How Employer-Pharmaceutical Collaboration Can Transform Healthcare Plans

In Episode 7 of the Only Healthcare Podcast, co-hosts Michael Navin and Dr. Randy Vogenberg, PhD, are joined by Zak Kornblum, a pharmacy consultant with expertise in navigating the complexities of employer-PBM relationships. Together, they discuss the critical need for employer-pharmaceutical collaboration to drive transparency, improve data access, and enhance patient outcomes.

Key discussion points include:

• The challenges employers face when relying solely on PBMs for data and transparency.
• How direct collaboration with pharmaceutical manufacturers can offer better insight into drug pricing and improve access to advanced therapies.
• The importance of educating employers on understanding their health plans and making informed decisions.
• Real-world examples of how improved communication and transparency can result in better patient care, especially in chronic conditions like cancer, MS, and diabetes.

Tune in to learn why employers should take a more active role in healthcare decisions and how strategic partnerships can transform the future of healthcare.

🎧 Listen now: onlyhealthcarepodcast.com

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Institute for Integrated Health (IIH): Health care benefits, insurance coverage regulations, and doing business in the healthcare industry can be complicated. At IIH, Dr. Randy Vogenberg and his team understand these unique challenges and provides strategic guidance customized to every client. To help overcome your unique challenges, IIH delivers education, planning and advisory on market trends, and U.S. health care market intelligence. The firm’s decades of proven success are due to strategic collaboration with associates from the business, clinical, and scientific communities. https://iih-online.com/.

Transcript

 You are listening to The Only Healthcare Podcast, created to inform you on the why's, how's, and what's of healthcare. Hosted by industry leaders Michael Maven and Dr. Randy Bogenberg. Discussing why costs and risks are so high and who should be held accountable. How will technological advancements merge with the quality of care?

And when does the public gain access to advanced healthcare? medical treatments. Listen in as Michael and Randy seek to answer industry concerns for the public and all stakeholders involved. 

Welcome back to the Only Healthcare podcast. Our episode today features a guest speaker who will contribute to the conversations around commercial market needs and the benefits of employer-manufacturer collaboration.  Specifically, we want to explore and begin looking at opportunities for solutions around data, equitable access, and whole-person care.

Welcome back to the Only Healthcare podcast. Commercial market needs  A reminder to everyone that you can always connect with us at www.onlyhealthcarepodcast.com and subscribe to stay informed and be part of the conversation on how we can drive positive change in the healthcare system. Now I'd like to introduce my cohost, Michael Navin, who will introduce our guest contributor and lead our conversation today, Michael.

Thanks, Randy. And thanks everyone for joining and signing in again. We're excited today because this is the first podcast we've put out there that includes a guest and we have a great guest today. Zak Vornbloom, who comes to us from Marsh McLennan. I got the privilege of meeting Zach, uh, about a year and a half ago.

At a pharmaceutical conference where really what was great is Zach comes from the employer pharmacy side. And he kind of opened his eyes a little bit to what the manufacturers are dealing with. And so, so what we wanted to do is, uh, take some time with Zach, introduce him and explore some opportunities that are out there on the employer side and what they're looking for, for pharmacy specifically.

So Zach, welcome. And if you don't mind introducing yourself, that would be great.  Thanks Mike, for having me. And thanks Randy. Thanks Randy. I'm Zachary Kornblum. I'm a pharmacist by training. I started my career at Walgreens working in a lot of rural North Carolina pharmacies, both big and small, busy and slow.

About four and a half years ago, I moved to Marsh, uh, doing a lot of clinical work, right? Helping our actuaries underwrite PBM contracts as, as it pertains to clinical programs and formularies and things like that. I also do a lot of strategy on behalf of our clients. So going out to the market, Figuring out what the carriers and PBMs are offering, figuring out what the point solutions are offering, um, you know, bringing those back in, trying to figure out, you know, what makes sense for which client, again, how do we underwrite it?

And I also get to do a little, a little bit of strategy for our, our pharmacy group. So I sit within a group called RX Solutions, uh, which is the pharmacy consultant within the Marsh brokerage business.  Excellent. Zach, in that vein, what are some of the main things that are being, uh, that you're providing to your team specifically to the brokers within, within Marsh? 

Yeah. So our core business is To go to the market, say, do an RFP or a market check on, on those employers, uh, PBM, bring the results back in, underwrite those, and then help them really make a decision with that employer as it relates to, well, what programs do I want? And sort of what is the expectation, both financially, And in terms of, of sort of patient access, if I were to choose, you know, this PBM versus that, or maybe this formulary within a PBM versus, versus a different formulary.

And how much information do you use from the manufacturers when you do that? Are you getting at specifically through your own, through your own assets?  Yeah, so we, we actually don't get information from manufacturers. We, we will license data, um, like MediSpan or IPD analytics, something along those lines.

And then we will use that, uh, in our underwriting, but we are not,  we are not specifically working with pharmaceutical companies as it relates to underwriting PBM contracts. We're starting to meet them more and more sort of in a general sense, but. Okay. It's not really, it's not really flowing directly into say, um, you know, work I'm bidding on, or we're working with, you know, client X and, and we want to talk to the manufacturers about their products as it relates to that client.

That's not happening at our level yet. So you're primarily relying on the PBM offering that they're bringing to your employer customer,  reviewing that, putting not just a, an economic view of that, but a clinical view of that, and then providing some guidance and steps for them.  Yes, we are. We are using the information provided by the PBM, and I think, you know,  data is a huge challenge in this space, right?

You know, a lot of PBMs consider the data theirs and proprietary, right? Some don't, so the amount of information you really get can vary, right? You, you may have to  analyze a case without knowing the actual cost to the plan for products, just knowing what the mix is. And then in some cases, you may get it.

You know, the mix plus the cost. Plus you can have some robust rebate reporting, right? Maybe not super granular, but at least to the level where you can really understand what the rebates have been over say the past 12 to 18 months. So the amount of data shared really does vary quite significantly.  So would you say that practice that you're doing now has been standard over the last, you know, five to 10 years, or is that fair?

Is it advancing in the, in the most recent years?  So I think it really depends on the sophistication of the consultant and maybe a little bit of the consultant business model as well. A lot of the legacy consultants run what are called coalitions. Uh, that's probably an entire episode that you could do diving into what, what a coalition is.

They tend to focus on carve outs with the major three PBMs. They tend to focus on rebates as sort of the driver of You know, quote unquote savings for an employer. We don't run a coalition at Marsh. We try to be just an advisor. That's that's sort of looking broadly across the market. And then, you know, we've been doing this for quite a while.

We've got,  I think, 7 or 8 actuaries now completely dedicated to pharmacy within an actual department. That's probably 50, 50 plus individuals. You know, we've hired a ton of folks. From the PBM industry, right? In an attempt to really understand sort of how the sausage is made that allows us to go deeper than just, you know, hey, they're offering a 3000 rebate in in this channel, right?

Because while that's nice, it really depends on the sort of fine print in the language, right? A lot of the legacy PBM business model is putting a number out.  And then using the language in the contract to slim down the number of products that actually qualify. And they're, they're obviously still earning that rebate or pulling that rebate from pharma, but the game is to create some spread and what you actually have to pass back.

Right? So the sophistication of the consultant, who they've hired, lays into their ability to actually dig into those details and really figure out what's You know, what does this contract, what does this contract really mean?  How deep do you get into UM utilization management practices, right? Do you, do you quantify the, the, the use of UM in that,  uh, analytics or the analysis, or is it something again, relying on what the PBM believes is the best way to manage products. 

So we do quantify.  But I will say that it's very challenging to really hammer out,  like, a number  and to, and to make it sort of to have a nice logic behind it. Right? It gets very, very murky when you start talking about what's your approval rate. Well, if your approval rate is 75%. On this product, what are the other products that person might take it?

It gets it gets very challenging, um,  to have a really robust number for that. And so really what we do is we assign what we think are relatively conservative, but sort of fixed. Values to tiers of PBMs, right? So if we think you're more or less just rubber stamping, you're not going to get a strong number.

If we think you're actually doing a true clinical PA, you'll get a better number.  And when you say that, is it, is it sort of like a PA is really just a delay of the inevitable? Or is it a, you know, is it truly a real, a tactic that allows you to save, save money?  Well, I think, I think the idea is finding the right patient.

At the right dose, right? That's sort of the old pharmacy adage. You know, there are  some providers that like to sort of experiment a little bit. There are providers who maybe have a product that that they're just very comfortable with. If that happens to not be on the formulary. Is not rebate eligible for that contract.

You want the PA process to push to the formulary, right? If you're buying a formulary because of a rebate expectation, you don't want a bunch of non-formulary products in there necessarily. So, so it is, I think, de delaying the inevitable and that your goal is not to just deny care,  but given the arrangement you've chosen, you do want the PBMs, um, process to more or less curate the formulary that you actually bought. 

Makes sense. Randy, any, any other questions on that?  Yeah. So as we all know, there's a lot of change beginning to happen, particularly at the state level around some of these issues that you brought up, Zach. Uh, so my, my question is, in the work that you're doing, how are you. Adjusting or allowing for some of the changes due to state law or regulation, for example, in Arkansas is a good one, uh, where you're very limited as to what you can or can't do around you.

Um, and it's beginning to cause change in the benefit coverage strategies for employers.  So, we've got a compliance and legal department that that works on sort of the qualitative portion of that.  In terms of the quantitative again, we do rely a lot on the PBMs. Right? So, so, for instance, if they're unable to steer  specialty products to a specialty pharmacy, maybe that changes what they're willing to offer financially.

And so we will take that into account. 1 of the things with a lot of that legislation, right? Is.  If you're in a RISA plan, a RISA is a federal law and preempt. So a lot of that just does not apply. And I know a lot of states are  working, I think, in their second wave of legislation to figure out, is there a way to make that different?

Right? But a lot of the, a lot of the legislation does not apply.  To an Arisa plan, which most of our clients are.  Okay. Yeah, and I think that's an important distinction between the self funded Arisa plans and the fully funded traditional commercial insurance that most of us think about.  The other question has to do with. 

Uh, what, what the opportunities are because you mentioned some of these coalitions, I presume around purchasing, not just for rebates, uh, but what's the, the collaborations that are out there that, that you would like to see happen, uh, with manufacturers in this employer space for pharmacy.  So, so Mike, Mike knows this from, from some of our prior meetings, right?

We are  starting to talk to manufacturers about what that might look like. I think. What's interesting, right, is, is employers, they don't really even know what question to be asking along those lines, right? They don't, nobody's really thinking, well, what if I went to all these manufacturers and negotiated directly, right?

They're, they're defaulting to, well, let's figure out how to optimize the PBM relationship. And of course it, it, it depends on, you know, what PBM you're with, right? The large PBMs likely  would not allow small clients.  To, to get outside of their predefined contracts, the larger clients, I think they probably would.

But still, you look at some of these.  Employers, um,  on the small side, you might have 1 HR person to like, 2 or 300 employees, maybe 3 or 4 to, you know, 5 or 600 employees. They're not going to have the bandwidth.  To  manage  reaching out to pharma companies are really even thinking through. Okay. How do I figure out what I want to ask for?

If I were to go  directly to a manufacturer where some of the larger employers might might might have some of that, right? They may have a medical director, but they probably don't have  somebody who worked in market access in their past. So I would love to see more of that collaboration. So in that, but in what you, sorry to interrupt you, but in what you just described Zach, wouldn't, wouldn't that possibly be like a TPA who's managing, you know, maybe they have 50 to 100 employers that adds up to, you know,  a few thousand, 10, 000 lives or so that they could be more of the advocate between, you know, The manufacturer and the employer. 

Yes. I think that's, I think that's absolutely. And I think that's sort of where I was going, right? Is that you think about our pharmacy consulting group, we've got,  you know, one and a half million lives that sort of are under the umbrella, right? There's no official coalition, but they're under our umbrella, right?

We can make those connections sort of quickly and easily. Yeah. Coalitions can probably do the same again to the coalition business model. There's a whole deep dive on that as to why it. Maybe it would be easier to do it with someone like us versus them.  But that's exactly sort of the, the idea that we've had Mike, right?

Is, you know, we've got this big collection of employers and and growing quickly.  We can sort of be that conduit, right? We can be the one to  come up with, say, the global agreement that can then be sort of distributed amongst, amongst the employers, uh, who are, are truly interested.  And, and, um, given that, are, is there anything specific or one, one or two key things that you're being asked to provide back to the employer customers that you currently work with? 

So I think a lot of the. Employers are starting to talk more about transparency.  So, obviously, we're a sister company to Mercer. Mercer does a big survey of employers. I think the results there was a majority would like more transparency, but are unwilling to pay for it. Anyway, so that that sort of come again brings back to, like, the data, the data pieces.

The employers are starting to want to know sort of what they're getting for the, for the money that they're spending. Uh, and so I think 1 of the interesting things about working directly with the manufacturer is. You can have at least more insight into. What you're spending on certain drugs versus just the aggregate.

Right. It helps you really uncover the real value, right. And pharmaceutical products, right. We all know that they're the tools to keep people out of the hospital, right. Keep people healthy, but it's very hard to actually calculate the real value of the pharmaceutical product as an employer, because you just get this aggregate number.

You know what you've spent in claims and you have this, you know, one rebate number. You can't untangle that. Right. So I think working with pharma is a huge opportunity. For the pharmaceutical companies to really prove out the value of their products. You know, nevertheless, the, the buyers of those products actually understanding what they're getting.

So let me, uh, ask a different kind of question because we were talking a lot about the money side. Let's get over to the clinical side. What kinds of data around outcomes are you able to grab? And where do you think? Uh, improvements around the clinical focus and clinical performance of plans comes into play in these potential collaborations with manufacturers. 

So, we have a group within,  uh, Marsha McClellan that does,  it's sort of our clinical consultative group, right? So, there's nurses, there's a medical director, um, and, and we are collecting You know, claims from the TPA or the, or the carrier collecting some of those pharmacy benefit, uh, claims and really pulling on other things too, like, like workers compensation with the goal of sort of watching people over time, you know, looking at big disease categories, like MS and oncology, diabetes, and trying to figure out how's, how's this plan going in terms of the health of  Of the patient,  it's it's still challenging to really nail down.

Okay, each of these individuals, you know, they started taking this drug and now we see a change. So, was it that drug? And was it something else? The statistics are are not always straightforward.  Um,  but again, I think.  Being able to sort of calculate that value requires sort of both of those pieces we talked about.

Right? So.  So we can we can work on  watching that patient over time.  We can also work on getting closer to the real  price of the product, but without both of them, you can't  actually calculate the value  that maybe leads into, like, value based contracts, which, again, is something we've talked with with pharmaceutical companies about.

That is, to me, super interesting. That sort of makes sense, right? Clinically, you're, you're buying an outcome, right? When you buy a drug. So why not have some sort of contract tied to that outcome? I think that the details are super important, right? It's, you know, what data are we collecting to measure? That outcome,  what's the actual formula we're using to measure it.

And then, you know, from there it's, it's really about executing. So, yeah, that is a, that's a very interesting  space that, that we are talking to, to folks about and would love to keep doing so, and to add to that. I, I'm not sure how much you're aware, but. In my 27 plus years working with manufacturers, they, there's a ton of that information that that's out there.

And the, the manufacturers who invest in that are very, you know, Very specifically investing and they're really investing to provide it to the the PBMs and the plans. Um, I don't know if they've, you know, again, I think there's a huge, sounds like a gap, like a huge opportunity to take existing data and very valid published, you know, in, in top journals types of data.

And, and really bring that to, to the direct, uh, I mean, you know, employer who's paying for these claims because there's, there's real data, there's real information in that. And, um, and I know the companies invest pretty heavily in that. So maybe there's just a gap that you're not, maybe you're not getting what you need to, you're not, maybe not getting what you need from the PBM necessarily.

Um, but there's certainly information out there.  Yeah, Mike, I think you're, you're definitely right. I think that the  PBMs have done a good job of capturing the employer's attention and probably the consultants as well.  And it's just, it's just something that's just never happened. Right? Like, there, there certainly is a gap.

It's not like it's hard to bridge the gap, right? It's conversations. It's sharing some information. It's just that those parties have just not come together  again, because it focused so heavily on  optimizing the arrangement with the PBM that just, whether they haven't thought about it or just haven't had time.

Right. It just hasn't happened.  Yeah. That's certainly been my, my experience over the years, similar to Michael's there's a lot of data, but not a lot of sharing or. Or good conversations that can help change what really needs to be happening from the employer perspective is as well as improving the patient experience, which is something that everybody's looking at these days.

Uh, some call it whole person care, others  call it other things,  but I think that's increasing, uh. As an area of interest by employers as they're getting more frustrated because of the lack of transparency, even though they don't want to pay for it, as you pointed out, uh, nonetheless, they're trying to get their arms around this because it's becoming unaffordable.

In some cases, particularly when you look at the, the newer generation novel therapeutics, uh, that are under the pharmacy benefit, but there's a lot more under the medical benefit to  yes, that's, that's very right. And Randy, I think that, okay.  I think that employers  really just appreciate understanding what's happening.

Right? And so, so we're talking about, you know, having some of that. You know, real world data, you know, a lot of the questions that I get is, Hey, just tell me about this drug. What, like, what is going on? Why is this person on this drug? You know, is it the best for, for, for the condition they have? Right? So I don't, I don't think employers are out there.

Like, we need to squeeze, you know, every last penny out. We want to say no. Like, they really, I think at this point want to understand. What their members are taking and why. Right? And so that's part of that gap. It's, it's not necessarily that you have to have this super complex. Formula for calculating value.

You just have to be able to tell the employer. This is why this person is on this product. They're on it because it has proven medical benefit. Again, that's something when you've got a couple of HR folks and the CEO, like they're not, they're not pharmacists, they're not physicians. They're, they're not inherently going to understand this.

You have to communicate it. And so I think a lot of, a lot of this transparency talk would be resolved simply by. Better communication of why people are on certain high cost products.  That's really well said and, uh, very clear. And I think that's what gets missed, right? And all the noise of transparency and compliance laws.

It's really about just being open, uh, and not assuming a consumer ad. Is what drove, you know, the patient to get the medicine they have. And, um,  and we all know that that's not, that's not always the case, but, but this has been great, Randy, did you have any other follow up questions, um, before we let Zach go? 

No, I think this has been a great conversation and a timely in terms of your experience, Zach, and what you're seeing, uh, in the employer space and some of the outreach, uh, Is underway with manufacturers is also very interesting. So thanks for sharing.  Yeah, absolutely. I appreciate you guys having me on today.

Yeah. And hopefully I'll be back on again and, uh, we can maybe get you on that coalition conversation. Yeah, absolutely. We could definitely have that one. Looking, we'll be looking forward to that. Awesome. Well, thanks Zach for your time and, and your efforts and all the work you're doing. It sounds like you and Marsh are doing some amazing work for your customers.

And, uh, we look forward to. I having another discussion about it. 

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