[S2E11] Joey Dizenhouse: Follow the Money: Inside the Pharmacy Supply Chain

How PBMs, Rebates, and Drug Pricing Are Draining Your Benefits Budget

Pharmacy costs have ballooned from 12% of the healthcare dollar in 2000 to 30–50% today—and most employers have no idea why or what to do about it. Joey Dizenhouse, CEO of SlateRx and a 25-year actuary and benefits veteran, pulls back the curtain on the systems, incentives, and hidden money flows that make pharmacy one of the most complex—and costly—benefits to manage.

In this episode, Joey and Vincent dig into the five levers every plan sponsor needs to understand: unit cost, utilization, mix, volatility, and engagement. From the GLP-1 tidal wave and next-generation weight loss drugs to the 19 different forms of “rebate” money that may never reach your plan, Joey explains why sound-bite solutions fall short and what it actually takes to build a smarter pharmacy program.

Joey also tackles the uncomfortable truth about advisor and PBM conflicts of interest—and why asking the right questions may be the single most important thing a plan sponsor can do to protect their fiduciary standing and their people.

About Joey Dizenhouse: Joey Dizenhouse is CEO of SlateRx and a credentialed actuary with over 25 years of experience in employee benefits and pharmacy. Having built his career at Towers Perrin and Willis Towers Watson before leading pharmacy coalition programs, Joey founded SlateRx to help self-insured plan sponsors navigate the increasingly complex and costly pharmacy supply chain—working from the inside to fix what is broken.

About Vincent Catalano: Vincent Catalano brings over 23 years of employee benefits experience as an independent consultant and host of The CLEARly Beneficial Podcast. His unique position outside corporate constraints allows him to have frank conversations about healthcare issues that others can’t address.

This episode is brought to you by HealthNEXT. HealthNEXT partners with employers to transform their employee health benefits through innovative, results-driven solutions that prioritize both cost savings and improved health outcomes.

Disclaimer: The information provided in this podcast is for educational and informational purposes only and should not be construed as legal, financial, or professional advice. Listeners should consult with qualified professionals regarding their specific situations.

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Transcript

SPEAKER_00 0:04

Welcome to the Clearly Beneficial Podcast, the show where we rip off the band-aid and explore the future of healthcare, benefits, and the people driving innovation in the industry. This episode is brought to you by Health Next, the company leading the way in helping employers build enduring cultures of health and well-being, reducing medical cost trends, and increasing organizational performance. To learn more how they can help you, visit healthnext.com.

SPEAKER_01 0:34

Well, hey everybody. Welcome to season two, episode two of the Clearly Beneficial Podcast. I'm your host, Vincent Catalano, and um super excited to uh meet today with uh the CEO of Slate RX, uh Joey Diesenhouse. And uh we had a really great conversation uh a few weeks back uh as we met on LinkedIn and we got to know each other a bit and we got to talking about um our respective backgrounds, which are which are actually quite similar, and um sort of how he you know went from the consulting side of employee benefits to creating uh Slate on X and we'll get into some of that. But uh Joey, welcome.

SPEAKER_02 1:15

Vinny, great to have uh great to be on the show. Thanks for having me.

SPEAKER_01 1:18

No, you're very welcome.

SPEAKER_02 1:19

Thank you for being here.

SPEAKER_01 1:21

So take us back a little bit. Um, I you know, you and I both, it looked like uh reminded myself of your LinkedIn profile this morning. It looks like we both spent about the same time in uh in consulting. You were you were Towers Parent Wills Towers, and I have me at uh at Game Luger and Lofton. So uh take us back to those days and and uh sort of uh what that journey was like, and and then take us up to where you where you decided light bulb went off in your head and you said, I gotta do this other thing over here. So uh tell us that story.

SPEAKER_02 1:50

Yeah, what the day I decided I wanted to do drugs, right? Uh well uh uh so so I am an actuary by background, which means that no one ever wants to invite me to their party and I still desperately want to go. But uh yeah, I started my career as uh many actuaries do in pension in pension-related work. And I stayed there for you know maybe 15 minutes and realized that wasn't a great fit, moved into healthcare. Uh uh, this is up in Canada where I grew up, and I realized that um the the US uh opportunity was just much more substantial, more ways to help plan sponsors related to their benefit costs. And so moved moved to the United States 25 years or so ago, um, and have spent my career mostly, mostly in the Southeast. Uh, currently reside in Nashville, Tennessee. And uh uh working in healthcare was a great fit and really enjoyed that work uh and started started uh morphing more and more over time into pharmacy-related work, which I really enjoyed. And and as well I'm sure we'll talk about today. I mean, so these issues that we that we lament about related to the pharmaceutical industry and the supply chain, they're not new issues. They've been around a long time. And so even thinking back, you know, circa 2000, you know, I realized, you know, there's a lot of opportunity here, a lot of ways to help, and a lot of things that are broken, um, which got me really interested in sort of looking for opportunities to you know to make a difference and fix them. And it started with a uh a particular client that I started working with circa 2003, 2004, that wanted to um build a solution to help um aggregate plan sponsors and buy pharmacy benefits as a coalition, if you will. And started working with them and for many years was helping support that effort. And then 10 years later or so I went to work for that outfit. I left, I left uh what had then become uh just was about to become Willis Towers Watts, and this is circa 2015, 2016, and left to join the um the coalition organization to help build out the pharmacy program and supply chain, and and the program grew and became very successful. And and then more recently identified that there were still some real opportunities to help uh plans buy better. And the the opportunity for uh a new organization came up where um some investors with like-minded um belief systems and philosophies kind of reached out and asked, asked for my you know, my input and willingness to participate. And I I love the idea of of being able to sort of continue fighting back against pharma and and the perils of the industry, but do it kind of from the inside, right? As an administrator of sorts. And so that was the that was the genesis of what became what became slate. But you know, we you know, there we are like other organizations trying to help sift through the sort of nonsense of the industry and help plan sponsors empower them to deal with what is an increasingly complicated environment uh and um you know, and help and help manage these um you know, these sometimes uncontrollable um expenses. And that's that's pretty much what what I do uh all day, every day.

SPEAKER_01 4:54

As you're speaking, you know, it it's amazing to me to think, you know, you and and other folks I've had on the podcast, you know, when I started thinking about a triangle, right? And and a triangle of knowledge, basically. And and people like you and and others, and and I maybe I'm a little bit sort of like that in a sense, but you know, there's this like the sharp tip of the of the pyramid all the way at the top. And and that is the kernel of knowledge that a lot of that a very small percentage of the population has pertaining to um all the things that we do, you know, in terms of employee benefits consulting, in terms of pharma. You know, it's only probably in the last year that that the that the term PBM has become launched into the national consciousness, right? No one knew what a PVM was before, you know, and then you have Mark Cuban out there banging the drum on PVMs and transparency and all the things. And and I can't help but think that you know the transparency component of this is is a good thing. Now, the question is, how do you take all that transparency and craft something that is ultimately workable? I mean, how does how does what's your vision of that?

SPEAKER_02 6:05

Yeah, yeah, well, well said. Uh, I think that so when when people who have just tremendous uh followings um such as such as Mark Cuban get involved, it makes a real difference because it brings to the to the forefront issues that in in this case have been around a long time, but were not really uh sort of available to lots of people, at least um in a real way. And so with the combination of social media and then some really active voices that have a lot of followers coming to bear, it really has sort of changed the dynamic a little bit where these old older issues are becoming sort of more systemically recognized, right? But the problem, the problem when it comes to pharmacy, in my view, is in some ways it can be described as being pretty simple, but in others it's extremely complicated. And um in my experience, sort of one one-sentence answers such as rebates should die a miserable, bloody death, right? Those statements sound good and would ultimately result in a good answer if uh if they could just be um made to be. But the consequences of those statements happen first. So if we, you know, as an example, if we want to get rid of rebates, then there are several, eight, seven, eight, twelve steps to do before we can get there without a loss to to plans that are doing things right along the way. And I'm not sure how we skip those steps necessarily without a major overhaul of the underlying, you know, regulatory environment that we're in. And even then I think it would be difficult. And so sound bites, while they're great, it can cause a little bit of confusion. What I like about what's happening now is there is an increased recognition that something has to give. Because if we, you know, if we think back you know to to you know the year 2000, let's say, just to keep going back there, because I guess I guess I'm I'm uh get getting older, right? The um the uh the portion of spend attributable to pharmacy, you know, what might have been 12%, 15% of healthcare dollar, and that was a small, much smaller healthcare dollar. And here we are today, 30% for some plans, even more, depending on where you draw the line. Do you count, you know, drug therapies administered by a provider or J-code products? Do you count, you know, uh immunomodulating therapies or things like, you know, um, you know, CAR T, you know, uh other other types of sort of cell therapy. And depending on where you draw the line, you can get to 40 or 50 percent of spend. Um, and so these are material.

SPEAKER_01 8:37

One of those therapies, one of those therapies can can blow out an entire health plan, you know, one of the genetic therapies, you know, in terms of the cost of one of those things. And we could talk about a little bit of that later, but no, no, you're you're absolutely right. I mean, I remember as a broker, you know, looking at at the percentage of drug cost relative to the overall premium um that you would build up for a client. And you're exactly right. I mean, it went from 10%. I mean, when I when I left uh being a full-time broker, I would say that you're you're exactly right on that number was closer to 35-40 percent. I mean, that's mind-blowing to think that 35 to 40 percent of the medical premium for a month for in in this in my example, an employee was you know directed toward pharmacy. And when you consider that, a lot of people either, you know, a lot of them maybe don't take drugs or two still take generics. I mean, 92% of prescriptions-ish, probably, and correct me if I'm wrong, you know better than I do, but the high low 90s is that is that sweet spot of generic drug prescription and then brand and then non-formulary. So people are doing a lot of organizations and people are doing the right thing by taking generics, but at the same time, where does it fall, where does it fall off the rails in your mind?

SPEAKER_02 9:57

Yeah, no, you're you're right. Uh generic dispensing um for a program that is properly incentivizing things should should see north of 90% and oftentimes up into the low 90s. Uh, and and you know, but that but that 92% of of prescriptions, if you will, might be 15% of the dollars, right? And then the other 8% is the other, you know, majority of the spend, and then you break it down further, and you might have you might have three or four belly buttons that are driving 10% of the cost in the plan. So the volatility, uh, whilst many of the issues have continued over the years in pharma at the big at the highest levels, volatility is one issue that has increased demonstrably over the years, right? So how you manage volatility is a question that plan sponsors will grapple with. And I think that, you know, creative ways to handle that issue, um, short of sort of fully insuring that risk, because there are cost consequences to doing that too. I think there are some um solutions that can be, you know, that can be creatively designed to help mitigate, but maybe not fully protect against that volatility. And uh, you know, in terms of uh in terms of scary stories, I can tell you about an individual case that I ran across uh in the last six months where a single a single belly button, a single person um was going to accumulate something like$15 million of pharmacy expenses in a single year. And and so that that would be a rare case to get to that kind of numbers, but two and three and four and five million dollars is becoming increasingly common. And even if you have five, ten thousand covered people in your program, a five million dollar extra spend is more than just material. That could be sort of game-changing.

SPEAKER_01 11:37

Um you look at, and you know, I I you know jokingly say that, you know, every you know, watching this, watching any sporting event or anything on TV where you're you're constantly bombarded by by drug ads, um, it's always fascinating for me to to to pull out good RX and and just see what the retail of that particular drug is in my local community. And and you know, nothing that's advertised to you on TV is is less than$1,000 a month. I mean, it's all those are all expensive things, all brand names, everybody's you know, you know, dancing on the TV. And and then you know, you read the side effects and you're like, I'll keep what I have. I don't need those side effects, right? But at the same time, at the same time, this is this is our country and our model, you know, we're advertised to we um, you know, right now we're in a very interesting inflection point. And I don't know why we don't need to go down this road too hard, but you know, with GLP1s all of a sudden going from a costly injectable now to a pill form, um, but it's still pricey. Someone has to pay for it. And and if a retail, and this is what a lot of people don't get, you know, what I love is watching these ads and seeing people on commercial plans will pay$25 or nothing per prescription or something like that. But what they're not saying is that the employer is still on the hook for the thousand dollars a month that is associated with that drug. Is that right?

SPEAKER_02 13:05

Oh, yeah, all of all of what you said, uh lots of lots of good stuff in there. Um and so I'd like to say a couple of things that might be of interest to your listenership. Um, you know, first, you mentioned ads, you're right on. That's a unique model that only exists in the US and one or two other markets around the world. Uh, and having grown up in Canada, I could sort of speak to you know a little bit of that difference and how it's perceived and how it and how it results in in behavior change. But think about think about one drug that everybody's heard of called Humera. Of course, Humera now has a biosimilar, lots of biosimilars, and so we're not filling Humera anymore. And hopefully you're not either in your plan. Um, when was the last time you saw an ad for Humera? And the answer, if you think about it, probably isn't for a while. But if you were watching, if you were watching a a TiVo recorded episode of a of a TV show that you love that happened to be sitting on your recordings from several years ago, you'd have at least one Humera commercial every hour of TV that you watched. So it's just telling there's a reason why those those advertising campaigns are so lucrative and the man and the manufacturers are willing to spend the money because that that has an impact. Prescribers, you know, they they they're influenced by that material as well and what their patients say. And that is a real, you know, if I were to list the top 10 issues in the industry, I would put this one somewhere near the top. That is, prescribers don't necessarily know how much each drug costs. It's not fair to them to be able to know which drugs are on which formularies and what costs, what, where, and when, and how. Every PBM might have some tools to use. Those tools are different, they're not universally available, the data is not universally current. So it's tough. Uh, and and as a result, you know, uh prescriber education is a very important element to an effective pharmacy program, not just because you end up spending like humongously valid point, Joey.

SPEAKER_01 14:53

I mean, I want to dig into that for a second because, and this is again for for the lay user. I mean, this is this is for anybody who goes to the doctor. You know, your doctor writes a script. How many doctors are asking you? So let's take a look at your health plan and see what's on your formulary before asking you the question of what is being uh okay, can I prescribe this or not? And and so there's this really interesting dynamic going on. And I'm seeing more and more doctors online in on TV. I mean, there was a whole segment the other day on uh CBS Sunday morning about denials and claims denials and drugs being denied. Um it makes for great soundbounds, but but what they're not really telling the story of is you know that there's this group of people and physicians, maybe even amongst them, right? Who they want to be able to treat their patients the way they want to treat their patients. If they need X, I'm gonna write a I'm gonna write a script for X. And you know, oh, is it covered? Oh, I don't know if it's covered. And now that poor that poor member shows up at the pharmacy with that script, and the poor pharmacist at the at the at the at the drugstore goes, oh, not not in formulary. So so so to your point, I think it's incredibly important about provide a provider um and physician education. I mean, how do we get there?

SPEAKER_02 16:13

Yeah, well, and so what what I would tell you is, you know, and I I I certainly can't speak for every prescriber out there. I can I can tell you the data and uh uh information that we've collected and garnered over the years. Uh, you know, generally speaking, prescribers, you know, want to get their patients to the least expensive product that is efficacious, right? So let's assume we're never going to be thinking about a drug that's inferior to another. We're only talking about drugs that are clinically appropriate for the specific circumstances with documentation, study data, indications, and so forth. Well, I think most prescribers would absolutely want to get the patient to the least expensive product, but also not want to have to invest a ton of time to get there. So, mission one is to how do they get there? How do they get that information? There's an AI being built for that somewhere, but perhaps it is it is not readily available. And I'm I'm not here, I'm not here to provide a commercial for anything. I'm here, I'm here to help you know your listenership sort of think about the questions to ask, um, and and and get educated on the subject. And so that's one question I would ask. There are groups, there are groups out there um that that will that will provide an element of that and and how well it gets done will have a direct impact on how well the program performs.

SPEAKER_01 17:23

That mostly, I mean, like you, you know, you were we're both uh acquainted with with Farin at uh at Scripta. You know, I mean, those guys, you know, do that pharmacy navigation, help the employer who subscribes to their service work on that. But it's one thing to have an employer provide the tools for their employees to help navigate. It's another thing for the un, you know, the the uncommercially insured masses to know. If you're on an ACA plan, if you're on Medicare, if you're on any of that, you're you're kind of on your own.

SPEAKER_02 17:52

Well, and there's a you know, there's that we're only scratching the surface because the type of payer impacts things tremendously. You mentioned what are called copay cards. That's the concept of getting the patient down to$25, but who knows what the plan is paying. Some plans are allowed to use them, some plans are not allowed to use them. So not everything's available everywhere. But on when it comes to physician education and prescriber education, our our methodology has always been use the clinical process, right? Because you know, you know, for our customers, we're the pharmaceutical and therapeutics committee, right? We run the clinical process. We use the process as an opportunity to coach and educate the prescriber. And that something as simple as that doesn't happen nearly enough in the industry and is really important because it influences behavior, not just because you get to a less expensive drug. That's not the win here by itself. The win here by itself is you mentioned the CBS episode, which I which I saw as well. You're you want to get to a place where you can get to the right answer without the patient having to first get denied, then get redirected, then wait another week, then get to the right drug, or worse, not get to the right drug. But instead, all of it happens right away and preferably without a denial, because now the patient is happy too. And let's not, you know, let's not overlook the fact that, you know, pharmacy is the most used benefit in the healthcare spectrum. More people use a drug than go to a hospital or have a surgery. And therefore, you know, these are expensive benefits, so they better be perceived as valuable. And if people don't perceive them as valuable because they get denied for something or they notice that they can pay cash and get something cheaper, which is another issue we find happens if the program's not designed correctly. These are all uh detriments to the success of the plan. And I think that, you know, I think that uh and uh so if I put it together, right, I would tell you and this isn't rocket science, it's also not brand new thinking, but uh those those that get this thinking right tend to do very well relative to average performance. And that thinking is you look at each dynamic within the pharmacy program individually and then collectively. And those those dynamics are the unit cost, how much is the drug, the utilization, how many drugs are people using, the mix, which drug are people using, right? Did they take the expensive one or less expensive one? The volatility, which we mentioned is uh an incoming, newer, tougher sort of element. And then that fifth one we would call engagement. Engagement meaning how how well is the program perceived in getting the mileage for whoever's paying the bill beside the patient. That would be engagement for the patient, the prescriber, and the plan, the administrators, the you know, the HR team leads that run it, the trustees, the fund, and so forth. So you have five, five levers: unit cost, utilization, mix, volatility, and engagement. And if you can think through all of those, you know, which will probably involve working with an advisor like you know, like your former firm or my former firm or others, to to help, you know, help you think through these things and and craft a solution because you know you're you know, your typical uh business manager in a in a in a collective bargained fund or in an employer plan, they have many responsibilities, right? They don't just do pharmacy all day long. And so it's impossible to be able to sort of think about things end to end when there's only so many hours in a day. And this is where I think I think uh third-party advisory services can help, but it also requires you know advisors that have depth in pharmacy because this is a very niche, a very niche area that's like.

SPEAKER_01 21:20

Wow, there's a lot there, man, that you just said. Um I mean, there's a lot, a lot going on in that that that two minutes. Um, no, I mean you are absolutely right. And and the crux of it is is to me you you you organizations, and when I say organizations, I'm loosely speaking about anybody who's who's a large mid size organization with you know probably 250 to 10,000 employees in the mid market, right? Where you tend to not have enough sophistication in the HR suite on benefits or the C suite on benefits. I mean, when you've got 10,000 or more. On enterprise level, you've got more sophistication under the hood than you do for smaller organizations. Um, the problem is that there's a lot more of those 250 to 10,000 size companies in America than than the enterprise level companies. Um, and they themselves don't they're busy, they they're they're not getting the knowledge they need. They don't have the knowledge they need in-house. And I gotta say, I mean, and this is this is, I mean, you know, I'll take some heat for this, but I would say the the number of properly trained consultants that can sit there and and do exactly what you just said in pharmacy and in overall health plan management is is not as as big as it would it should be, you know, and and as the OGs you know in the industry are retiring, you know, this this next grouping of advisors isn't trained the way they used to be. I mean, like here in California, you know, fully insured is the norm here, where the rest of the country, self-insured is the norm, you know, and so we don't have though that level of advisor here that has sophistication to talk pharmacy, number one, number two, sophistication to even talk about stop loss and self-funding. And so, so how how do we what is the formula? What what's what's what what is the the things that that we in communicating in in a way like this can do to share knowledge to the to the market effectively?

SPEAKER_02 23:38

Yeah, it's it's an excellent, it's an excellent question. You know, I think that um you know there are some there are some prompts that can be used, right? When let's say let's say you run a program of that size that you had mentioned in, you know, 250 to 10,000, and you're looking for you're looking for someone to help you with pharmacy, you know, what I what I would say is there have been a lot of um a lot of I would call them niche or niche uh organizations that have come up saying we're gonna focus on pharmacy because we see this need and we have the right expertise. And I I think a good pharmacy advisory team will always have a qualified pharmacist on it because there's always clinical and operational elements that are just fundamental. I think it should always have a financially oriented person because of the just the challenges in the supply chain. Um, and then a design element, uh, a design-oriented person because of the broader consequences on perceptions, engagement levels, um, and so forth. Now that's three roles. Does it have to be three different people? No. But you know, it's it probably isn't one person because this is a very broad space with lots of lots of things that require depth, um, and that requires experience and that requires time. So I think, you know, some fundamental questions about, you know, how you're going to be serviced by your advisory partner, what's in the scope, and maybe some prompting questions to show the level of depth that you're looking for. And I think we could help, you know, we could help your listenership kind of think about those questions, if that's helpful for them, would get you, you know, some of some of the way there, um, usually just challenging the thinking, right? So, uh, and I'm I'm not speaking evil of anyone in particular, but you know, let's say you work with someone already and you're happy with the firm you work with. But when it comes to pharmacy, you don't necessarily get uh, you know, anyone that you would consider truly deep in pharmacy. Well, the the the thought of losing your business is probably enough to, you know, to get someone on your account if you just were to raise your hand and say, I need you to add some pharmacy resources to my team, even at a at a size, you know, of the groups we're talking about here. If the firm doesn't have those resources, then that becomes a question of how do, you know, how did how can your business be shared, perhaps. But but the absence of this, uh the consequences of not focusing more on these issues related to pharmacy are really serious. I'm gonna I'm gonna give you an example, and I'm not I'm not trying to scare you, but you mentioned GLPs. And I, you know, how can we talk about pharmacy for more than five minutes and not mention GLPs in today's day and age, right? So you know, the there's lots of scary things out there as it relates to GLPs, right? I'm not sure how familiar, you know, you personally, uh Vinny, or you listening today, how familiar you are with this market, but you know, you probably heard of OZMPIC and Monjaro and Wagovy, Zetbound, and these other products. Well, you know, the the types of users we have today, the volume of utilization of these medications is only a tiny fraction of what it can become because they're still somewhat limited in their accessibility and supply sometimes, and their indications, but that's all gonna change. More indications covering more situations with more supply is only gonna continue. And we are currently on what we call generation two of these products, and some of you may have heard of new generation products coming. One one that is gonna be released very soon is called Redatrutide. It's called a generation three product because it hits uh three receptor sites, which just makes it even more powerful and successful than second generation or first generation products. And all that means is just to keep it simple, um less people will get side effect uh significance from these products. They'll be able to tolerate them, which means they'll stay on them. Part of the reason GLPs haven't exploded as much so far is because such a large percentage of those that take them have such GI or other issues that they can't keep taking them. So they take them for two months and they stop. If everybody took them and kept taking them, you know, your expenses would go through the roof,$20,$30,$40 per emplo per member per month more, per belly button per month more. And so this is only going to get worse as the pipeline continues. And that's just GLPs, which are not super expensive. They're just highly used and not cheap.

SPEAKER_01 27:50

Right. So but they're also finding other things to in off-label prescription, you know, whether it's inflammation or or you know, there's a lot of of conditions that GLPs seem to be uh in a good position to help uh treat.

SPEAKER_02 28:09

Uh absolutely. They all they already obviously are used for diabetes. They all they um have indications for weight loss, they have indications for a number of uh uh um adjacencies to weight loss or to obesity, if you will. So, you know, major adverse cardiovascular events or MACE, um, fatty liver disease, which comes with an acronym called NASH, obstructive sleep apnea, and they're they're in um in the current process of getting indications for other things like there is a there's a direct connection between the use of these products potentially and um management of compulsive, addictive, and compulsive personalities. So you have a whole range of things there. And then there's um, you know, then there's Alzheimer's related applications. Diabetes is sometimes um the Alzheimer's is sometimes referred to as um diabetes type three. You may have heard that. So there's a connection there, you know, pharmacologically. And so yeah, it's just gonna be more and more people, plus the products are more and more tolerable. And even at a thousand a month or 500 a month or 200 a month, it'll add up to the point where it's it's uh it's not palatable for plan sponsors. And so some people will then say, yeah, but we're gonna save money because our people are gonna be healthier. We're gonna have less heart attacks and less strokes. And to some extent that will be true. But if your population is working age, if you're covering an active employee population, let's say, or an active trust, and you don't have retirees, either early or Medicare retirees, then you know it's it's uh much less likely that you're gonna save money during that part of the person's lifetime. They may sit, they may have less issues in the 60s and 70s, uh, in their 60s and 70s, but probably not while they're working.

SPEAKER_01 29:47

And that becomes a question of you're not seeing that employee stay around for 20 years anymore. You know, that that that employee is only gonna be around for two to five, you know. Um, but but this was, you know, you just put forth an interesting argument because that was the argument I remember back in the day when I had a client and all of a sudden I was, I was I was keeping an eye on pharmacy claims, and all of a sudden I started seeing a particular drug be being used in the in their workforce. And I'm like, what is this? And I and I dug into it and it was a prep drug, a pre-exposure prophylaxis drug. And um, you know, for the listener, these are drugs people can take to um minimize someone contracting, you know, uh HIV. And um, you know, it ended up in a conversation with a large health plan here in California um uh about their motivation to prescribe this drug. And and their their they had no, even though it was, you know, I was calling the plan sponsor, it was you know, a thousand bucks a month, you're you're paying for this drug. Um the employees paying a$25 copay, so they don't know that it's a it's a$1,200,000 a month drug. But the end of the day, um the health plan said, well, we're we're happy to prescribe it because we are warding off the potential for someone to contract HIV, because the cost of treating HIV is so much higher than paying the price now for for this kind of drug. And and and it's it was just a fascinating line of logic. I mean, I mean, what do you how do you interpret that?

SPEAKER_02 31:18

Yeah, there are there are examples where the inverse of my GLP um arguments come to fruition. HIV can be one. I think it depends a little bit on the population and turnover in particular, right? But if you're the insurance company and that patient is probably going from one plan to another but still insured, then the actuaries at the insurance company are probably thinking about it from that perspective, not just one employer, but the long term. If you're a self-funded plan sponsor and you have high turnover, like you know, in a in a in a an industry where you might see a lot of HIV, for example, it might be less likely. But another good example that fits that uh that that bill is um is is Hep C. Hepatitis C was a condition that, you know, in the last uh 15 years became curable with high success rates. And so you had these um, yeah. Yep, these these retroviral drugs that would come in um and they'd be a single course of therapy of nine months, plus or minus. Um were nine months, some were less. And as a result, you'd be essentially cured. But these therapies were$70,000,$60,000, which at the time was a lot of money. And but now if you look backwards, you don't see a lot of hep C anymore. And so that so that's an example of where the consequences of hep C do are appreciable during the working life, right? You know, up to and including potentially, you know, needs for transplant and other and other things. So I I do think it isn't simple. And and what you're calling out, Vinny, which is right on, is that it isn't as simple as I want to pull a trigger and for example, I'm just not gonna cover GLP ones because I because because because Joey and Vinny said it's not it's gonna cost me money. Well, maybe in some cases, but you know, for for diabetes, they do create value and and and they're well documented for the value that they create. And so maybe it's a question of do you cover them for obesity or not? Or do you cover them in very limited situations, you know, not not necessarily a person with a 30 BMI per se, uh, but a person with a 60 BMI, where the actual condition really is.

SPEAKER_01 33:19

Or in concert with lifestyle changes, coaching, you know, dietary, you know, uh assistance, you know, nutrition, you know, all those things. I mean, it's that there are a few well-being companies out there now that that are, you know, you know, doing the GLP one, but you've got to do this too in order to get to get to stay on that.

SPEAKER_02 33:36

So I think that's important. Exactly. And that's why, and that's why to try to bring this back up to the top, because it's so easy to get lost in the weeds in this subject, you you want to you want to be able to think about this from a strategic perspective so you can handle unit cost, utilization, mix, volatility, and engagement. And then you need to consider finding partners, whether that is an advisor or not included, whether that you know that is your PBM or the vendor that you use to administer those benefits. Make sure that their incentives are aligned with yours. Ask yourself does does this other company make more money when I spend more money? Because if the answer is yes, I don't know how you can expect them to be looking out for your best interests. You know, when you sign a contract with a PBM, you know, normally that is a zero-sum game where their loss is your win and vice versa. So you're negotiating against them. Ask yourself if you can find a partner that will negotiate for you, not against you. Because and because they're not compensated on the basis of what drugs get used or when or how. These are things that, at least by asking the questions. And finally, where does the money go? We haven't talked a lot about the supply chain here, but the money, which is that rebate conversation, there's so much money that starts at the very top in an agreement between a manufacturer and some third party, usually an aggregator. And and then there are several people, three, four, five, six, eight more people with hands in that cookie jar potentially along the way before you as the plan sponsor. And then there's all these different kinds of money. People use the term rebate colloquially, like rebates are money that get paid. Yes, that's true, but rebates can be called 20 different things. They're not just called rebates. So you may get all the rebate money, but there may be 19 other kinds of money you're not getting. And how do you figure that out? Well, you ask the questions, you go to the phone.

SPEAKER_01 35:28

And this, and this, and this comes down to you know, a lot of organizations, you know, look look to the benefit advisor as the quarterback of these things. And and so again, it comes down to how do you determine if that benefit advisor is acting in their own best interests? Um, are they advising advising you from a neutral stance and perspective? Um, are they making more money when you spend more money or are they working on a flat fee basis, a transparent flat fee basis? Do they have the the um uh chops to actually advise you on the things you need advice for? I mean that that that's a that's a fundamental. And and really, you know, where are where is their hand in the cookie jar? I mean, I remember a story someone told me a TPA stole to told me that you know, a client, you know, an advisor put in a dollar per script charge into the plan via the TPA so that no matter what scripts were being written, that broker made a buck. You know, and I'm sure that goes on all the time, every day. And so I I think employers need to uh you know spend more time vetting the the skill set and the transparency uh of what they're willing to pay for advisory services and really um keep a limiter on that, in my opinion.

SPEAKER_02 36:50

Yeah, I agree. And and maybe a conversation for another time, um given given where we are on the hour here. But you know, the the concept, the concept of fiduciary responsibility for the plan sponsor, that's another issue that's really surfaced lately. You're seeing lawsuits out there basically saying that you know the person that owns the plan is a fiduciary for that plan, always has been, and they're responsible for that plan. They're responsible to know what the right answer is, even though we're talking about how that's impossible. It's not fair for the plan sponsor to know everything about pharmacy when they have to know other things about medical and about all dental and everything else. The reality is that the law says that you know it's yeah, you have to know what a prudent person would know related to the management of the program. So, so asking these questions can protect you, whether it's for the advisor or the PBM or both. Are they are they willing to are they willing to take fiduciary responsibility? And if they're not, that doesn't mean that they're evil, but why not? Why not? Are they willing to disclose all the sources of compensation? Maybe they won't even give them all to you, but they'll disclose all of them. They can itemize them for you, and you know what they are. As a fiduciary, these kinds of responsibilities, I don't think they're going away with the with the lawsuits that we're seeing and that the amount of advocacy that is growing in support of that fiduciary responsibility. I don't think it's going away, and therefore, you know, I think we'll be back talking about it more over time.

SPEAKER_01 38:12

No, no, no. We're at the tippity tip of the iceberg on that, I think. I mean, you you saw the horizon uh blue cross, blue shield of New Jersey, you know, scenario having an$800 million settlement. You know, it's it's and that's one state with one plan. You know, um, there's a there's a lot that that is that is gonna be unwound. And, you know, you you know, again, you you know, when you start talking about the fiduciary, you know, brokers don't want to be the fiduciary. I'm not pointing at myself, I'm just sort of saying, you know, the brokers don't want that role. I mean, brokers don't even want to do Ben Admin and do Cobra administration on their employers, employer clients' behalf because they don't want the problem, they don't want the claim, they don't want the responsibility. So it's the employer themselves that actually has to take it seriously and and put themselves in a position of being the reasonable person to be able to manage the plan in partnership with the right advisory. I think that's the way it works, right?

SPEAKER_02 39:07

Yes, uh, I think what you said is true. I think over time there might be some subset of advisors that are willing to do something. There may already be some. Same in the PBM space. There are a few of us that are willing to do this. Um, I think more will do it over time. But but asking the question opens the door for you to take control of the conversation. And in my view, you end up no worse off because you've learned something, but you most likely end up better off because you would have gained something from either your your advisor, partner, or your or your administrator, vendor, PBM, whatever you want to call them, or both. And um, and and and not doing anything five years ago may not have really meant much. I don't think it's gonna be okay anymore just based on where things are, where things are going. Um, and this ties back to sort of the awareness in the masses that come from things like you know, the social media-centric environment that we live in today where things go viral and get a whole lot of attention that otherwise might have just maybe sort of um, you know, kind of fizzled away.

SPEAKER_01 40:09

Again, on Mark Cuban's bad side. I I mean just just that that person alone is is enough with a flamethrower to to cause you know Ajita, you know, a cross an industry. And and and he's doing so. And so um, no, it's it's interesting. So, you know, on all those happy notes, Joey, I I just uh one one question I have for you, which is unrelated to all of this, is are are you do you happen to be a wine guy or the fact that you live in Nashville, the land of brown liquor, maybe more of a of a cocktail guy, or do you don't drink at all?

SPEAKER_02 40:38

What's uh what's your uh Yeah, you know, I have uh so so there was a time where my answer would have been emphatic yes, and uh small batch bourbon was always my my sort of choice. Uh maybe several several years ago, I sort of I sort of uh uh weaned down my my uh my drinking. Uh I never collected alcohol, it never lasted long enough in my house to collect it, but I I do collect some things, uh, you know, currency and you know, numismatics, other things. But uh yeah, for I've I've been I've been, you know, as as as we get older, uh, you know, our health, our health can deteriorate pretty quickly. And I've found myself with some modest health issues that before they got more serious, I said, okay, I'm gonna try to make some changes uh and uh and and you know knock wood so far so good. But one of them was you can't you uh you can't you can't drink anymore because you don't have any control. So maybe I need a GLP one to help control my you know my ability to just have one drink.

SPEAKER_01 41:34

There's that. And you know, and and and frankly, you know, my my wife and I have this conversation all the time. I mean, I I I have a small wine collection in my basement, and um, you know, and she's like lost interest in drinking. And um I'm like, okay, what am I gonna do with all this wine? I mean, it might now take me 10 years to get through it, but I don't know that I'm gonna be adding much of a collection. So uh anyway, well listen, I just really I really enjoyed this conversation. It it's always great to talk to people who have insights uh in this industry, uh particularly in pharmacy and in an area where you know uh the greater, you know, interested masses are are learning more about it. They want to know all the all the bits that we just talked about, and uh I just want to thank you for your time and and and energy today. And uh uh hopefully we can have you back and we can we can unpack uh some more of this maybe uh later in the year.

SPEAKER_02 42:25

Well, thank you, Vinny. It's it's my pleasure, and and I I want to thank you as well for what you're doing. Uh, you know, it it's not lost on me that this is not easy work, and uh, but it's important work. These are issues that need to get out to as many people uh as much as possible. And so uh, you know, I'm uh happy to help and um I wish you all the best and lots of success in your endeavors.

SPEAKER_01 42:47

Okay, thank thank you so much, Joe. I appreciate it. This podcast reflects the personal views of the host and guests, not their employers or sponsors. See you next time.