cash at Costco. So those are the
13:47
Speaker 5: things that we need to fix in the model if
13:49
Speaker 5: we really want to institute this consumerism. And the last
13:53
Speaker 5: thing Greg that we said the number four point, which
13:55
Speaker 5: is super important. Look, we're getting transparent pricing that in
13:59
Speaker 5: the marketplace more and more. Right with MFP. We know
14:03
Speaker 5: of the first ten drugs when they were negotiated, what
14:06
Speaker 5: the net prices that the government is paying. And Bill
14:09
Speaker 5: and I argue is that if you know, the net
14:11
Speaker 5: price in the market is publicly available through something like
14:15
Speaker 5: an MFP, right that that price should be offered to
14:20
Speaker 5: the consumer, to the patient who's buying it in cash.
14:23
Speaker 5: So you cannot offer a higher price for the consumer
14:27
Speaker 5: than what the federal government is paying. And everybody knows
14:30
Speaker 5: what they're paying for because they release this number.
14:33
Speaker 4: Right.
14:34
Speaker 5: So if the discount on drug X is sixty percent
14:39
Speaker 5: that the federal government is getting through the price setting,
14:43
Speaker 5: that should be the discount that the consumer gets. There's
14:46
Speaker 5: no reason why to choose the consumer to paying a
14:50
Speaker 5: premium over the federal government where everybody knows what the
14:53
Speaker 5: net price.
14:55
Speaker 4: What the net price is in.
14:56
Speaker 5: Those cases those drugs you have to offer them. For example,
15:01
Speaker 5: it will be a very nice case study coming out
15:03
Speaker 5: right in about maybe twenty days. I mean they're supposed
15:07
Speaker 5: to release at any time. The next set of drugs
15:11
Speaker 5: for IRA is going to come out. Right in that
15:14
Speaker 5: next set of drugs for the IRA price setting, you
15:17
Speaker 5: have vegovian ozampic, right, yes, So we'll see what the
15:22
Speaker 5: net price is now that the government's negotiating or going
15:25
Speaker 5: to set on those prices, and if it's anywhere below
15:29
Speaker 5: the five hundred dollars that Noah Nordisk is offering patients.
15:34
Speaker 5: Then there should drop their price to what the federal
15:36
Speaker 5: government's going to pay. You know, consumers should not be
15:40
Speaker 5: charged at premium period at any time. And that's those
15:44
Speaker 5: are the four things that we talked about.
15:46
Speaker 1: Yeah, yeah, and again I thought those were those were
15:49
Speaker 1: well articulated. You also circled back to the you know,
15:54
Speaker 1: in addition, in the insured market, you also circled back
15:58
Speaker 1: and talked a little bit about rebates and sort of
16:00
Speaker 1: fixing that issue as well.
16:02
Speaker 4: Correct.
16:03
Speaker 5: So it's like Greg, I mean you and I know this.
16:05
Speaker 5: I mean, unless you fix the contracting model that currently
16:09
Speaker 5: exists in this market, where it's a rebate contracting model
16:13
Speaker 5: and that fees and rebates are based on the retail
16:16
Speaker 5: price of the medicine, the system is then set up.
16:19
Speaker 5: Unless you change that model, it's set up to have
16:21
Speaker 5: higher prices and higher rebates and higher fees. So having
16:25
Speaker 5: set all of this trump RIX, MFN, I RA, whatever
16:28
Speaker 5: you want to put it, unless you fix the rebate
16:31
Speaker 5: contract model and get rid of it completely, that where
16:34
Speaker 5: you have net price contracting and period, so there are
16:36
Speaker 5: no fees, nothing that goes into as a percentage and
16:40
Speaker 5: people PBMs get paid for services rendered as a flat fee.
16:45
Speaker 4: You know.
16:46
Speaker 5: So for example, if Greg as you have a PBM
16:49
Speaker 5: and you do a wonderful job and you have all
16:51
Speaker 5: these patients coming to you, you'll make more money because
16:54
Speaker 5: you will get per patient service fee for each patient instead.
16:59
Speaker 4: Of a percentage. You know what.
17:02
Speaker 5: In fact, there are two days. Number one, rebate contracting
17:06
Speaker 5: doesn't have to exist because as I always put it
17:09
Speaker 5: on my lenked inposts at the end, the largest insure
17:13
Speaker 5: in the largest state in the Union doesn't use rebate
17:16
Speaker 5: contracting and doesn't use the PBM to do drug price negotiation,
17:20
Speaker 5: and they get very nice net price costs. And that's tizo.
17:25
Speaker 5: The second part is PBMs exist in the current market
17:30
Speaker 5: without having to have rebate contracting, and they do it
17:34
Speaker 5: based on flat fees as service is rendered, and one
17:38
Speaker 5: of them being capital RX for example, and Costco is
17:42
Speaker 5: another one. They pass through everything and they just take
17:45
Speaker 5: a service fee for every patient that they service. And
17:48
Speaker 5: somehow they can survive and they can get they can
17:51
Speaker 5: do all these things, but the large, the three or
17:54
Speaker 5: four large PBMs that control eighty percent of the market,
17:57
Speaker 5: cannot and they've sold everybody that beat bamboozled everybody, including
18:02
Speaker 5: the federal government, the states, the employers, to thinking that
18:06
Speaker 5: the only model that works is a really big contracting model.
18:09
Speaker 1: I agree, and unfortunately, I think they've gotten a lot
18:12
Speaker 1: of a lot of folks addicted to those rebates as well, right,
18:15
Speaker 1: I mean, lord knows, I've had conversations with state agencies
18:20
Speaker 1: throughout the country, and they they like those rebates.
18:24
Speaker 5: They like those rebates because there is no control over
18:27
Speaker 5: what they do with them, right, So they get all
18:30
Speaker 5: this rebate dollar and in certainly in most states, they
18:34
Speaker 5: don't have any restrictions that they have to be put
18:36
Speaker 5: back into the medicaid program or even to pay for pharmaceuticals,
18:40
Speaker 5: and they can put into general funds and then they
18:43
Speaker 5: use it to fill in pot holes and things like that.
18:46
Speaker 5: That's or underfunded programs that the state has. Same thing
18:50
Speaker 5: implies with employers. They've been bamboozled into thinking you pay
18:54
Speaker 5: a higher price, you get this rebate check from us,
18:57
Speaker 5: and then you can backfill your premiums. Well, if you're
19:00
Speaker 5: not paying the high price, then what's how is that
19:03
Speaker 5: going to impact? And I always explained this to people,
19:07
Speaker 5: right when they tell me, well, the net price is
19:10
Speaker 5: advantages or is the same? I said, yeah, it's advantages
19:14
Speaker 5: that it has an advantage or is the same for
19:17
Speaker 5: the PBM, not necessarily for the employer or to find
19:21
Speaker 5: the actual payer in the market, because they get a
19:24
Speaker 5: percentage of that rebate. Whether it's one percent or ten
19:26
Speaker 5: percent or twenty percent, doesn't matter. They still keep a
19:29
Speaker 5: percentage of those rebates.
19:31
Speaker 1: Yes, you know something that I always like that you do.
19:35
Speaker 1: You do a really good consistent job on this issue
19:38
Speaker 1: as well as the IRA, which hopefully we can we
19:40
Speaker 1: can talk about next and there's some overlap there for sure,
19:43
Speaker 1: but you always do a really good job of reminding
19:45
Speaker 1: people that in the first Trump administration he was willing
19:51
Speaker 1: to cut to the really go to the core of
19:53
Speaker 1: that right and sort of by tackling rebates centrally and
19:58
Speaker 1: removing the safe harbor for drug manufactured a PBM rebate dollars.
20:04
Speaker 5: We continuously say that in our papers is that Trump
20:07
Speaker 5: and I love point needs to learn from Trump one point,
20:10
Speaker 5: which is what he was doing is the absolutely the
20:14
Speaker 5: best thing that was going to happen, which is get
20:17
Speaker 5: rid of rebate contracting in the Medicare program, and that
20:21
Speaker 5: the commercial segment is going to adopt the same model,
20:26
Speaker 5: and we all say, like he like has amnesia or something.
20:30
Speaker 5: He doesn't remember the good stuff that came out as
20:32
Speaker 5: first administrations, which one of them was to get rid
20:35
Speaker 5: of rebate contracting in medicare.
20:37
Speaker 1: That's right, and and you know they obviously got that
20:39
Speaker 1: through the regulatory process. And I think this is a
20:41
Speaker 1: perfect segue into the IRA, because what happened is the
20:44
Speaker 1: IRA sort of pulled pulled the carpet out from under
20:48
Speaker 1: Trump's first term executive order and the regulations by basically
20:52
Speaker 1: delaying implementation for the Trump rebate rule, kicking it down
20:56
Speaker 1: the road to what I think it was like twenty
20:58
Speaker 1: thirty two or or something like that. But so that
21:02
Speaker 1: leads into I think the next the next thing that
21:05
Speaker 1: I was hoping to talk about that you've done just
21:08
Speaker 1: fascinating work on, is what's happened to out of pocket
21:12
Speaker 1: costs for patients in light of the negotiation process and
21:16
Speaker 1: the IRA, and some I think just astounding, maybe not
21:20
Speaker 1: surprising to everybody, maybe not surprising to you. And we're
21:24
Speaker 1: talking about this a little bit off air, right, but
21:26
Speaker 1: I think a lot of people that this is eye
21:29
Speaker 1: opening stuff that you've uncovered.
21:32
Speaker 5: Greg one of I mean the way we talk about it,
21:34
Speaker 5: and you know you can anybody can go to the
21:37
Speaker 5: Pioneer website Pioneer Institute website and look at our IRA tool.
21:41
Speaker 5: We put everything publicly available. We don't try to make
21:45
Speaker 5: data up. This is not some modeling exercise. We actually
21:50
Speaker 5: acquire out of pocket costs data for the MFP drugs.
21:54
Speaker 5: So these are the first nine drugs, ten drugs. We
21:57
Speaker 5: excluded insulins because insulins are already price came yes yeah, by
22:02
Speaker 5: by both law and also voluntarily by the pharma companies
22:05
Speaker 5: the price caps, so we didn't include them. But we
22:08
Speaker 5: have the first nine drugs. We have the next fifteen
22:10
Speaker 5: already ready to go. We're just waiting for the release
22:13
Speaker 5: of the prices from the federal government. But the tool
22:16
Speaker 5: is very interesting because it tracks quarter over quarter what
22:20
Speaker 5: the changes in out of pocket costs are. So let's
22:22
Speaker 5: step back and why did we do this, the reason
22:25
Speaker 5: we did this, and by the way, it's not just
22:27
Speaker 5: about out of pocket costs. We're going to I'm going
22:28
Speaker 5: to explain to you what we're doing next with the
22:30
Speaker 5: tool and trying to figure things out. So remember when
22:35
Speaker 5: you suppress retail prices of medicines, the margins shrink, so
22:41
Speaker 5: in essence, PBMs are going to make less money. Right,
22:44
Speaker 5: as soon as you suppress the retail price, the margin
22:48
Speaker 5: for the rebate is going to shrink, unless pharma companies
22:52
Speaker 5: are going to make up for it. Right, they're going
22:54
Speaker 5: to give even more rebates, but in some cases they
22:56
Speaker 5: can't because then they will be just giving it away
22:58
Speaker 5: for free. So they can't do that, and they won't
23:02
Speaker 5: do that. So we estimated that a few things can
23:06
Speaker 5: happen with the IRA. Number one, let's talk about the
23:08
Speaker 5: good stuff and then potentially what those good stuff can
23:12
Speaker 5: be turned into bad stuff. For example, everybody talks about
23:16
Speaker 5: the two thousand dollars cap, right, which is great. You know,
23:20
Speaker 5: nobody denies that we had a federal programming drugs and
23:25
Speaker 5: all of us in the commercial side already have a
23:28
Speaker 5: cap that didn't have a cap for patient and pocket costs.
23:32
Speaker 5: So the federal government instituted this two thousand dollars. But
23:35
Speaker 5: what the federal government doesn't tell you is that only
23:38
Speaker 5: about one point five million seniors actually went over two
23:42
Speaker 5: thousand dollars, you know, an out of pocket cap. So
23:45
Speaker 5: what is the one point five million. They're super important.
23:47
Speaker 5: We need to protect them. Nobody's denying that. But they
23:50
Speaker 5: make up around three and a half to three to
23:53
Speaker 5: five percent of the seniors who have Medicare party. So
23:57
Speaker 5: it's a small patient population that we're talking about.
24:00
Speaker 1: And so just to be clear that that three to
24:02
Speaker 1: five percent of patients, only three to five percent went
24:07
Speaker 1: over that that two thousand dollars cap anyway, Okay.
24:10
Speaker 5: Right, and this is Kaiser Family Foundation has this data
24:13
Speaker 5: on their website. You can go to look at it yourself.
24:16
Speaker 5: Anybody can't take a look at it. But the thing is,
24:20
Speaker 5: the more important issue is that the average spent for it.
24:25
Speaker 5: Let's talk about LIS versus non alias, right, because if
24:28
Speaker 5: it's an li's patient, look, they generally don't have any
24:31
Speaker 5: out of pocket costs because it's subsidized, right, So let's
24:34
Speaker 5: put them aside. But let's talk about the non alias patients.
24:38
Speaker 5: And again, Kaiser has this data on their website, and
24:41
Speaker 5: we're going to do our own aniles is because we
24:44
Speaker 5: want to put this on our website. The reason being,
24:46
Speaker 5: what do you think the average NONLIS patients spent as
24:51
Speaker 5: a senior? What was the average for all the seniors.
24:54
Speaker 4: You think no, boy, I had no idea less.
24:57
Speaker 5: Than five hundred dollars with four hundred and sixty three
25:00
Speaker 5: dollars annually for the average senior senior. So, in essence, Greg,
25:06
Speaker 5: if you have a two thousand dollars cap, what do you.
25:09
Speaker 4: Think PBMs are going to do? Now?
25:11
Speaker 5: They know that they don't want to go over two
25:13
Speaker 5: thousand dollars cap because that triggers a whole swell of
25:16
Speaker 5: things that they're responsible for all that money, right.
25:19
Speaker 1: So they're going to find ways to get right up
25:23
Speaker 1: to that for more.
25:26
Speaker 5: So, most likely what they will do, and this is
25:29
Speaker 5: what we're trying to create this tool to start monitoring
25:32
Speaker 5: this stuff, is that they are going to probably keep
25:34
Speaker 5: that one and a half million people that went over
25:36
Speaker 5: two thousand, right, that three percent, five percent, They're going
25:40
Speaker 5: to keep that number the same. They're not going to
25:42
Speaker 5: risk going over that one and a half million because
25:44
Speaker 5: their exposure financially exposed significantly significant financial exposure. So the
25:50
Speaker 5: likelihood what they're going to do is that instead of
25:53
Speaker 5: for sixty three, which is the non analyzed average, you
25:56
Speaker 5: will start seeing that creep up, creep up because they
25:59
Speaker 5: see the entire picture for every patient, right, So they
26:03
Speaker 5: can pull levers and increase it slowly. I'm not saying
26:08
Speaker 5: I mean to be honest with you. If I was them,
26:10
Speaker 5: I would go up to nineteen hundred and ninety nine
26:12
Speaker 5: dollars for everyone.
26:13
Speaker 4: That's what they're gonna do, yeah, right, But.
26:15
Speaker 5: The likelihood is that they'll slowly creep that number up,
26:19
Speaker 5: and for every one hundred dollars or two hundred dollars increased,
26:21
Speaker 5: like imagine if it goes for four to sixty three
26:24
Speaker 5: to six sixty three or seven sixty three, they're going
26:28
Speaker 5: to collect a lot of money. So they're going to
26:30
Speaker 5: make up some of the difference that way, right, because
26:34
Speaker 5: they're lost revenue. The second thing, they're gonna.
26:36
Speaker 1: Go ahead, I'm sure, but they would do that by
26:38
Speaker 1: sort of pulling the levers of deductibles, cost sharing obligations,
26:43
Speaker 1: just using various tools to find ways to do that.
26:45
Speaker 5: Because they know that you're paying five dollars a month
26:48
Speaker 5: in generic for that generic, that may increase it to
26:51
Speaker 5: six dollars.
26:51
Speaker 4: A month slowly.
26:53
Speaker 5: They will remember they're talking millions of people, right, and
26:56
Speaker 5: millions of prescriptions. So a dollar here two dollars or
27:00
Speaker 5: three dollars or fifty cents it's going to make a
27:02
Speaker 5: huge revenue gain for that, and because they're loss losing
27:05
Speaker 5: the revenue, they have to make it up. So that's
27:07
Speaker 5: one thing they're going to do. The second thing that
27:09
Speaker 5: we estimated and we already show it in our tool,
27:12
Speaker 5: is this out of pocket costs for this MFP drugs
27:15
Speaker 5: quarter over quarter first quarter twenty twenty four to first
27:18
Speaker 5: quarter twenty twenty five, they went up thirty two percent.
27:23
Speaker 5: The same thing in the second quarter twenty twenty four
27:25
Speaker 5: to twenty twenty five, we went up three percent. Why
27:28
Speaker 5: we went up three percent because you know this how
27:30
Speaker 5: it's devised, the way benefit is devised. Everybody hits there
27:33
Speaker 5: deductible in the first quarter and then it drops because
27:36
Speaker 5: the insurance kicks in, right, So we were surprised that
27:40
Speaker 5: the price differential is not that much. So the most
27:43
Speaker 5: important thing is to do a comparison of quarter to quarter,
27:45
Speaker 5: and that's what our tool does, and we're getting we're
27:48
Speaker 5: acquiring the third quarter data now and we're going to
27:51
Speaker 5: clean it up and probably put it up sometime in
27:54
Speaker 5: mid November. It will come up. So the second thing
27:57
Speaker 5: is that they're going to jack up the thing. The
27:59
Speaker 5: third thing they will do is Remember they put a
28:02
Speaker 5: cap of six percent on premium increases right for the
28:06
Speaker 5: basic plan. So if you have a cap of six percent,
28:10
Speaker 5: guess what you're going to do.
28:11
Speaker 4: Everybody's going to give a.
28:12
Speaker 5: Six percent increase in their premiums. But the important part
28:18
Speaker 5: is that if you go back historically for Part D,
28:20
Speaker 5: the premiums were only increasing one or two percent if
28:23
Speaker 5: any some months. In some years it was flat year
28:26
Speaker 5: over year. So all of a sudden, you've given them
28:29
Speaker 5: a tool to increase about six percent without any kind
28:31
Speaker 5: of penalties or anything else. So that's the third thing
28:34
Speaker 5: they're going to do. Obviously, they're going to go to
28:36
Speaker 5: manufacturers and ask for more money and rebates. They're going
28:39
Speaker 5: to go to manufacturers and ask for more rebates on
28:41
Speaker 5: drugs that are not MFP, drugs that are not ier.
28:45
Speaker 4: They're going to go to manufacturers and.
28:47
Speaker 5: Say, look, Greg pharmaceutical, you have a vaccine. We've never
28:52
Speaker 5: collected rebates on vaccines that Traditionally PBMs don't collect rebates
28:56
Speaker 5: on vaccine. We're going to start collecting rebates on those vaccines,
28:59
Speaker 5: and we're going to start like cherry picking and restricting
29:02
Speaker 5: access access to vaccines. You know, we're going to be
29:06
Speaker 5: they're going to put flu vaccine by the Sino fe
29:08
Speaker 5: versus flu vaccine by another company, and they're to try
29:12
Speaker 5: to control that. So they have a lot of levers
29:15
Speaker 5: to make up for the differential and profitability. And we
29:18
Speaker 5: started at Pioneer looking at the out of pocket for
29:21
Speaker 5: those MFPs, but we're going to start looking at premiums.
29:23
Speaker 5: We're going to look at the average out of pocket
29:25
Speaker 5: costs to spend for these seniors. So there's a lot
29:29
Speaker 5: of ways to look at this as a way for
29:31
Speaker 5: them to make up the difference in loss of revenue.
29:34
Speaker 4: And the data that you looked at really confirms this, right.
29:38
Speaker 5: So patients pocket costs, and so far what I've seen
29:42
Speaker 5: from the Kaiser Foundation data is the same thing. The
29:46
Speaker 5: average out of pocket costs for seniors has gone up
29:48
Speaker 5: for non analyzed patients, and same thing with premiums have
29:51
Speaker 5: started going up.
29:52
Speaker 1: Yeah, and boy, if you open a door, they'll find
29:55
Speaker 1: a way to take it. And I think your point
29:59
Speaker 1: is just just so salient there from my perspective.
30:02
Speaker 4: Something they got a lot of attention to.
30:03
Speaker 1: The pharmacy world was pharmacy dir fees, right, and and
30:08
Speaker 1: the you know, a lot of the advocacy from the
30:11
Speaker 1: independent pharmacy side was, hey, look, you know they're they're
30:13
Speaker 1: taking our money back after the fact, which which which
30:17
Speaker 1: was true, right, fair enough, But to me, the what
30:20
Speaker 1: was really the driver in that practice. Look, PBMs can
30:23
Speaker 1: underreimburse independent pharmacies at the point of sale, after the
30:27
Speaker 1: point of sale.
30:28
Speaker 4: Really whenever they want. In Part D and they do.
30:32
Speaker 1: You know, CMS had changed that definition of negotiated price
30:35
Speaker 1: to exclude pharmacy price concessions that couldn't be reasonably calculated
30:39
Speaker 1: to the point of sale, and CMS retrospectively came back
30:42
Speaker 1: and said, boy, we never imagined in our wildest dreams
30:45
Speaker 1: when we did that that dr would grow. But it's similar,
30:49
Speaker 1: I think, I think it's really analogous to what you're
30:51
Speaker 1: talking about here with the IRA, because once they opened
30:54
Speaker 1: that door and all of a sudden, pharmacy price concessions
30:57
Speaker 1: that couldn't be determined at the point of sale could
30:59
Speaker 1: be from the patient, could be withheld from the patient.
31:02
Speaker 1: In terms of a benefit, what we saw is incredibly
31:06
Speaker 1: complicated reimbursements to pharmacies that enabled PBMs and prescription drug
31:12
Speaker 1: plans to deny those discounts to patients. At the point
31:15
Speaker 1: of sale, to the tune of I think in twenty
31:17
Speaker 1: twenty one there was about twelve billion dollars in pharmacy
31:20
Speaker 1: dr that was denied to patients at the counter, and
31:24
Speaker 1: so I just think that in my mind, it reinforces
31:29
Speaker 1: your point, which is, if that door gets opened, they're
31:32
Speaker 1: going to find a way gradually to drive those costs
31:36
Speaker 1: up and recoup that elsewhere totally.
31:39
Speaker 5: Because they're losing revenue by this forty MF drugs. When
31:42
Speaker 5: you reduce the retail price the margin strength, they're going
31:46
Speaker 5: to make less money. So it's their impetus. And these
31:49
Speaker 5: are for profits Fortune ten companies. They're not going to
31:52
Speaker 5: walk away from profit right all of a sudden. CBS
31:55
Speaker 5: is not going to say, okay, I'm okay with making
31:57
Speaker 5: less money. They're going to find other ways we'll do
32:01
Speaker 5: with that, right, it's all good. No, they're gonna find
32:04
Speaker 5: different ways to make up the money. And that's why
32:08
Speaker 5: we want to see. We're almost like a pioneer trying
32:11
Speaker 5: to do cms's work and put them on notice to say, look,
32:16
Speaker 5: you got to look at these things more carefully. If
32:18
Speaker 5: CMS does their job and does your job appropriately, and
32:22
Speaker 5: they should, we wouldn't have to do it. But we've
32:26
Speaker 5: spoken to CMS and I've asked them, I said, what
32:29
Speaker 5: happens if the average nonalyzed patient is paying year over
32:34
Speaker 5: year like four sixty three next year's five sixty three sets?
32:37
Speaker 5: Do you have tools to be able to capture that. No,
32:40
Speaker 5: the answer is their answer to me was, well in
32:45
Speaker 5: advance of formulas when before we approve them, we get
32:48
Speaker 5: these averages out of them, out of the PBMs, and
32:51
Speaker 5: we have to approve these formulas because I said, but
32:53
Speaker 5: you have no way of like retro prospectively making sure
32:57
Speaker 5: that this happens right, Because no, we don't just take
33:00
Speaker 5: their work for it, and nobody's going to go back
33:02
Speaker 5: and look at it. They don't have the manpower to
33:05
Speaker 5: be able to do those So we're doing their job,
33:07
Speaker 5: just like you did their job for the dir fees,
33:11
Speaker 5: and you have to like almost like shame them into
33:14
Speaker 5: doing it. And Greg I always say this and ingests,
33:17
Speaker 5: but by the time we're done talking about this issue
33:21
Speaker 5: on the podcast, they've probably figured a hundred other ways too.
33:25
Speaker 4: Ah yeah, oh.
33:27
Speaker 5: Make money off of this margin stuff that we haven't
33:30
Speaker 5: even thought of. Absolutely, yeah, you know, because they have
33:34
Speaker 5: full time people sitting and thinking about it. Unlike us
33:38
Speaker 5: that we're more worried about what is the rational policy
33:42
Speaker 5: or anything else. They're thinking about how to monetize the model. Yeah,
33:46
Speaker 5: monetizing the model.
33:47
Speaker 1: It's funny as you say that, because when you're talking
33:49
Speaker 1: about ways that they look to extract, you know, money
33:53
Speaker 1: from from drug makers, drug manufacturers. Obviously, some of these GPOs,
33:58
Speaker 1: two of them being offshore, offer a whole new game,
34:01
Speaker 1: right in terms of they're capturing service fees, they're capturing
34:05
Speaker 1: admin fees that may not traditionally be considered a rebate.
34:09
Speaker 4: Right.
34:10
Speaker 1: But as we're from a policy perspective, getting more and
34:13
Speaker 1: more focused on rebates, they've evolved and they're finding new
34:17
Speaker 1: ways to capture this revenue.
34:18
Speaker 4: Yeah.
34:19
Speaker 5: Absolutely, I mean, the only thing I would say about
34:21
Speaker 5: rebates is that still the dollar amount is the largest
34:24
Speaker 5: amount of rebates, right, if you have profitability wise, you're
34:28
Speaker 5: absolutely right. They're making more profit off of their specialty pharmacies.
34:33
Speaker 5: They're making more money off of these rebate aggregators and
34:35
Speaker 5: fees rather than they're making off of rebates. But the rebates,
34:39
Speaker 5: that's a dollar amount that's significant. But the part of
34:42
Speaker 5: our rebates is as soon as you do rebate contracting,
34:45
Speaker 5: that's where the fees and everything gets added. Right, you
34:48
Speaker 5: won't need a rebate aggregator offshore if you don't have rebate.
34:52
Speaker 4: Contracting exactly because of that.
34:56
Speaker 5: So the other thing is I'm I want to talk
35:00
Speaker 5: about it, and I hope you want to talk about
35:02
Speaker 5: specialty pharmacy ownership is another distorting the market. First of all,
35:07
Speaker 5: they're putting out independent pharmacies out of business, specialty pharmacies
35:11
Speaker 5: out of business. This it was very clear to the
35:15
Speaker 5: FTC's report that whenever they channel patients to their own pharmacies,
35:20
Speaker 5: these drugs actually cost more to the massive right right,
35:25
Speaker 5: compared to going to independent and then they use that
35:28
Speaker 5: leverage of making more money to put independent pharmacies out
35:31
Speaker 5: of business. So specialty pharmacy is another thing that they
35:35
Speaker 5: need to tackle, which is separate the rebit contracting, but
35:38
Speaker 5: that is being debated in Congress. Right, it's the ownership
35:41
Speaker 5: and state of Arkansas has passed that you cannot be
35:44
Speaker 5: absolutely on the pharmacy. Now there's two litigation and you're
35:48
Speaker 5: a lawyer, you know better than I would where it's
35:50
Speaker 5: going to go. But I think there needs to be
35:53
Speaker 5: a disassociation of PBMs and specialty pharmacies from one another.
35:57
Speaker 1: Yeah, I mean I think, look, they found way to
36:00
Speaker 1: exploit vertical integration in so many different ways, right, Like
36:04
Speaker 1: you know, FTC has done a really good job as
36:06
Speaker 1: well of some other studies, and I think three access
36:09
Speaker 1: as well of just finding these just identifying these massive
36:12
Speaker 1: markups at pharmacies that are owned by PBMs as we
36:16
Speaker 1: as we get our hands you know, through publicly available contracts, FOYA,
36:20
Speaker 1: open records, things like that. Another trend that we're seeing
36:24
Speaker 1: is they're actually diverting, like they're getting volume discounts directly
36:28
Speaker 1: from drug manufacturers directly to the affiliated pharmacies, and they're
36:33
Speaker 1: excluding that from the definition of rebates and their contracts
36:36
Speaker 1: with clients. Right, So it's it all just becomes so
36:41
Speaker 1: so interconnected. And even like you, I don't want to
36:45
Speaker 1: spend too much time on this, right, but even when
36:47
Speaker 1: you look at like the d linking policy, which which
36:50
Speaker 1: there seems to be some real, some real consensus around hey,
36:55
Speaker 1: PBMs should be getting paid bona fide service fees. They
36:57
Speaker 1: shouldn't be able to take advantage and make money off rebates.
37:01
Speaker 1: But even there, right, there are exceptions that allow those
37:04
Speaker 1: rebate dollars to be passed back to their insure prescription
37:09
Speaker 1: drug plan clients. And if you're in Part D, you
37:12
Speaker 1: know some of the largest prescription drug plans, if they're
37:14
Speaker 1: if the PBM is passing that back to the plan, Well,
37:17
Speaker 1: the PBM owns the plan or the plan's payent company
37:20
Speaker 1: owns the PBM. So the vertical integration. I love that
37:22
Speaker 1: you brought it up.
37:24
Speaker 5: So whenever Greg, you hear the PBM executives talk that
37:28
Speaker 5: they take all of this money, whether it's rebates or
37:30
Speaker 5: the fees, and they pass it back on one hundred
37:33
Speaker 5: percent to the plan sponsor or ninety nine percent of
37:36
Speaker 5: the plan sponsor. Well, who is the plan sponsor these days?
37:39
Speaker 5: It's the PBM own insured or the insured that owns
37:42
Speaker 5: the PBM right themselves. Yeah, themselves, So they're passing in
37:46
Speaker 5: from one hand to another and claiming the passing back
37:49
Speaker 5: to the plan sponsor. The real plan sponsors in this
37:51
Speaker 5: country are employers, patients or the government.
37:56
Speaker 4: Yes, the real payers in this market.
37:58
Speaker 5: And this is another thing that it was used to
38:01
Speaker 5: It used to bother me when I was in pharma,
38:03
Speaker 5: where we used to refer to PBMs and ensure as payers.
38:05
Speaker 5: They're not the payers, they're middleman. There's two middleman that
38:09
Speaker 5: all they do is shuffle money, and the two payers
38:11
Speaker 5: in the marketplace are patients, employers, and a certain extent
38:15
Speaker 5: the federal, federal and state governments.
38:17
Speaker 4: Yeah.
38:18
Speaker 1: No, it's a great point, right, And frankly I'm guilty
38:22
Speaker 1: of that as well. Right, I'll get sloppy sometimes and
38:25
Speaker 1: refer to PBMs as the payers, you know, if they're
38:27
Speaker 1: the one, not that there's checks written anymore.
38:29
Speaker 4: But I think.
38:30
Speaker 1: That's it's a great point. The other thing that I
38:34
Speaker 1: think is a I want to circle back to and
38:37
Speaker 1: then would love to move on to some of the
38:38
Speaker 1: work that you've done on premiums.
38:40
Speaker 4: But you know, you mentioned that rebates.
38:43
Speaker 1: Are still like a massive dollar amount and as much
38:45
Speaker 1: attention as pharmacy dr got, which was about twelve billion
38:50
Speaker 1: in dr in twenty twenty one. That same year, according
38:54
Speaker 1: to MedPAC, there's like fifty billion in drug baker rebates
38:58
Speaker 1: that patients are not adding the benefit of, in large
39:02
Speaker 1: part because of you got the safe harbor out there.
39:05
Speaker 1: But cms's definition of negotiated price also doesn't include drug
39:09
Speaker 1: maker rebates. So you know your I think your point
39:12
Speaker 1: about scale is really well taken because just just make
39:17
Speaker 1: believe money is being withheld from patients at the counter and.
39:22
Speaker 5: Stability. You're talking about just medicare, just party yeah, Part D.
39:27
Speaker 5: We're not talking about all these stuff that rebates, then
39:30
Speaker 5: the fees and everything else that's paid to through these models,
39:34
Speaker 5: whether it's the aggregator rebate aggregators and then the specialty
39:38
Speaker 5: pharmacy fees and all these other things that they collect on.
39:42
Speaker 5: When you add them all up, it's significantly more. I
39:44
Speaker 5: mean I always say that Mett Punk and JO Yeah,
39:49
Speaker 5: as well as any other governmental organization that looks at
39:53
Speaker 5: these these numbers, they're underestimating it. But at least ten
39:57
Speaker 5: to twenty percent, Wow, goes back.
40:02
Speaker 4: On billions exactly. That's a lot of money.
40:06
Speaker 5: Yeah, Because you know there's fees. There's traditional fees, there's
40:10
Speaker 5: the aggregator fees, there's a specialty pharmacy fees, and as
40:14
Speaker 5: I said, there's multiple other fees that we don't even
40:16
Speaker 5: know them that they collect on. And that's another thing
40:19
Speaker 5: that you know, Greg, I hate to go back and
40:20
Speaker 5: say Trump one point zero when they were trying to
40:22
Speaker 5: get rid of rebate contracting secret their a'sar wasn't just
40:27
Speaker 5: trying to get rid of rebate contracting. He was also
40:29
Speaker 5: trying to get rid of fees or at least make
40:32
Speaker 5: the fees either flat. Yeah, he was, and he was
40:35
Speaker 5: mandating that you have to justify these fees. They can't
40:38
Speaker 5: be just fees and call the fee just because you
40:41
Speaker 5: shuffle the paper. So that's another component that is being
40:46
Speaker 5: lost by not going back to the originals of what
40:49
Speaker 5: we were talking about in twenty sixteen seventeen eighteen.
40:52
Speaker 1: There is some good policy in that first term, and
40:55
Speaker 1: would it be fair to say you think that's worth revisiting.
40:58
Speaker 5: So I think that it's a shame that the President
41:02
Speaker 5: is not pushing for that same policy could be debta
41:06
Speaker 5: and discussed in Congress, and instead is basically trying to
41:09
Speaker 5: shape chase other ways of fixing the model.
41:15
Speaker 4: Okay, I know we don't have a ton of time left.
41:18
Speaker 1: A lot of the work I do is supporting you know,
41:20
Speaker 1: maybe state associations, pharmacy groups, patient groups on PBM reform
41:25
Speaker 1: and policy in the States. And you knows, as guaranteed
41:29
Speaker 1: right whatever policy that patient groups or pharmacy groups may
41:34
Speaker 1: be advancing. PBMs come and they say, oh, my god,
41:36
Speaker 1: the sky is falling and premiums will rise like we've
41:39
Speaker 1: never seen it, and it's a tough thing to overcome, right,
41:43
Speaker 1: because legislators don't want to put their finger on something
41:46
Speaker 1: and premiums go up. I think you and the Global
41:49
Speaker 1: Healthy Living Foundation have done some of the best work
41:52
Speaker 1: in the country, frankly, on the premium issue, and it's
41:55
Speaker 1: something I always point to. It's the first thing I
41:57
Speaker 1: point to when states say, what do we say about
41:59
Speaker 1: these pre right, because you guys dug into the data.
42:03
Speaker 4: Can you just talk a.
42:04
Speaker 1: Little bit for our listeners just about the work you've
42:07
Speaker 1: done on premiums. I think the bulk of it has
42:09
Speaker 1: been through the lens of Copey accumulator policy, But what
42:13
Speaker 1: would love just for you to share.
42:14
Speaker 5: That You're absolutely right, Greg, So every time any kind
42:17
Speaker 5: of policy shift happens, whether it's in the state of
42:20
Speaker 5: a federal level, the first argument that you hear from
42:22
Speaker 5: PBMs and ensures that the premiums are going to go
42:24
Speaker 5: out of control.
42:25
Speaker 4: Oh my god, Yeah, it's crazy.
42:28
Speaker 5: It's like, oh my god, you're going to have And
42:30
Speaker 5: that's the worst thing that a politician can do. Because
42:32
Speaker 5: premiums are very visible to the patient, right, they paid
42:36
Speaker 5: every month. It's very visible. Whether it get this from
42:39
Speaker 5: a paycheck or they paid directly, it's very visible. So
42:43
Speaker 5: we wanted to look at because one of the things
42:45
Speaker 5: that states were starting to take up is this whole
42:48
Speaker 5: issue of banning accumulators and maximizers in the states, and
42:52
Speaker 5: all they were doing is basically saying, look, if you're
42:54
Speaker 5: using a copay assistant program or some type of assistance
42:57
Speaker 5: program from a pharma company, that that assistance should count
43:01
Speaker 5: towards your deduct or or your maximum out of podpet costs.
43:04
Speaker 5: Doesn't matter who paid for it had assistance, right, whether
43:08
Speaker 5: it's the pharma company or Uncle Greg or Uncle Charlie,
43:11
Speaker 5: whoever paid for it is fine. So obviously one of
43:14
Speaker 5: the biggest arguments that the insurance we're making is that
43:18
Speaker 5: the premiums are going to go with skyrocketing. So the
43:20
Speaker 5: Global Healthy Living Foundation we decided to do this. Some
43:23
Speaker 5: states had already passed this law and legislation, and back
43:28
Speaker 5: then when we looked at it specifically, it was a
43:30
Speaker 5: dozen or maybe fifteen sixteen states had passed something to
43:34
Speaker 5: that number, so it was a good sampling, and it
43:36
Speaker 5: was large states, and it was blue states, red states.
43:38
Speaker 5: It was a good mix, you know, of state and
43:41
Speaker 5: we looked at premiums. We frankly looked at the premiums
43:45
Speaker 5: of the ACA plans in the states, and because that
43:48
Speaker 5: gets impacted right by state law. And that's another reason,
43:51
Speaker 5: because state law really impacts the state plans control plans,
43:56
Speaker 5: which ACA plans are state control. So we're like, okay,
44:01
Speaker 5: if a state passed it, let's look at premiums before
44:04
Speaker 5: passage of the law, after the passage of the law
44:06
Speaker 5: and compare the states that have passed it versus states
44:09
Speaker 5: that have not passed it. And guess what, Greg, There's
44:12
Speaker 5: no correlation to premium increases. Premiums went up, they went down,
44:16
Speaker 5: had nothing to do with the passage of law. In fact,
44:18
Speaker 5: if you look at states that have passed the legislation
44:21
Speaker 5: and states that have not passed the legislation, it's you
44:24
Speaker 5: can draw a line and they're identical. Yeah, premiums going
44:29
Speaker 5: up and down are similar. There's no difference. And the
44:33
Speaker 5: reason is because look, this was a bill. These bills
44:38
Speaker 5: are really to protect patients, right and has nothing to
44:42
Speaker 5: do with premiums. But because every time the argument comes
44:46
Speaker 5: in from the prebum and insurance come that the premiums
44:49
Speaker 5: are going to Well, that's why we looked at it,
44:51
Speaker 5: and we saw no difference.
44:52
Speaker 1: It was such a such an important project, and again
44:56
Speaker 1: it's something that I point to anytime somebody has questions
45:00
Speaker 1: or need help, needs help when they're advancing policies on
45:03
Speaker 1: the premium front. And from my perspective, I'm comfortable saying
45:07
Speaker 1: this right. Insurance file documents signed off on by actuaries
45:11
Speaker 1: tell a very different story than PBM and insure lobbyists
45:14
Speaker 1: tell in state.
45:16
Speaker 4: Capitals and on the hill. I don't know if you've
45:20
Speaker 4: seen this or not.
45:21
Speaker 1: You probably have, but West Virginia passed a rebate share
45:25
Speaker 1: the savings law a couple of years ago, and the
45:28
Speaker 1: Commissioner of Insurance said, hey, insurance companies, I want I
45:30
Speaker 1: want to know what the impact of premiums was and
45:34
Speaker 1: for for the last two plan years. The insurers you know,
45:38
Speaker 1: submitted things to the CHRISTI of Insurance and lo and
45:40
Speaker 1: behold that share the savings actually had had a downward
45:45
Speaker 1: impact on premium growth, not upward, which is also right,
45:48
Speaker 1: the complete opposite of what PBMs and insurers say, and
45:52
Speaker 1: really what the CBO said in connection with Trump's rebate
45:55
Speaker 1: rule at the.
45:56
Speaker 5: Time, CBO, I mean, CBO says, or if you think
46:00
Speaker 5: about it, if you go on the a hip website
46:04
Speaker 5: right now, they have a dollar bill and it shows
46:07
Speaker 5: what percentage of drug cost goes towards premiums. Right, it's
46:11
Speaker 5: twenty two point three percent. I think that's what they have,
46:14
Speaker 5: the most latest one that they put out there. The
46:17
Speaker 5: reality is we don't have to go with what a
46:19
Speaker 5: hip says, what PCMA says, or any PBM says, or
46:23
Speaker 5: insurer says. The reason being is that state of California
46:26
Speaker 5: and twenty seventeen passed the law that required the PBMs
46:30
Speaker 5: and insurers to report what is the impact of drugs hospitals,
46:35
Speaker 5: position services on the premiums? And guess what it's been
46:41
Speaker 5: in the twelve I think the highest that's been in
46:43
Speaker 5: the thirteen percentile. And because when they also have to
46:47
Speaker 5: report what is the impact on the rebates just rebates
46:51
Speaker 5: on the dollar amount, and then you subtract that from
46:53
Speaker 5: the twelve percentage, right, because it impacts the percentage on
46:56
Speaker 5: the premium it's in the thirteen percentile, So they're over
46:59
Speaker 5: it the meting by ten percent. What the impact on
47:03
Speaker 5: premium is so again, we don't need to rely on
47:07
Speaker 5: nice pictures from ap Right, there's data out there, whether
47:11
Speaker 5: it's res Virginia, whether it's the study that we did
47:13
Speaker 5: a Global Healthy Living Foundation, whether it's California, to go
47:17
Speaker 5: back and look at this data and make you judgment
47:19
Speaker 5: for ourselves. And it's a shame that more people are
47:22
Speaker 5: not doing that.
47:22
Speaker 1: Yeah, and you and you did it right, Like you
47:25
Speaker 1: guys went out there and you did it, and it
47:27
Speaker 1: just told such a different story, such important work in
47:31
Speaker 1: my opinion, and again it's it's one of the first
47:34
Speaker 1: things I point to as states or you know, whether
47:37
Speaker 1: it be nonprofits or associations are struggling with sort of
47:40
Speaker 1: the just the proclamations of the inevitable premium rise if
47:45
Speaker 1: you even if you try to do anything right, I mean,
47:47
Speaker 1: they say, premiums rise, if there's transparency reporting, if you
47:51
Speaker 1: rein in steering markups, I mean, name it right, and
47:54
Speaker 1: they're they're, oh my god, premiums.
47:57
Speaker 4: So years ago.
48:01
Speaker 5: This is probably twenty sixteen, twenty fifteen, even maybe older
48:06
Speaker 5: than that. I remember, you know, when you have an
48:10
Speaker 5: insurer in the state, this Department of Insurance and most
48:14
Speaker 5: states has to sort of like approve the rate increases,
48:17
Speaker 5: the premium increases. So I remember this document that somebody
48:22
Speaker 5: sent to me from the California Department of Insurance and
48:25
Speaker 5: they wrote back to one of the insurers in the
48:29
Speaker 5: state of California. They won a huge rate increase and
48:31
Speaker 5: they blamed Sabaldi for it back then, the HEPSA drug.
48:36
Speaker 5: And I remember Department Insurance riding back and say, for
48:39
Speaker 5: the last four years you've been blaming Sabalti for premium
48:42
Speaker 5: increases and that Subaldi you're not paying as much for
48:45
Speaker 5: two reasons. Number one, there's competition in the market. Remember
48:48
Speaker 5: the price is dropped by half. Everybody knew that. And
48:51
Speaker 5: the second part is hepsi is a cure. It was
48:54
Speaker 5: a cure, right, you don't have more hepsy patients and
48:56
Speaker 5: they get cured, you're not treating them. This is not
48:58
Speaker 5: a potic disease that more people are getting hesi.
49:02
Speaker 4: So they called them out.
49:03
Speaker 5: And if my insurance, more departments of insurance that regulate
49:09
Speaker 5: these companies have the wherewatal to really challenge them, you
49:12
Speaker 5: will see that emperor has no clothes a lot of times.
49:16
Speaker 5: And you're absolutely right about the premium increases. Everything has
49:19
Speaker 5: to do with the every time you touch something with them,
49:24
Speaker 5: they claim premium increases, and it's the you know, it's
49:27
Speaker 5: unfortunate because again I don't think the emperor has any clothes.
49:31
Speaker 1: Yes in this case, Wow, Well we covered a lot
49:35
Speaker 1: of ground and not not easy stuff, and I think
49:37
Speaker 1: I think it gives listeners a flavor of just the
49:40
Speaker 1: I mean, you're you're working. You know, the work you're
49:43
Speaker 1: doing is central to really all of the hot issues
49:46
Speaker 1: in pharmacy. And so man, I can't thank you enough
49:49
Speaker 1: for coming on and sharing some of the work you're doing.
49:52
Speaker 1: How can folks follow the work you're doing and where
49:55
Speaker 1: what's the what's the best way for them to follow
49:57
Speaker 1: the work you're doing and help really magnify the work
50:00
Speaker 1: you're doing.
50:01
Speaker 5: So you read my work mostly it's on LinkedIn, and
50:04
Speaker 5: usually put it on LinkedIn.
50:05
Speaker 4: So that's me.
50:07
Speaker 5: My handle is Robert Papovians. There aren't too many Rubber
50:10
Speaker 5: Papovions out there, you know, on LinkedIn. The second part
50:14
Speaker 5: is follow pioneers to go on the pioneers to the website.
50:18
Speaker 5: Not only we have the IRA tool, we have a
50:19
Speaker 5: three forty B tool. That's another one we didn't even
50:21
Speaker 5: talk about it. We get to three has become a
50:25
Speaker 5: PBM business model, right, all these pharmacies is not the
50:29
Speaker 5: independent pharmacies that are making money off of three forty B.
50:32
Speaker 5: I can tell you that much. It's the PBM owned pharmacies.
50:35
Speaker 5: But we have a go to the Pioneer website and
50:38
Speaker 5: you can follow some all the work that we do
50:40
Speaker 5: over there and look at the tools. All of the
50:43
Speaker 5: data that we get either we acquire it from third
50:45
Speaker 5: parties or the real data, or we get it from
50:49
Speaker 5: government agencies like HERSA for example three forty B. We
50:54
Speaker 5: also put out a lot of stuff from Global Healthy
50:55
Speaker 5: Living Foundation. You can visit their website. We do a
50:58
Speaker 5: ton of vaccine stuff there. I do a lot of
51:02
Speaker 5: vaccine stuff on They have a Global Healthy Living Foundation,
51:05
Speaker 5: so you can follow me there. But I would say
51:08
Speaker 5: just hit me up on LinkedIn. I'm happy to chat
51:12
Speaker 5: and be challenged, and I am always my ears are
51:16
Speaker 5: always open because you know I don't we don't have
51:20
Speaker 5: all the answers. I don't have all the answers, but
51:22
Speaker 5: I'm willing to have a very I'm going.
51:24
Speaker 4: To go on record and say you have most of them.
51:26
Speaker 4: The doctor propos, thank you.
51:28
Speaker 5: I think greg But I'm willing to have a very
51:31
Speaker 5: honest discussion based on data, not based on hyperbole or
51:37
Speaker 5: somebody claiming something or saying things like, oh well, if
51:40
Speaker 5: we don't get the three forty B discounts, everybody's going
51:43
Speaker 5: to go out of business.
51:44
Speaker 4: It's not the case.
51:46
Speaker 1: And I know we didn't talk about three forty B
51:47
Speaker 1: if you have one more minute, and I don't want
51:50
Speaker 1: to oversummarize, but on the remad issue as well as
51:53
Speaker 1: a three forty B issue, I think a lot of
51:55
Speaker 1: your work centers on getting the discounts to the counter.
51:59
Speaker 1: You know where it benefits patients. Is that the same issue.
52:03
Speaker 5: It's a margin play, except this time around it's the
52:06
Speaker 5: hospitals that I'm doing the margins. And one of the
52:09
Speaker 5: biggest things that we look at that the tool with
52:11
Speaker 5: the Pioneer is the charity care data. And you see
52:14
Speaker 5: over and over again that hospitals are doing less charity
52:16
Speaker 5: care collecting more money through three forty B, which makes
52:19
Speaker 5: no sense. And you know the other thing that we're
52:24
Speaker 5: looking at is contract pharmacies. And everybody's like, oh, well,
52:27
Speaker 5: you know the independent pharmacies, that's who runs the three
52:30
Speaker 5: forty B programs. That's absolutely not true. If you look
52:33
Speaker 5: at the top fifteen contract pharmacies with the most contracts
52:35
Speaker 5: in the country, for sure, the top three or Walmart
52:38
Speaker 5: after that, the next twelve or PBMO pharmacies. Independents do
52:42
Speaker 5: play a role, but it's minuscule. And guess what, also,
52:46
Speaker 5: the independence don't get the contracting terms that the PBMs get.
52:50
Speaker 4: Correct.
52:51
Speaker 5: If you look at the Minnesota report which instead of Minnesota,
52:55
Speaker 5: the PBMs dominate that market. With regards to contract pharmacies,
53:00
Speaker 5: the margin for a contract pharmacy was sixteen percent. You know. So,
53:05
Speaker 5: and I can guarantee you that I've seen contracts of
53:08
Speaker 5: independent pharmacies doing three forty b work. They're nowhere close
53:11
Speaker 5: to sixteen percent.
53:12
Speaker 1: Yeah, I've never seen one. I've never seen an independent
53:15
Speaker 1: getting sixteen percent. I can say that. Yeah.
53:18
Speaker 5: So, I mean the contract terms are not uniform because
53:22
Speaker 5: they're done between the hospital and the contract pharmacy. It's
53:25
Speaker 5: not done between their Government's not paying for that. The
53:28
Speaker 5: hospital is basically funneling the money based on the margins
53:31
Speaker 5: to the contract pharmacy.
53:34
Speaker 4: Very good.
53:35
Speaker 1: Well again, you know, I would encourage everybody to follow
53:39
Speaker 1: you on LinkedIn as well as Pioneer Institute and Global
53:43
Speaker 1: Healthy Living, and you got you just continue to do
53:45
Speaker 1: some of the most forward looking, sophisticated work, and we're grateful.
53:49
Speaker 5: I'd remiss to say that Concress Advisors, which I found,
53:53
Speaker 5: has its own website Concurse Advisors dot com. There's two
53:57
Speaker 5: Concress Advisors, So I'm not the brokerage firm that works
54:01
Speaker 5: on real estate. I'm the one that works on healthcare.
54:04
Speaker 4: Go on that website.
54:05
Speaker 5: I keep it updated so everything that I do is published,
54:08
Speaker 5: it's there, transparent whereverybody to take a look at it.
54:12
Speaker 1: There's going to be a surge of real estate purchases
54:14
Speaker 1: from pharmacists at this other Conquest Advisors.
54:18
Speaker 4: That is true. That is true, it's not. Thank you
54:21
Speaker 4: for coming on this. This has been this has been great.
54:24
Speaker 4: Thank you, Thank you, thank you.