PBM Fight: State to Federal Shift | Greg Reybold, Atty, APCI

Speech to text:

[00:01:19] Mike Koelzer, Host: Greg, for those that haven't come across you online, introduce yourself and tell our listeners what we're talking about today.

[00:01:26] Greg Reybold: My name is Greg Reybold, and I'm General Counsel and Vice President of Healthcare Policy with American Pharmacy Cooperative. Much of my work focuses on PBM reform throughout the country at the state level as well as the federal level, and thrilled to be here to be talking about that very subject today.

[00:01:42] Mike Koelzer, Host: Greg, your last job was in Georgia, And now you're more the sake of your job. Did you Ever get your hand slapped when you were in Georgia and you wanted to get more into the federal law and they said well Greg That's not our responsibility right now.

 How does it feel going [00:02:00] from state to federal organization?

[00:02:03] Greg Reybold: Yeah, so , being a part of the Georgia Pharmacy Association, certainly the bulk of my focus was on state, legislative advocacy, regulatory advocacy, and Agency advocacy 

 but state

Associations certainly offer input in connection with federal initiatives as well. And we do the occasional fly in and things like that. But with American Pharmacy Cooperative, APCI, as we call it, have had the opportunity to really get more involved at the federal level. And it's been fun, but certainly different, at the state level, depending on what state you're in. 40 days, Georgia is legislative days and you can, within 40 days, boom, sweeping changes the federal level. It just moves at a much, much slower pace.

[00:02:46] Mike Koelzer, Host: when you say 40 days you mean that's how long They're in session or that's how long it takes. What do you mean by the 40 part of that?

[00:02:55] Greg Reybold: Yeah, so exactly it in Georgia and a lot of states are similar, with slight [00:03:00] differences, but in Georgia there are 40 legislative days and those aren't necessarily calendar days, but they're

in session for 40 days

[00:03:07] Mike Koelzer, Host: so on average it's like a one day a week job. It's like you might have a job as a Something else a plumber and then you come basically for a week on average

[00:03:19] Greg Reybold: So, if you're looking at averages, yes. So in Georgia, what happens is usually the second week of January, they convene

and then they usually run it through the end of March or

 sometimes into April

and they fit those 40 legislative days into that period.

But there's a lot of state representatives and senators who do have full time jobs, and so it's in certain ways a sacrifice because they're stepping away from oftentimes their jobs, their careers,

sometimes family for days or weeks on

[00:03:46] Mike Koelzer, Host: is that just a once a year crack then at getting this done? And what happens if something surfaces in May

something needs a vote or so on? Do they just wait till January?

[00:03:57] Greg Reybold: Yeah, almost always.

There are certain circumstances [00:04:00] where, the General Assembly at the governor's instruction can convene a special session. But for the most part, that's your window in Georgia.

 And a lot of states follow a very similar suit. Some states do it a little bit differently, and

they're, they're in more throughout the year. But again, at the state level, you can see reform, pick your subject, happen really quickly,

 Federal is just a different ballgame.

 of the biggest differences to me is at a state general assembly, it's really easy to talk with the state representative, 

the representative, the senator, and you can engage with them

And And there's easy to access with them.

And if

you go up to the federal level, what's Really different is it's very much staff and committee driven. And so rarely will you be talking with the congressperson themselves. often you're working with their staffers or the committee staffers, there can be advantages and disadvantages. One of the advantages to that is a lot of these staffers get to be legitimate subject matter [00:05:00] experts, 

and so if you're working with a committee that's heavy on health or prescription drugs, a lot of these staffers they know their stuff.

And That can be really refreshing. Of course, it's also nice at times to be able to have access to and sway the Congress people themselves.

So pros and cons.

[00:05:18] Mike Koelzer, Host: Yeah, I guess when you say the staffers know a lot. Something that comes to my mind is, are they already swayed, because if you get maybe a state rep or something, it's like, you have to kind of teach them this, and if you get their ear, you can sort of mold it a little bit into we hate PBM kind of angle, but. the federal ones, since they know it so deep, I wonder if they already have some, leaning one way or the other just because they've heard from tens of dozens of hundreds of people on the subject already.

[00:05:55] Greg Reybold: I think that's a insightful comment. And I think the answer is yes certainly you can walk into that from [00:06:00] time to time, there may be a staffer who left one committee and goes to another or left one congressional office and goes to work on a committee.

And certainly, they have had hundreds, if not sometimes thousands of conversations on a particular subject,

 , certainly not all staffers, there are staffers who don't know a lot about prescription drugs or don't

know a lot

about drug policy or healthcare,

but I have been surprised at sort of the level of nuance that some of these staffers do have.

[00:06:31] Mike Koelzer, Host: other end. And we've heard this a lot from different groups when they say, talk to the legislators and so on. this advice we've heard over and over again is you should only be talking to them about what's affecting Their constituents because I know cliche from pharmacy you call and say You know I'm gonna lose my store that I've had forever is that true?

Is that the angle you have to take that basically [00:07:00] every argument has to come back to How it's affecting the average pharmacy customer. 

[00:07:06] Greg Reybold: So, I've been saying this a lot lately and I'm going to say it again, but advocacy is. In many ways, art, not science,

There's certainly tried and true methods that you can stick to. But what I would say is this is something that I've had a lot of conversations about lately and something we've heard a lot. a lot.

of what we do is patient focused, how this is going to impact patients.

But it's also fair game to talk about how it impacts you as a pharmacist and you as a pharmacy owner. And it's absolutely relevant and it's absolutely fair game. Now, whether the tact is, hey, my pharmacy is going to close in four weeks, six weeks, a year. I can't say, but what I can tell you is. A lot of the folks up in Congress are business people, they are owners of businesses, and I have found that they are often fascinated when they find out that many times, pharmacists are dispensing prescription drugs at a [00:08:00] loss.

If you're in any other business, it's almost unbelievable.

What other business do folks provide a service

and then lose money on that

service, and so it's a hundred percent fair game for a pharmacist. To share those experiences,

how it impacts

them as a business owner,

how it impacts

them as an employer, how it impacts them as a healthcare provider, and how it impacts the care that they provide to patients.

I think that's all fair game.

[00:08:26] Mike Koelzer, Host: Greg when you Go from something smaller to something bigger.

could argue that you had more power being a bigger fish in a smaller pond. And some can argue the other way that yes, you are a smaller fish in a bigger pond. But if you everybody else in the bigger pond to go a certain way, you can have more power that way. So far, what you've seen between state and [00:09:00] federal.

What has been your personal feeling of gratification that you've moved some minds and so on? Do you have a feeling of that of state versus federal in your position?

[00:09:12] Greg Reybold: I do. And I don't know that it's personal, but as an attorney and

an Advocate for pharmacy, I think you look at it as, hey are we effectively advocating? Are we shaping the industry in a positive way? Are we shaping change? And, when you're at the state level and you're doing your job. the right way and conditions are right. You're in a position where you can be one of the ones in the room when the decisions are getting made,

you can have tremendous shape on not only your state, but then what happens at the national level. It's very proud. When I was with GPHA, we worked on one of the first bills in the nation, Pharmacy Patient Protection Act in 2017, and it was written, first of its kind, instead of looking at very myopic, hey, we're going to go after MAC pricing or audits, it came in and it said, [00:10:00] hey, PBMs, there's a list of things that you can't do, and it was innovative at the time, and it was really, I think, satisfying to see that The Georgia Pharmacy Association passed that legislation and then watch it grow and move into other states and become model legislation and in certain cases improve and get better, 

that was really neat to see. Similar in 2019, first PBM steering law in the country that got passed and, fast forward now to 2024, right? What year? Where are we? 2024. 

[00:10:31] Mike Koelzer, Host: you're lucky you're in the right 

[00:10:33] Greg Reybold: That is,

but it's something where it's

been passed in a lot of states

and you're seeing that concept also introduced at the federal level.

So really satisfying to see that. But what I would say is at the state level, when you're doing your job right, it's a lot easier to put your hand on it and to shape it

and hopefully be in the room when decisions that impact pharmacists are being made. get to the federal level, it can be [00:11:00] a little bit of a different game,

 Again, you're not seeing bills pass one after the other, year after

year. 

so it may be getting the right questions asked in a hearing.

Getting some draft language changed close loopholes. And I feel like we've been very successful with a lot of that, and

you always try to look at, are we playing the game at the highest level that it can be played?

Are we 

shaping policy? Are we shaping conversation? Are we shaping the way these things are viewed?

And while it's measured differently, I think, at the state to federal level, you can absolutely influence both. 

[00:11:34] Mike Koelzer, Host: I one time talked to a county rep and she said, I don't want to go higher than this. I want to talk to these kinds of people.

I want to talk to neighbors. I want to do this. I want to do that. So some love at certain. Do 

You have anything good to say about the feds moving at A slower speed than the states or do you think it's just all, red tape [00:12:00] and gobbledygook is there a reason for that slowness? once heard that I don't know who the hell it was, but they said that.

On purpose, government is made slow so everybody can take a look at it and things like that lot of times from a Outsider it seems too slow. What are your 

thoughts on the efficiency of the federal system?

[00:12:21] Greg Reybold: Yeah, look, I don't think it's necessarily efficient, but is there a method to the madness? There very well might be.

 People who think, Hey, we already have enough laws, 

do we want to make it easier for folks to pass law after law? And I don't know maybe not.

[00:12:34] Greg Reybold: what I would say is when you're in a field Like pharmacy and you're trying to affect change and you're trying to bring relief to community pharmacists and their patients I sure would like to see it move faster.

[00:12:44] Mike Koelzer, Host: We haven't attacked the meat in the middle, but another question on the end of this, Michigan came out with a bunch of PBM laws on January 1st, 2024. And it seems like none of them [00:13:00] have changed. And then I read something about how. If you have a contract, some PBMs can not do something until 2028 and so on.

how does that work with contract things? So you're in a contract with a PBM, the law changes on January 1st. When is the expectation that pharmacies or whoever, is a part of the law would see things moving in correspondence with the law?

[00:13:33] Greg Reybold: =Yeah. It's a really good question, and I'll give you a couple different answers. Some of them more cynical than others, okay? But Some of it really does depend on how a bill is drafted

and how a Law is drafted, and so, for example, if a law says, hey, effective January 2025, a PBM cannot do A, B, C, D, E, F, and G, you're going to expect that.

[00:14:00] And hopefully see some immediate impact, fair enough. But a lot of these laws get drafted in ways where it says, For contracts entered into, on, or after.

And anything anything you can create some wiggle room, PBMs are gonna run with that. As far as they can possibly run, and so is a new provider manual update a new contract?

Their position is going to be no. And a lot of these contracts, if not evergreen, go on and on. And PBM just has the ability to go in and amend those via unilateral contract amendments or via provider manuals,

But the contract lives on. And so wording becomes really important.

On

top of that, There's all sorts of other angles there, 

and so obviously we saw Rutledge v PCMA was a great victory for pharmacy in a lot of ways. But in connection with networks and some steering angles, what we see is already a split in the circuit, between the 8th circuit and the 5th circuit. And so if you're a large [00:15:00] PBM, what are they going to do? They're going to construe The Supreme Court holding as narrowly as possible.

Look for any split in the circuits, and they look for arguments and ways to not adhere to certain state laws.

And so what We find is, even in states with really strong state laws, PBMs pushing the envelope.

And so, on certain lower hanging fruit laws, hey, no admin fees, or no copay clawbacks, or adhere to the Audit Bill of Rights. What you're going to find is, hopefully, Pretty good enforcement, pretty good adherence, but when you start hitting that live nerve mic and you start touching massive amounts of money, I mean, make believe money,

Things like steering and, rebate practices, things like that, they are gonna find every way they can to not adhere to those new laws, new regulations, etc.

[00:15:46] Mike Koelzer, Host: Yeah, and I suppose that to make it look good, they're going to take the low hanging fruit, change those as quickly as they can to maybe show a good faith gesture, which in fact is just a way to keep people away from the door so they [00:16:00] can keep the on in the back room.

[00:16:02] Greg Reybold: Yeah don't disagree, and I hate to compliment them, but they have, I would say, perfected, Not adhering to state laws and regs, almost to the point of art, 

 and again, I say that half kiddingly, half not,

becauseI think I was joking with my wife about this a couple weeks ago, and I was like, A lifetime of fighting pharmacy benefit managers and

Sometimes it feels like we lose and

I think my great fear is lying on my deathbed.

Hopefully many years from now And the doctor prescribes me something. Oh, it's a prior authorization. Sorry, you can't get it. Boom I die in a fit of rage, like

[00:16:37] Mike Koelzer, Host: And then they'll play the uh, what's the show with Larry David? They'll play that music of the 

[00:16:41] Greg Reybold: Yeah, I curb, curb your enthusiasm

[00:16:44] Mike Koelzer, Host: I forget what the song is, but so even the Easy Laws, they may not even do the 1st of January. I mean, they maybe don't flip a switch. They might even still be doing some things that just haven't [00:17:00] about yet, I suppose.

[00:17:03] Greg Reybold: Yeah, there, sometimes a ramp up period or an implementation period and I'm not speaking about that state specifically but there, there can be sometimes the, whoever the regulator is has to promulgate rules and regs, and

that can take some period of time, and there may be other basis for ramp ups,

but listen, you If you're in a state where there's a strong PBM law passed and you're a pharmacist, that's the time to start scrutinizing these claims and look for compliance and hop on it.

[00:17:28] Mike Koelzer, Host: We've been doing that. We've been sending stuff in and it's like, hey, if the PBM had a change, it would happen that first second, That's 

[00:17:35] Greg Reybold: Lord knows. But where they win, again, I say, even when we win, we lose. So often where they win is enforcement and implementation,

And that's all over the country. Some states have AGs or regulators who are more aggressive than others, but by and large, the PBMs do really well there.

And I always think about this, and I don't know if I've even said this to you before, but I remember my first year in law school, it was a torts class, and they were [00:18:00] looking at a case where there was like an automobile manufacturer. And Hey, we know X number of these cars are going to blow up

out of those X number are going to die. Out of those, X number are gonna sue,

go to a jury, let's do the math, hey, we make money, roll the cars out,

 And, by fatigue, PBMs know that they can outlast pharmacists in terms of enforcement. Know, do you have all day to file MAC complaints on every single claim? No. And no pharmacist does.

And so they know,

hey, there's this MAC law in this state, but, there'll be a rash of complaints early. Some will be investigated. Maybe we have to pay some out. We'll say, oops, our bad. But after six months, after a year, those complaints stop coming in and

they roll. 

[00:18:40] Mike Koelzer, Host: It's kind of like I've always said that it doesn't make any sense for me to get 100 percent on a test because it means that I wasn't tested, that I put too much into prep because maybe I would have gotten a 200 

[00:18:57] Greg Reybold: That's right.

[00:18:58] Mike Koelzer, Host: With [00:19:00] efficiencies, you always want to have some missing.

That means that you studied or whatever the. Processes right up to about where you should have, but you didn't go over. So I was just telling this to one of my team last week. I said, these PBMs and whoever big companies, Google or anybody, they don't want to hit all the laws if they're correct in all the laws, it means they're too particular. They're not aggressive enough and things like that. So, I told him, I said, they want to maybe be 98 percent correct and pay fines on that 2 percent instead of having double the legal team they need or 

[00:19:39] Greg Reybold: Yeah, 

[00:19:40] Mike Koelzer, Host: It's okay to miss, a few. And I think they don't care. They're making plenty of money.

[00:19:44] Greg Reybold: That's a really interesting perspective. And what I would say is because of their sheer size, even when they lose, they win, because even if they pay, let's say they get caught steering and they

pay a million dollar fine,

but they made a hundred million that state steering for the [00:20:00] year and getting, drug maker discounts to their affiliated pharmacies through back channels, plus

marking up prices on the drugs that they fill.

Yeah.

Hey, cost of doing business, when you have their economies of scale, even when they get caught, unless somebody is just committed to absolutely throwing the book at them,

it is not a deterrent to bad behavior.

[00:20:20] Mike Koelzer, Host: No. And I think that I'm not making big corporations out to be evil, but I think that individual pharmacy owners or business owners If they were to miss a law, they might take that personally, it might be, Hey, it only costs me a thousand bucks, but I don't like the fact that some people know about this or I had to admit that I didn't get this law, things like that. And so there might be some personal about. Not hitting a lot. The bigger corporations, it's a dollar sign maybe a marketing sign. [00:21:00] Period though.

[00:21:01] Greg Reybold: Yes. I agree with you. And on top of pharmacists or small businesses taking it personally, they also don't have that economy of scale. So if they do get caught and they do get dinged,

depending on what they're getting dinged for, it can be cost prohibitive,

It can be something that in a worst case scenario could potentially close the doors of a business jeopardize a state pharmacy license, 

[00:21:21] Mike Koelzer, Host: That's it. 

[00:21:23] Greg Reybold: when you're smaller, The stakes are higher. there's no doubt about it. Plus, pharmacists are, community pharmacy owners, main street businesses, enjoy great reputations in their communities, and that means something to them too.

[00:21:35] Mike Koelzer, Host: during COVID there was certain things that I did not do at my pharmacy because. I know I'm just a business. And if for some reason the governor has something gnawing at them that they want to make a lesson of somebody, it's just a [00:22:00] signature or a check mark away from your business being voided.

 The big boys they can say, well, this law is obviously not going to bring us down as a corporation, but you're a small pharmacy and the governor thinks she's been pushed around and wants to kick the dog. Well, we might be the dog they're going to kick.

[00:22:17] Greg Reybold: Yeah, and if you're a small business owner, that is not a place you want to be,

particularly when you're the type of business that,

you know, the state holds your license in the palm of their hand,

right. 

[00:22:27] Mike Koelzer, Host: that's exactly right. your comment on the PBMs, 

shining up things the way they want to get past. I don't want to put words in your mouth, but what are we talking about? can bend laws and, that kind of thing. It reminds me of one of my sons , I say to him the teacher said that you threw an airplane across the room.

No, I didn't. She's a liar. No, didn't throw it across the room. Was on the right side of the room and I threw it towards the back of the room. So that was the same side. It wasn't [00:23:00] across the room. All right. So you toss an airplane to the back of the room. No. You just said you did.

Now, you're calling your teacher a liar. No, but it wasn't an airplane. I just, crumbled it up. It didn't have any glide time at all. It was just a piece of paper I threw at somebody in the back of the room. That kind of thing, but they can go forever on that.

[00:23:17] Greg Reybold: Hey, look, maybe a future lawyer there,

[00:23:20] Mike Koelzer, Host: There you go.

[00:23:21] Greg Reybold: for better or worse, you

don't look

too happy about that.

[00:23:23] Mike Koelzer, Host: Yeah, that's right. 

All right, Greg all of a sudden, for some reason you are the only federal person that's on the legal team to make movement for pharmacy. For some reason, all the other legal pharmacists and associations and everything have gone away and you're the guy.

 What do you do? Obviously you need help. but what would be your own marching orders to say, all right, I'm going to start today and here's my step process to make this [00:24:00] right.

[00:24:00] Greg Reybold: Yeah. So, for forever, as long as We've been working on PBM reform, what I would say is we've been sitting at the table that the PBM set, and so we're always sort of trying to, and you've, I'm sure you've heard this before, Mike, whack a mole, we're always trying to rein in these very specific egregious practices, 

whatever that practice may be,

whether it's a copay clawback, steering, network exclusion, whatever it is, I'm seeing a lot of just craziness on discount cards and how PBMs are not covering but all of a sudden they're shifting the burden to the discount card

and they're charging a patient this huge fee or they're clawing back huge amounts of money from pharmacies percentage wise. There's always a new game.

So from

my perspective, what I would love to see at the federal level is a law passed that it's really quite simple. PBMs are not setting drug prices. PBMs are not creating networks. And once you sort of go [00:25:00] from there, and PBMs are not keeping rebates, and once you take away, what I would say is those are like, the big three legs that they stand on. Then they can't arbitrage the price of a drug in the same way. And so, what I would love to see is a law basically that says just that, and that has significant enforcement.

When I say significant enforcement, I don't mean, hey, you're going to pay a penalty, or a little fine here, a little fine there. We're talking about ultimately criminal culpability, similar to anti kickback statutes, or False Claims Act, things like that. PBM should not be setting drug prices. We've seen enough, 

the jury is out. We talk about our little kids, it's time to take the ball away.

We need to use an index based pricing, plus a fair dispensing fee, plus find a way to compensate growth or increases in expenses for dispensing fees, but PBMs cannot be setting drug prices. PBMs absolutely should not be able to create networks. not a preferred network, not a broad network. They should not be doing that. And then of course they shouldn't be steering or engaging in any of those sort of self [00:26:00] interested transactions either. So day one, that's what I'd be looking to do. And that's a lot of what we advocate for. Now you can go further than that, there, there's talk of, Hey, let's break these folks up. Should they be owning? Should they be affiliated with an insurer or vice versa? No, they shouldn't. And so, but obviously, once you start talking about sort of deconstructing the system, that's a lot more significant.

But what we know is, when PBMs set drug prices, pharmacies lose, patients lose, taxpayers lose. it's not disputable.

We've talked, APCI has worked with 3 axis advisors on two big reports.

Drug pricing in Part D, and one, just disparities in drug pricing across market channels. And again, this is data driven analysis. The jury is out. They cannot be setting drug prices. And similar with networks, when they're engaging in those network games, again, who's winning, who's losing? They're winning. They are the sole winner. the plans, the health insurers who they're affiliated with as [00:27:00] well.

But that's what I'd be looking at. And then if I was at an agency perspective, let's say the FTC, and I think they've done a lot of good work, they're looking under the right rocks in terms of the 6B study, certainly, but I think that I'd love to see the FTC take some action ultimately. beyond, hey, let's look at this and promulgate some regs.

I think that their behavior is anti competitive. I also think that it, much of it constitutes unfair methods of competition under section five of the FTC Act. So you put the hat on me and I'm at the FTC, that's what I'm looking at. If I'm over on the congressional side, what we were just talking about, again, passing legislation where their finger, the pen is out of their hand, the pencil is out of their hand, they're not setting prices, they're not creating networks, they've proven that they can't be trusted to do that.

[00:27:47] Mike Koelzer, Host: Greg the part about the networks, I'm trying to follow that. I know what they are, but when you have networks, then you have the monopolies because they're saying everybody has to do this. What do you [00:28:00] mean by networks in 

this regard and where is the danger of them?

[00:28:03] Greg Reybold: So when I'm talking about networks, I'm talking about them creating pharmacy networks or maybe broader, insurers creating provider networks ,

 So Many games happen at the network level. and I'll give you an example. In Part D, you've got federal law, federal language that essentially says that a patient should get their choice of, any willing provider,

So what do they do? They've got these broad networks and they go and create preferred networks 

 Oh, wait a minute, the federal law doesn't touch these preferred networks. And what we've seen when states have gone to rein in steering, for example, and say, Hey, PBM, you can't steer to your own pharmacy.

You have to give the patient access to any pharmacy in that network. Well, they create a narrow network,

 It may be a 90 day network with only the Mail order pharmacies are playing or it may be a specialty network where all of a sudden pharmacies and oncologists can't dispense certain drugs for those patients anymore.

It has to go to a [00:29:00] mail order pharmacy. And again, what they say is, Oh no, no, no, we're not steering. That's just who's in the network, so networks are key to a lot of what they do. And of course, they also create preferred networks to drive down what they reimburse pharmacies if they let them into those preferred networks as well.

[00:29:16] Mike Koelzer, Host: Let me see if I have this

 straight, it sounds like the network is a way to comply with the law by saying, patients and the corporations chose this, we have this other network that does all the stuff that you wanted, it's available. Is that of or

[00:29:31] Greg Reybold: Yeah, absolutely. I think that's a fair way to couch it, and so often in the advocacy world, they'll do exactly what you just said. Oh no, this is just an offering. Ultimately, it's the client that's going to select that. Of course, oftentimes the client is themselves because they own the insurer or they're owned by the insurer, 

 So you definitely have that as well.

But again, there are certain tools of the trade, and setting prices is one, creating networks is one, also the games they play with formularies and how they drive up list prices by

[00:30:00] demanding

30 to 40 to 50, sometimes 60 percent rebates on drugs that exclude others. It's what they do.

[00:30:09] Mike Koelzer, Host: Greg, I heard this somewhere, this isn't mine, but some of the stuff you're talking about seems to remind me of like Visa and MasterCard where they don't care so much what they're selling. They're not setting the price except for their fee. They really have more of a hands off between the stores slash manufacturer, whatever.

And the consumer they're needed. But they're rather hands off. Is that a close analogy at all?

[00:30:41] Greg Reybold: I've never thought about it, but I think it could be, they're a conduit to essentially processing, processing purchases. But they're not arbitraging the price of the product that the person's buying, 

 yes, I think that's a fair way to couch that. Different. I've never thought about it, but it does make sense. 

[00:30:59] Mike Koelzer, Host: [00:31:00] All right, so Greg, you go in there and I'm gonna ride shotgun with you as we go to Washington. It's gonna be just you and I doing this whole thing for the whole nation. And I'm like, yeah, Greg, do it! This is great. 

All right, now you're gonna come up against people that are the naysayers of this.

Who are the naysayers? I'm picturing PBM lobbyists paying tons of money to the and now you're dust.

[00:31:30] Greg Reybold: I thought I was the only one left. Now all of a sudden the folks opposing it are back. This is the style. I don't like the direction of this one. Heh heh heh heh heh heh.

[00:31:38] Mike Koelzer, Host: You're the only one fighting the good fight. You've got a, you're 

Braveheart against this whole army over there. So no, can't do that.

[00:31:47] Greg Reybold: I thought I had the pen in my hand. okay.

Heh 

[00:31:51] Mike Koelzer, Host: host. If I'm gonna make them fall down too, I need a raise on this. No, it's just our side that you're the only one doing it.

Everybody else is still there.

[00:31:59] Greg Reybold: [00:32:00] Fair enough. I got carried away. I got carried away, but it was bliss for a second to even imagine it, Mike.

Um, 

[00:32:05] Mike Koelzer, Host: right.

[00:32:06] Greg Reybold: so listen you're going to have the usual suspects, you're going to have lobbyists for, every one of the large pharmacy benefit managers, in house government affairs folks for every one of the large pharmacy benefit managers. You're going to have the same for the insurers, contract lobbyists for them, then their national associations, their national groups. As the sun rises, but what they've done a really good job of, depending on what you're looking to go after, and particularly, I'd say, post Rutledge v PCMA, at the state level, what they've done a really good job of is getting employer groups and folks to be afraid of regulation.

They think, anything you pass, the sky is going to fall, premiums are going to go up, and benefits are going to be unaffordable. But PBMs and insurers are also always looking for allies at the federal level, folks to help Throw a wrench in or raise concerns, 

So, and then of course, look, there's a lot of stakeholders beyond that, 

there is big money, Mike, in prescription drugs for, [00:33:00] almost everybody, but community pharmacists and, their community pharmacy based organizations. If you look at the fortune 10, the fortune 20, boy, a lot of them are in the drug business. there's no doubt

about it.

 It touches a lot of folks. 

And so what we see right now is there's over probably 50 bills federally dealing with pharmacy benefits managers. but very few of those are really looking to address and protect the interests of pharmacists.

And so it just goes to show, there are employer groups who want some PBM reform, but they want it at the federal level. They don't want it at the state level because they don't want to have to adhere to what they would say is a patchwork of different laws. they want be reined in certain

aspects

that impact them, not the impact pharmacists, sometimes not the impact patients, 

there are of course, patient groups. There are, national chain groups that there's any number of interests and everybody's going to want to have their say, and it's not just prescription drugs, I always say it's that one of the most fascinating things, [00:34:00] Whether it's state or federal, the number of interests and the number of issues that get brought up, if you're a congressperson at the federal level, or if you're a state rep or a state senator, depending on, your district or your committee, I mean, you can't make up the number of issues, 

you've got banking issues. #You've got I. T. issues. You've got social media issues. You've got, pecan issues. You've got farmer issues, you've got chicken farmer issues, name it number

of issues that pop up and then the number of different players who are impacted by any one issue,

it's almost limitless, 

 there are so many people that have, what I would say, voices on any one issue, but certainly in prescription drugs, and often times there are folks who They have concerns about what you're advocating for, but sometimes, there, there are people that surprise you, and there are alliances that can be made, and I think if you look, pharmacy has worked really well with patient groups, which is fantastic, because so often what's good for community pharmacy [00:35:00] turns out, hey, this is also good for the patient,

And, 

and so that's great, work with oncology groups and other physician groups oftentimes because they also see firsthand whether it's because of prior authorizations or whether it's because of steering.

They

see a lot of the games that pharmacy benefits managers play.

And a

group, that we've been working with quite a bit which I'm really pleased with, is a PBM group, believe it or not.

It's called Transparency Rx.

 It's a group of Transparent, much smaller, transparent pharmacy benefits managers who are willing to kind of stand up and say, Hey, these big PBM groups, they don't speak for us. And a lot of the things that they're saying is going to increase costs is in fact going to lower costs.

And so, what an awesome ally. And

so, community pharmacy isn't in it alone. 

But something that I am really concerned about is community pharmacies voice. Mike is not winning the day, I don't look at, hey, there's 50 plus PBM bills as a victory for community pharmacy,

 What, what are [00:36:00] those bills going to do to keep doors open, to ensure that community pharmacy is there to care for their patients today, next month and for years and years to come,

[00:36:11] Mike Koelzer, Host: We talked about the heart that's in the business of community pharmacists. coming to mind is like canary in a coal mine, but it's almost like you don't have that in pharmacy because even when our reimbursement goes down.

And people are actually getting paid below cost. The service is there still, basically. So it almost from the outside, it looks like independent pharmacy or community pharmacy is doing a great job. But then all of a sudden the doors lock the next day. 

Just a cliff because I think of pharmacist, heart and giving, and they don't slow down.

They give and give until they figuratively die the next day drop off the cliff. It's like there's not really a canary out there. And I think that 

[00:36:53] Greg Reybold: Wow.

[00:36:54] Mike Koelzer, Host: are gonna be hurt, 

[00:36:56] Greg Reybold: I couldn't agree with you more that communities have been hurt. I've [00:37:00] never really thought about it the way you just articulated it, but it's really interesting, because if you're a patient walking into a pharmacy, you're getting the same level of care, 

 Pharmacists are killing themselves in there. They're working hard. They're, getting slaughtered on the reimbursement side, but outwardly facing. It's like, what is it you always hear about the swan, you can't see under the water all

[00:37:19] Greg Reybold: the work that's being done, so I think you're right.

I don't think most patients probably have a clue the jeopardy that a lot of these community pharmacists, where they trade and where they go for care, the jeopardy that those stores are in. And then one day, you're right, right? there's a sign

On the front door that,

It's shuttered.

[00:37:36] Mike Koelzer, Host: Greg, I think I heard you on another show . You were saying that, think your quote was something like this. Remember, none of these laws affect the reimbursement.

[00:37:49] Greg Reybold: None of them are going to pay pharmacists fairly and transparently, period, 

and That's a pretty big deal, and that's really something that should be front and center [00:38:00] to any true PBM reform. And again, it's

Just that it's going to help community pharmacists, 

going to help the system. It's going to help the patients. It's going to help the taxpayers.

Because while PBMs are setting those drug prices and arbitraging those drug prices, It's all made up and it's all rigged and

something I don't I don't remember if you and I have talked about this before, but pharmacy obviously was hammering DIR fees forever, for years and years from 2014 up until this year.

And certainly pharmacy address the issues from the perspective of, Hey, how do you run a business when we're getting this money retroactively recouped,

 And certainly it harmed pharmacy, but it also harmed patients. Because so much of what DAR fees were about was denying patients the benefit of the, quote, pharmacy discounts at the point of sale.

And so, if the PBM knows we're going to pay the pharmacy 70 at the end of the day, but they charge the patient a deductible or cost share based on the 100, They're subsidizing that plan. They're subsidizing their profits that way. And

so, [00:39:00] the fix, the quote, DIR fix, is going to now ensure hopefully that patients are not being overcharged, that their cost shares at the point of sale are based on the lowest possible reimbursement, but the pharmacist reimbursement still hasn't been addressed,

Right.

And I think what we're seeing now is arguably, it's worse.

[00:39:20] Mike Koelzer, Host: Greg, what would wording look like that hits on the price? I know some Medicaid's, say they're going to this plus 11, 12, something like 

[00:39:32] Greg Reybold: 

[00:39:32] Mike Koelzer, Host: know that some people talk about, not having something below cost and, NADAC this and that. 

in your best guess, what would pricing thing look like?

 How would you word that? And how would that actually have teeth to it that can't be moved around? Like you see the PBMs doing stuff now?

[00:39:53] Greg Reybold: Well, not easily, There's not necessarily a panacea, but I'm a big believer in, if you move to an [00:40:00] index based model, that's a great place to start, and so if you say that, reimbursement can't be below, or maybe even above, but can't be below the National Average Drug Acquisition Cost,

plus a dispensing fee, and you can have a set dispensing fee, you can tie it to state surveys

via CMS Medicaid program.

There's different ways to do it, but here's what I would say. And it doesn't have to be NADAC. There could be something ultimately better out

there. Alabama average acquisition cost

Is a really robust database. And we find there's a lot of drugs that are on the AAC that aren't even necessarily on NADAC. But if you move to an index based model so that the price of the drug is the same as to the pharmacy, as to the patient, as to the plan, as to the taxpayer, and that price isn't getting arbitraged. It's a fantastic place to start plus a fair dispensing fee, and then obviously you have to say that there can't be any Point of sale or retroactive adjustments or recoupments that would in any way, shape or [00:41:00] form impact that reimbursement to a pharmacy.

But I think that's a great place to start. And, once the system is no longer broken and everybody's operating off of the same drug price, well then, there's always work to do.

Maybe NADAC can be strengthened. Maybe

that can be made better. And there are some bills that look to do that. Maybe it's the dispensing fee. There's work to be done on increasing the dispensing fee,

or

maybe there's NADAC plus dispensing fee plus some other percentage, and so there's, there's different ways to do it. But as long as we're sitting at a table where the PBM sets the price, we've lost the game. 

[00:41:37] Mike Koelzer, Host: is there any categories in business that have done that? That set prices like pharmacy would in 

[00:41:47] Greg Reybold: well, I guess I'd push back on that. This is setting prices, what I would say is this is market based pricing.

This is ensuring that the index is going to reflect the market.

And what I would arguemost industries prices [00:42:00] reflect the market.

Very rarely is there an industry where you have a player like the PBM who's manipulating the price at every level. And again, there are circumstances when they're at their best, and when I say at their best, I mean their worst. Where the same drug, on the same day, and the most recent 3 axis report identifies it, same drug, same day, five different prices, 

Seven different prices, at the same pharmacy,

for the same drug,

on the same day, by the same PBM. It's literally made up. And so we are in what I would argue is really a rigged market. It is not a free market. It's not that the actual market prices are reflecting what patients are paying and what pharmacies are being reimbursed. And so by moving to an index based pricing, ultimately, what we're trying to get to is getting the price of the drug. to reflect what the actual market price is versus a made up price that's behind some trade secretive methodology that [00:43:00] nobody can figure out. And again, there are times where the pharmacy's reimbursed. I mean, let's just walk through it. This will be off the top of my head here, but think about it, 

there, there are times where a PBM may mandate a brand name drug, there's a Generic that's available for 100 less, for 200 less,

but they mandate that brand. The patient is in the deductible phase. So let's say, let's say it's a 100 drug. The brand name drug, let's say they could have got a generic for 30. The patient pays the a hundred dollars for the brand name drug. The PBM comes nothing out of pocket. Let's say the PBM claw back 20 from the pharmacy, and then the PBM gets a 30% from the drug manufacturer. The PBM is paid out nothing. PBM gets $30 from the drug maker. The PBM gets $20 from the pharmacy and the patient overpaid they overpaid by 30 because they didn't get the benefit of the rebate, and then they could have gotten a cheaper generic on top of it, they're not paying anything out of pocket, and they have rigged the drug [00:44:00] price so they get paid from the pharmacy, from the patient, as well as from the drug manufacturer.

Right, yeah, they didn't touch it, they didn't make it, they adjudicated a claim, and they overcharged everybody.

[00:44:17] Mike Koelzer, Host: Greg, I'm going to push back still. I like the index thing. It's not a price fixing or whatever. It's just like everybody's got to play by these rules. Is there a business sector that does this? could you argue that, no it doesn't, but the PBMs are worse than any business sector and so this is going to be the first one?

[00:44:37] Greg Reybold: This is off the cuff, but interest rates, 

[00:44:41] Mike Koelzer, Host: was just going to mention that, because I got a 

loan the other day, and it was home equity, I was like, alright, what is it going to be off of prime? Which is eight and 

[00:44:48] Greg Reybold: Yeah. 

[00:44:48] Mike Koelzer, Host: now. Is it going to be a little bit above it, a little bit below it? But everybody's working off of that.

And everybody knows there's got to be money built into the loans or else the banks aren't going to be there 

[00:44:58] Greg Reybold: yeah, for sure. And then of course, there are [00:45:00] commodities and you've got markets that,

that track them and you've got index funds where

billions of dollars are traded day in, day out so I think there's lots of precedent for indexes.

[00:45:09] Mike Koelzer, Host: And everybody can see it.

[00:45:11] Greg Reybold: Everybody can see it, and that's absolutely right. So

that's what I would say. And again, there are things that make pharmacy unique

To be sure. But the other thing I would say is that Pharmacy itself is where the precedent is, because this is working.

And obviously, you're deep in the pharmacy business and you have these conversations a lot yourself, but in Medicaid fee for service, Most states are paying based off of NADAC

plus a dispensing fee. Is it perfect? I would say not, and there are issues, certainly. But that's where the least amount of problems

are, right? The state

isn't overpaying for the drugs. The pharmacies, by and large, are getting paid somewhat fairly.

so, the index model is not, non existent, it's not like something out of nothing, 

 this is a model. was created, and I'll probably get the year wrong [00:46:00] here, somewhere between 2010 and 2012 because there were so many games with drug pricing in Medicaid fee for service programs.

[00:46:06] Mike Koelzer, Host: hm.

[00:46:06] Greg Reybold: so, it's working,

[00:46:07] Mike Koelzer, Host: 

[00:46:07] Greg Reybold: I very rarely hear complaints coming from Medicaid Fee for service.

Now, Medicaid Advantage Care very different, because they get paid via capitated model,

PBMs, and

they do whatever

they want with the drug price. But

Off a transparent index has proven to work far more efficiently and been far fairer for all parties involved in pharmacy already

than the current

MAC model, if you will. 

[00:46:35] Mike Koelzer, Host: Greg, if you had to take both sides of a debate and, and yes, there is an opposing side on this one. I'm telling you that right up front,

[00:46:44] Greg Reybold: Yeah. Let's say that you've got somebody who says Nothing is going to change. I've heard this forever, the national associations and this and that, and someone else says, there's movement. There [00:47:00] is movement. What bullet points would the naysayer have prove movement and what?

[00:47:08] Mike Koelzer, Host: bullet points would the pro association have to at least put metrics on some unit. One metric might be, well, there's 55 laws in the legislation right now, and years ago, there was only 10, but then this side might say years ago, there was PBMs and they split the market at 4 percent a piece and now the top three have 80 or something. What metrics could you put on both side if you had to make that argument both ways?

[00:47:43] Greg Reybold: Yeah, so, which one do you want me to start with?

[00:47:47] Mike Koelzer, Host: Well, let's start with the negative and let's say how things have the same or gotten worse through the years. Yeah. 

[00:47:55] Greg Reybold: The argument would be, Pharmacy's been at this a [00:48:00] long time, right, and Mike, behind me, I don't think you can see it, but on my bookcase, there's a VHS cassette that says PBMs 101. The VHS cassette that community pharmacists were using to inform their congresspeople about PBMs back when VHS cassette was it, 

that's how folks

watched things. Um, but for all of that, for all of that advocacy and for all of those efforts, The payment model hasn't been addressed and it hasn't been fixed. And, as a matter of fact, there's really never been a, even a bill introduced that would truly address the reimbursement model for pharmacy at the federal level.

And, and in most states as well, states have passed MAC pricing laws. There have been MAC laws introduced at the federal level as well. But at the end of the day, pharmacy reimbursement remains And it's a problem that gets worse and worse, [00:49:00] not better and better after all of those years of advocacy.

 When

I have conversations with pharmacists who are really frustrated, I would say that's what I hear the most.

 Now, the flip side and I would say this is the side that I believe someday history will look back on this war that I would say this political war between community pharmacy and the biggest companies on earth, these pharmacy benefit managers. And will tell an interesting tale because community pharmacists are main street businesses

And. Here they are, where so many other main street businesses have disappeared, 

go find a corner hardware store, go find a video store while we're

talking about VHS cassettes,

right? 

Pharmacists are here and they're caring for their patients and they're innovating and they're widely recognized as being central to health care in this country in many ways.

Metropolitan areas as well as rural areas. And what I would say is I would be hard pressed. I can certainly tell you in [00:50:00] Georgia, but nationwide, I would be hard pressed to find a group at the state level who have had the legislative success that pharmacy has had. I can't think of another group that frankly even comes close against, not nobody. And I always say this, Mike, it's hard to pass any bill, it's hard to pass an uncontroversial bill. You pass a bill that says it's legal to pet puppies,

 And it's hard to get that bill passed. And pharmacists time and time again across the country have been able to pass massive legislation in the last five, six years against Tremendous odds, 

in most states, you have maybe a state pharmacy association lobbyist, maybe a little help from a buying group or

two,

And, maybe a patient group, and you're up against 40, 50 contract lobbyists on the other side, but community pharmacy has won.

And that's that, that's a big deal, 

have

we fixed reimbursement? No, not necessarily. Although you've seen pockets where things have been really different, west [00:51:00] Virginia has the NADAC plus dispensing fee.

Tennessee has something similar. Ohio's done a lot in their Medicaid program. In Georgia, as a result of advocacy. Of the Georgia Pharmacy Association and APCI, proud to say community pharmacists and Medicaid managed care get paid 1063 dispensing fee for every claim, 

so it went from eight cents, 13 cents to 1063

As a direct result of community pharmacy advocacy. And so across the country, community pharmacy has won. Some major victories, whether it's copay clawbacks, whether it's transaction fees, whether it's MAC laws, which largely have failed, and I've

been a part of writing some of those, not ashamed say

a lot of those have failed and in certain cases, steering and reimbursement as well.

So there's a lot of wins and I'll tell you something else. There's not a lot of industries that can boast taking an issue all the way up to the U. S. Supreme Court. And getting a victory there too, because that's pretty improbable in and of itself.

And now you've got an issue at the federal level. And I credit community [00:52:00] pharmacy for the bulk of this, 

but there is an environment where PBMs are on the menu, there's over 50 bills that are looking to address PBMs. And so there is, there, pharmacists are behind the counter, they're getting beat up. This January, I would say, sounds like it's probably the worst January pharmacies maybe ever had.

And, and I'm not the one taking those punches behind the counter but what I

can tell you is if, with a little bit of perspective and when there's time to look up and look,

there are a lot of really amazing things going on

 This is a very unique time and I think pharmacy will find ways to keep winning, but again, I am worried that in this climate where you have 50 plus bills dealing with PBMs, there isn't a community pharmacy bill out there right now. That's going to ensure that those stores stay open so that they can continue caring for their patients wherever those patients in those stores may be .

[00:52:50] Mike Koelzer, Host: And that concern basically is a dollar sign because it seems like we have ability [00:53:00] to care being allowed to serve the patient, but at what you'd consider a fair price. And that's what you're alluding to there that there's nothing there right now That's going to keep those open.

[00:53:09] Greg Reybold: Yeah, that's right. But what I would say is, paying pharmacists fairly isn't synonymous with increasing costs to the system.

 Because it's not. Because we've seen when states have carved out prescription drug benefits from Medicaid managed care companies

and moved to fee for service, which is NADAC plus a dispensing fee based, what we see is millions and millions, sometimes hundreds of millions of dollars in savings,

So you can pay pharmacists fairly

and still have savings to the system. Sometimes massive savings to the

system and

massive savings to patients. And so I think it's really important, I hate to see pharmacists get self-conscious to talk about reimbursement. Because it's a fair conversation.

It's not just about reimbursement,

 it's about a lot of things,

but reimbursement is a really important part of it. But you can pay pharmacists fairly without increasing cost to the [00:54:00] system. And I think that's an important point that has to be drawn out anytime you're having these conversations.

[00:54:05] Mike Koelzer, Host: And Greg, you and I just touched on it earlier we talked about the brand name, which was 100 versus 30. And we talked about the manufacturer and the patient and the pharmacy and the person that made the bulk of this profit didn't touch the medicine, didn't touch the bottle being the PBM.

[00:54:23] Greg Reybold: Yep. 

[00:54:25] Mike Koelzer, Host: decrease that, put some back in the profession and pay the pharmacist more. And everybody's going to be happy maybe at, having. 70 bucks in the system versus a hundred dollars in the system. 

[00:54:41] Greg Reybold: Yeah. 

[00:54:41] Mike Koelzer, Host: like that. A lot can happen with shortening the pockets of the PBMs a little bit.

[00:54:47] Greg Reybold: Yeah. Yeah. Absolutely. they are in the middle and they are feeding off of everybody. And when you cut those practices out, plenty of room to pay pharmacists fairly and still save patients, taxpayers and employers money.

 [00:55:00] 

[00:55:00] Mike Koelzer, Host: Well, Greg, golly, nice to see you again. It's always fun to talk about our war against the other side and I'm sorry I didn't let you know that the other side still had all their weapons pointed at us and you were the only, you're the only guy. on our side But now you get to go to bed tonight just being thankful that it's not just you.

[00:55:22] Greg Reybold: Hey, yeah, that's right.

[00:55:24] Mike Koelzer, Host: a bright side.

[00:55:25] Greg Reybold: Look, I got carried away with the analogy, but it's always a pleasure, talking with you and love to talk about this stuff and appreciate everything that you do and the spotlight that you shine on these issues. 

And if I could leave folks with one thing, it's, this is not a time to let the foot off the gas. Again, right there with you. There are times where I feel cynical and feel like we're Don Quixote chasing windmills. But this is the time to apply pressure, pressure busts pipes.

And you got over 50 bills, things are hot at the state level, and this is a time for all community pharmacists to get involved and push,

 Push, push, because , [00:56:00] there's real chances to get meaningful reform,

and I enjoy talking about them with you. 

you.

[00:56:07] Mike Koelzer, Host: you, carving out time for us, thanks again.

[00:56:10] Greg Reybold: Thank you. 

You've been listening to the Business of Pharmacy podcast with me, your host, Mike Kelser. Please subscribe for all future episodes.