The Future of Pharmacy Pricing | Kyle McCormick, PharmD, Blueberry Pharmacy

(Speech to Text)

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

Kyle McCormick, PharmD: My name's Kyle McCormick and I opened Blueberry Pharmacy back in March of 2020. And we're a little different than any other pharmacy in that we are cost plus insurance 

and so, coming here today to kind of do a check-in since we talked, a little over a year ago now. And, a lot of learning since then. So kind of just checking in on the model and the cost plus movement and, where everything's.

Mike Koelzer, Host: Kyle, when I see your online with LinkedIn and anytime Cuban is mentioned, I feel like it's got a little bit of a screw into your like, Hey, this is good, but don't forget about the rest of us that are doing it or maybe even doing it first. Do you get a little bit of screw into that?

it's, yeah, and it's, my wife is constantly, I was looking on my cell phone the other night and she's like, what is she like, what are you looking at? I was like, da. And comes over she's like, it's Cuban on the screen. And she's like, I've, I told you, you gotta let it go. You gotta let it go. It is just really hard to like to let it go because if nobody, if people, listeners aren't aware, back in March of 2021, we were under a year in business. We were doing okay. but very young and Mark Cuban's cost plus drug company launched. They were. Launched with the announcement that they would be manufacturing drugs.

Kyle McCormick, PharmD: They would be selling to pharmacies across the country, and they'd be doing so in a costless manner. So instead of marking things with AWPs that are made up and selling to wholesalers that would add their own markup, they would just sell directly to pharmacies at cost plus 15%. so the manufacturing cost plus 15%.

So how that all started, or my conversation with everybody there was Mark Cuban tweeted out esol, I don't know what they were doing, 20 bucks a pill, much cheaper than the current price. So I tweeted at him and said that that's nice and all, but patients at blueberry can already get it for under $15 a pill.

I think two pills for basically 20 bucks or something like that. So, he didn't respond to the tweet at all, but quickly got a message on LinkedIn from the CEO, Alex Osky saying,mark forwarded me your tweets. Can we talk, how is this possible? Like, we're seeing a NADAC of $70, a whack of $80.

Like how are you buying it that cheap? Like, that's different than anything we see. and so they were a drug manufacturing company. They weren't a pharmacy, they weren't a direct competitor. If anything, they could be a future partner. So I had no issue with talking to 'em. So I told 'em, oh, our whole business model, and said, the pricing problem isn't in manufacturing.

I can already buy a bottle of two pills of ESOL for five bucks. Like you manufacturing it and selling it at 20 is not a great deal.

And so, fast forward and then a year later they launched theirs. 

which was like, the knife in like, oh shoot, like I probably shouldn't have talked to them.

like they never mentioned that they had plans to launch a pharmacy, a direct competitor. They only talked about manufacturing. And so that's what started the spat back and forth of like, they continued to just say that this is always what they were doing, that this is what they like.

They didn't lie to me when they talked. So yeah, it definitely hurts. whenever I see that. , it definitely brought a good presence and a good brand to, like, a lot of conversation has started because of that.

So I can't really complain about that. But my biggest fear is that because they are, they're doing everything but being the pharmacy. So what I mean by that is they claim to eliminate the middleman, but literally they're the wholesaler, the relabel, the supplier, like, They're not the manufacturer yet and they're not the pharmacy cuz True.

Bill's the pharmacy. So they're only middlemen at this point.

Mike Koelzer, Host: We had Alex on the show and this was a couple years ago, and I think that they stressed the manufacturing. They were gonna start off though, buying it from somebody. And businesses certainly have a right and even a requirement to pivot, Maybe you wanna know that before you share any secrets and so on.

But they have a right to pivot. But yes, they have pivoted away from the manufacturing idea and they're not their own pharmacy. So the two things that they've kind of have talked about so far, both the manufacturing, they're not doing and the pharmacy, they don't hide the fact that they're not a pharmacy, but I don't think it shouts that, most people, when they think of it, they think you're probably getting it from cost plus unless you go to the website and things like that.

Kyle McCormick, PharmD: Yeah. Well it just says Powered by true pills. So unless you read the F FAQ, you don't know that even that true pills like 

the 

Mike Koelzer, Host: That could just be an app, right?

Kyle McCormick, PharmD: right, , right. So it's not very transparent at all. I mean, even the way they do shipping costs is like I, up until like a couple months ago, I thought you could put anything into your basket and have a $5 shipping cost because it's like if a shipping cost [00:05:00] added at checkout, but I didn't realize it's actually $5 per medication.

So like if you're actually getting five pills, your shipping costs are actually $25, which isn't transparent cost plus at all. It's like

that's just another way to add on 

Mike Koelzer, Host: Look at the bright side, it is not $5 per capsule.

Kyle McCormick, PharmD: right? Yeah.

My fear is that it's not true Class Plus. And so whenever they launch their GoodRx competitor discount card, that can be used at pharmacies across the country, which apparently they're launching with, independent pharmacy partners, that becomes much less and less cost plus and more and more just the same.

Like there's no difference at that point it's just got cost plus on the card. But the philosophy and how things are actually priced are no longer cost plus at that point.

Mike Koelzer, Host: Yours is coming more from the bottom up and adding, but somebody else who's just selling inexpensive medicine is probably going to not think about the cost. They're gonna look at the going market rate and then come down from that enough to be competitive. But they're not coming up from the bottom.

I, I wanna give them credit cuz supposedly they are actually pricing it off of their acquisition costs. So True Pills acquisition cost and then doing a markup to that. So what are you saying were the differences 

Kyle McCormick, PharmD: So the discount card is, that's just gonna be the price. So then at that point, all the cost plus prices are based on true pills acquisition cost.

Right. so some things they might be buying lower than 

Mike Koelzer, Host: Oh, I see. I see. It's still an acquisition, but it's based on somebody else.

Kyle McCormick, PharmD: Right? Right. So, so it's like no different than like CVS Caremark setting a Mac

Mike Koelzer, Host: Yeah. Right?

Kyle McCormick, PharmD: it's based on somebody else's price. Like this is independence. Yet again, just agreeing to, have somebody else be a middle man, have somebody else be a price setter.

And yes, it is supposedly a more transparent way, but I've already heard online talk about the opportunity for some bread in the cost plus pricing with Mark Cuban because, true Pill offers maybe abiraterone at $183 a bottle. , and then it is like, the example I saw was like, oh, but I can buy that, from x wholesaler for like 90 bucks a bottle.

So even though I'm only supposed to be making cost plus eight through this discount card, because I can arbitrage that with the way I buy, but my counter is like one that's not cost plus, because cost plus should be based on that specific pharmacies

acquisition cost. 

Mike Koelzer, Host: makes sense.

Kyle McCormick, PharmD: And two, two, like those will come down.

So over time, every drug you dispense is at basically a $7 or less markup, margin, which may not, which may be good for some pharmacies, but I know a lot of pharmacies, a lot of geographies where $7 per prescription just doesn't cover costs. 

Mike Koelzer, Host: If you're gonna come out and do it and base yourself on. reality and upfront and all that stuff. You don't want to start padding, I mean, I can do it. I'm connected to the mafia, so I'm all tied into the PBM prices and all that kind of stuff, so I can do whatever I want to.

But if you're stressing,clarity and transparency and so on, you can't start saying, yeah, but that's seven true. But you know, when we do need 12 or whatever, so we're making it up here, and all that kind of stuff. it's like, if you're making up on the prescriptions, then you're kind of getting away from your goal of,

Kyle McCormick, PharmD: moving away.

Mike Koelzer, Host: and that kind of

Kyle McCormick, PharmD: you're getting away from your goal of moving away from PBMs to having a more transparent pbm, which is fine and all, but, yeah, no, so yeah, it's, to your question of does it dig me? Yes it does. cuz the more I see of it, the less it's, the less its original form, like you said, they're, the more, they're getting away from being the manufacturer.

The more they're getting away from being the ultimate pharmacy, the less of a true cost plus model

it is, which just like really frustrates me.

Mike Koelzer, Host: seems to me you'll have to use that almost as a springboard to say, you all know this. And so this being, a big organization like that, marks Cuban stuff that speaks to people. And then you can put the twist on it maybe, you know, so you bring that whole group along and then maybe you can put the twist on it to say, here's why we're different still,

Kyle McCormick, PharmD: Right. My biggest fear, which I know is not really a fear because we're first to market in the Pittsburgh area of First to Market, Pennsylvania. . So we already have a brand of presence, but kind of what's frustrating is because of the large voice that Cuban has, any independent that partners with them to do the discount card, all of our partners are like, wait, I can do this at cost plus here.

Now. It's like, well, yeah, but it's not cost plus, but it basically then makes me sound like, just a nuance, like a grammar, Like, because they don't care about how it is more affordable really at the end of the day.

Mike Koelzer, Host: It waters down that term and the term, then starts to not mean anything. Right.

Kyle McCormick, PharmD: correct? Yes, exactly. Yeah.

Mike Koelzer, Host: My wife's sister when we were dating, worked at Dairy Queen and they were not allowed to call the ice cream ice. , [00:10:00] it was Dairy Queen , so, so, if you were making a cone and it tipped over or something, when you're working back there, you say, oh, damn it, I dropped the Dairy Queen on the floor.

it was just like, that was their own name, but it kind of was ice cream. And then it kind of, it's like, it was like a name game instead of being, it's kind of the opposite of what we're talking about, 

Kyle McCormick, PharmD: you're exactly right. I imagine it's how the Allied Milk producers feel about soy milk

Mike Koelzer, Host: Yeah, exactly. But that's it. You can't call it Mel cuz then. Exactly.

Kyle McCormick, PharmD: right. It's like, you shouldn't be allowed to call this cost plus, because it's not even a pharmacy. But we have grown tremendously since Mark Cuban has launched because he brought such an awareness to the model, credibility to the model.

It's like, oh, well, mark Cuban. Oh, is that the same thing Mark's Cuban's doing? Well, yeah, actually we were doing it first, and they kind of learned about it through us. Like, so it gives us a lot of credibility. So I can't complain whatsoever, but it still gets to me,

Mike Koelzer, Host: When I look at your stuff and you can break it down on your nice website and so on. That's one thing when I hear a bigger company though, talking about cost and this and that, alls I'm thinking about is the invoice on a car, suggested invoice 

once the car company says We're selling below invoice, it's like, no, you're not. And now invoice doesn't mean anything to me, so when the big boys start talking about, 'cause we're selling below this and everything, especially when they don't seem to be fully out there leading with transparency, it kind of ruins a whole name for me.

Mike Koelzer, Host: So someone like you that can say, Let me break that down. Let me tell you what we mean by this.

Kyle McCormick, PharmD: Yeah. Yeah. And I think the other big thing that as pharmacists that we can, we will always have the edge over is,the service level component. And that's what really hits home. We've had patients transfer from Mark Cuban to us. We've never, as far as I know, we've never sent a script to Mark Cuban, but I guess they don't even call for transfers.

And we've also recently, just this past week we had a provider call and say, Hey, we used to be sending patients to Mark Cuban, but we've had a couple people have really good experiences with you all. And, so we're just, we're now talking a lot about blueberry pharmacy to our patients instead of Mark Cuban's pharmacy.

And so that was really cool. And it was nothing to do with price, cuz I'm sure a couple of our drugs are maybe more expensive. It has all to do with being able to call and talk to the actual human within like a single ring of the phone. It has everything to do with, like, Counseling a patient fully on a medication before they get it versus just, label, count, label, stick ship, , like all that stuff.

So, so it has all to do with the service and not at all with the cost, which is kind of, I know that we talked a lot about the philosophy last time, but that's more and more the philosophy is that you get to set in the cost plus world, you get to set the cost that covers your service

 And so whatever level of service that is, if it's purely a fulfillment model where you only need $3 to have a pharmacist check it and have automation count it, then cool.

Kyle McCormick, PharmD: But if it's also a higher level service where you're doing full counseling and coordination of medications and actually checking for drug interactions, actually getting a full medication list and you need to charge $10 for a prescription to do that, or 15 or whatever, you can do that and patients start to notice and patients will pay for that extra level of service.

Now we consider our cost to be, we do a 5% markup on the medication, on, on our actual invoice costs, like our actual acquisition costs, not like the rebate invoice cost. cuz we don't deal with rebates. But so yeah, you get to set that percent cuz I think that's

really 

important because initially it was like, oh, we'll just do cost plus 10, like forget about percent. But then I realized if somebody actually needs an expensive medication, say a hundred dollars medication, 3.5% is eaten up in credit card fees, so Right, right, right away if you don't have some kind of margin built into that for with a percent mark.

you're eating those fees in your plus margin, which shouldn't be

happening. 

Mike Koelzer, Host: The plus part seems like the pharmacy service. The cost seems more like still the bottle and that kind of stuff. 

Kyle McCormick, PharmD: I don't know where I've heard it. but I've heard and continue to make the analogy like, I didn't come up with this, but cost plus is just mechanics, parts plus labor, plus is our labor parts is the cost. so maybe we should call it, pharmacy parts plus labor

maybe that would be a little bit more Oh, I get it now. but people tend to get it. But yeah, it's, a lot of the concept is that's our labor, that's our, whether it's counseling patients, filling the prescription, whatever that is, that's the labor.

Mike Koelzer, Host: With Mark Cuban's place, they had asked for independence and were interested in doing something along with them. I bailed out for now though, when I had to call them and talk about it. In other words, I put my name on this and then they said, well, give us a call and we'll talk.

And it's like, I'm not good with people. I hate people. You [00:15:00] know that by now, Kyle and

Kyle McCormick, PharmD: You hate him so much that you talk to him for an hour

at a time. 

I'm in control of this. Yes.

Mike Koelzer, Host: I don't want to pick on them. I'm just saying more in general now, like when people make you give your email address and all that kind of stuff.

Or they'll say, call for a price. that kind of thing. I'm always saying, if this is so complicated that you can't come across to me on a website and explain it to me, or even with a video on a website, explain it to me. Or if it doesn't jump out to me that quickly, the value of it. I don't want to call and 

talk to somebody that's just across the board.

I just don't like doing that.

 Now, if it's a real specific thing, like I have a question, but not if it's like, call me so I can explain this business model. It's like, ah, that's too tough. Then if you have to explain it to me and it can't be on a website, then no. Thanks for now.

Kyle McCormick, PharmD: and it might be because the business model starts to sound a lot like GoodRx

Mike Koelzer, Host: unless you really dig down and explain it to somebody.

Kyle McCormick, PharmD: Yeah. Yeah. Yeah. So, yeah. yeah, I'm not a fan of it.

Mike Koelzer, Host: Yeah. Hey, Kyle, so I love your guys marketing online. We already talked about the blueberry not really being the blueberry color and all that. We talked about that last time. But last night I watched, um, uh, true e Hollywood on YouTube and it's so old that it comes on my screen as a square.

 It's not 16 by nine. It's a square on my screen, and they're talking about one of my favorite shows, Gilligan's Island. Were you at the age where you could come home after school and watch Gilligan's Island every day?

Kyle McCormick, PharmD: it's, I've watched it like a handful of times, but no. Oprah was on whenever I got home from

school. 

Mike Koelzer, Host: Is that what you said?

Kyle McCormick, PharmD: Oprah. Yeah. Yeah. Yeah.

Mike Koelzer, Host: Oh, you're missing out. Anyways, you know the theme song right?

Kyle McCormick, PharmD: Yes. Yeah,

Mike Koelzer, Host: As I'm going to bed last night and thinking about talking to you today? I thought, you have a little story to tell. I'm thinking Kyle should come up with a Gilligan's Island theme song for the 

pharmacy.that's pretty brilliant. Yeah.

sit right back and you'll hear a tale about Kyle and his cost plus drug, and just go off on that.

Kyle McCormick, PharmD: I don't know if you played around with chat g p T at all,

but, um, yeah. So we've incorporated that into some of our marketing, some of our branding. In that one, related to what you just described, one of our band favorites last year before ai, we had gotten a shipment of covid tests. This was, last year as in 2021, Christmas 2021.

We got a shipment of covid tests on Christmas Eve. . And so I made a night before Christmas 

Kyle McCormick, PharmD: poem that basically said, Hey, limit one per like, it was like a full on poem that like one per customer, we have 'em don't pass trust with phone calls. That kind of

stuff. Like we'll sell out when we sell out. I like it, and so that was a favorite and people actually, so it was on our voicemail, like recording prior to getting sent to the pharmacy.

So that way people didn't like to ask us. We still got a lot of people that stayed on to say, "I loved your poem." We actually got a lot of people that then called, like, Hey, you need to call this pharmacy just to hear this poem. so it became like a really big thing. And so then again this year I was like, dang, that took a lot of time to write that poem.

Kyle McCormick, PharmD: And so, I was like, I'm just gonna have a G P T right, the night before Christmas poem. And so, yeah, so we, it's now an annual thing where the night before Christmas, we put a recording on our, like basically the day before Christmas, the last day that the pharmacy's open. We have a recording that patients can listen to, and people call in and say, I love your poem.

They're like, send us an email. Things like that. But related to that song, I should almost just say to chat g p t in, in the style of Gilligan's Island, the theme song, write a, write a jingle for, blueberry pharmacy, cost plus Model

I'll let you know what comes up.

But yes to the branding question.

Mike Koelzer, Host: let me know. gimme your phone number.

Kyle McCormick, PharmD: Yeah.

 I'll credit you, Mike Kelzer, co-author,

Mike Koelzer, Host: We were talking about invoicing here. Last week I was reading something and this one company, I think they were in Michigan, they got charged for price inflation for covid tests.

And they're charging like 80 bucks a test or something like that. And I'm thinking, I don't have a ton of thought on price inflation, but I thought, well, maybe they bought it for hire, maybe they bought it from someone for 40 or 50 or 60 and they were doubling their price.

So it ends. I was sort of right. But the reason they got in trouble is because they got the invoice from another pharmacy, and let's say the invoice was $40 per, they priced it at 80. The problem is the guy owned both pharmacies, so he made up an invoice from the one selling it to his other pharmacy for 40, and it was 80.

And so theFDA or whatever didn't like [00:20:00] that much. And that's just another story of like, you can show me your cost, it's your cost plus, but if you're buying it from the wholesaler that you own, or something like that, it can get pretty wonky.

Kyle McCormick, PharmD: Yeah. I don't understand price gouging, price inflation really that well, I'm in Pennsylvania, the attorney general cracked down on some retailers around the price of masks and hand sanitizer and things like that, that they were charging early on in the pandemic.

And it's like, hey, like bugging us, we are buying these masks at. Regular old blue surgical masks at like a dollar a piece. So charging $3- $2 for a mask is not unreasonable. It may seem ridiculous, but it's a pandemic we're talking about. And meanwhile, like on Amazon, they were just as expensive, but the Attorney General can't crack down on the big Amazon.

 It got me thinking like, oh, there's a lot of talk about Martin Ley price inflation, but every time CVS bills through an Imatinib, their list prices $15,000 on a drug that only costs them invoice 26 or something like that. Like, how's one thing wrong? during a pandemic where the prices are actually inflated versus like every time that Imatinib script is filled at CVS specialty,their usual and customary their list prices.

thousands of percents higher than what they actually

Mike Koelzer, Host: You know that with independent pharmacies, I mean the auditors. Either they wanna make a name for themselves or they want the money, but you know, they pick on independence.

I got, our governor in Michigan here, going after people during the pandemic, some guy frying eggs in the morning, for his people in some podunk little town, and they're on that guy for this or that, And here the whole time, there's all this huge companies, all the problems in life you have with these monster companies, and they're picking on some guy just to show they can do it, and throw their weight around and all that kind of stuff.

And it's like, fine, but there's bigger fish to fry.

Kyle McCormick, PharmD: Right. Exactly. Yeah. Yeah. Speaking of bigger fisheries, one of the biggest things in our world that I was excited about was the GoodRx FTC fine yesterday. I don't know if

Mike Koelzer, Host: I saw that right before going to bed, but it was only like, it was only like one and a 

Kyle McCormick, PharmD: 1 45 

Mike Koelzer, Host: 1.5 million.

Kyle McCormick, PharmD: I think they brought in like 800 million of revenue last year. And so it's like less than a day's revenue

Mike Koelzer, Host: As I remember the article now, they were showing that they were selling information back to the big chain pharmacies of who looked up what medicine and so on. So then you could send Mrs. Smith a special note about this or that because GoodRx,revealed, which was supposed to be private, that Mrs.

Smith was on this kind of medicine kind of thing.

Kyle McCormick, PharmD: Correct, yeah. They're basically using cookies and things like that, selling. The data to like meta and Google,for, tracking and whatnot like that. using their cookies to search for ex-drug or purchase ex-drug through their telehealth platform, things like that would in theory be HIPAA protected.

But I think a good access claim is that they're not hipaa, really HIPAA might not apply to them since they're not insured. They don't deal with insurance and things like that. So I guess they also have a disclaimer, but yeah, I didn't read into it too much, but, it finally was like, oh, they're finally frying the big fish

It's very minorly. Like that's a very slap on wrist. But like that's, that was a step in the right direction. I saw it from the ftc, which was pretty exciting.

Mike Koelzer, Host: As pharmacists we're always told, subtly to tell our customers that if you use discount cards, they're gonna sell your information and this and that. I had no idea now if that was true. I just thought it was a good line.

 I didn't use it a lot, but I thought it was a good line to tell people. So when it actually happens, you're like, whoa.I knew it was there, but I kind of thought we made it up.

Kyle McCormick, PharmD: Right, right. Yeah, no, I think there was like, I had read an article in the past about how Good Exo actually came out and said, Hey, we did do that, but we're no longer doing that. So I'm curious what timeframe this F FTC thing was about. And, but yeah, I mean, I think they've been fairly open in the past about using, and I don't wanna say it was like, I don't, I don't know how they were looking at the data to say, this IP address was searching for.

was searching for X amlodipine. And then selling that to, so that you could get marketed blood pressure cuffs or something like that, but yeah, I think they kind of got away from that because of all the scrutiny. But, yeah, that's a common thing that we tell patients.

Kyle McCormick, PharmD: And, to have it actually come out and be fine for that is now, like patients hopefully will see that we're telling the truth and,

stop using the cards a little bit more.

Mike Koelzer, Host: GoodRx. has done a pretty good job online. They've got pharmacists writing for them and they've got some pretty decent articles online.

I guess it brings [00:25:00] me to the point of thinking too, though, it's like, that's what, we talked about chat, g p t, but brings up the subject too, of what is a medical writer nowadays and why even look up GoodRx stuff online. We can go to chat g p t and get that information. But they do a fairly decent job of writing stuff.

And I kind of get mad at myself sometimes when I'm in the pharmacy and I'm looking up an answer for a patient and kind of going online to see if it can help me a little bit. And I'm like reading a GoodRx article, to them kind of like paraphrasing it back to them, and then I'll throw in something about don't ever listen to GoodRx because they steal your information.

Kyle McCormick, PharmD: but they write good medical No, they really do. The interesting thing about that is,their motivation for doing it isn't so much to help patients. That's all just a play for search engine optimization.

 yeah, it's, you're not really helping out good or X by reading this , so don't feel too bad.

but those are purely just to get, the more they mention the different drugs on their website, the more anytime somebody searched those drugs, good GoodRx price 

Kyle McCormick, PharmD: info will show up. So it's purely a, 

purely a optimization play

Mike Koelzer, Host: One of the gals from GoodRx. I was gonna have her on my show, and I think after I invited her, I thought to myself, I'm not sure what my motives are, because one of them. Rules on my show to myself as I always present the guest in a good light.

And so a couple years ago I had someone on for multi-level marketing, but I told her ahead of time, it's like, look, , I'm gonna go after you a little bit. I said, it's gonna be good fun, but I'm gonna bring up the stuff on my mind. And she said, I don't care. let's talk about it, this and that.

 But the cancellation came through, so I got my message that they didn't want to go there.

Kyle McCormick, PharmD: yeah. so. 

they can cancel. W that's

Mike Koelzer, Host: Well, they set it up. If 

my memory's correct, they set it up and then they

Kyle McCormick, PharmD: Realize 

you were gonna hardball 

Mike Koelzer, Host: And I wasn't not old Uncle Mike. I'm not gonna lay it to him,but you've gotta be honest to the audience.

you can't just ignore something like that. Especially when your base is on the same side of, my thinking or our

Mike Koelzer, Host: thinking. 

Kyle McCormick, PharmD: Especially when the base is paying the gooder X fees

Mike Koelzer, Host: Kyle, I'm not sure if a year ago you and I could be sitting here. During business hours talking like this, does that mean that you've got some help on board?

Kyle McCormick, PharmD: yeah.I've, we've grown enough to where we hired a part-time pharmacist, 

soI'm at home right now, which is, yes, definitely a different feeling than 2021 when we last talked, I guess, cuz we've had him all of 2022 and, yeah, a lot has changed. I think probably when we last talked our biggest day was probably like 45 prescriptions or something like that.

I don't know, I'd have to go back in time, maybe a little higher. But we've now hit triple digits several times. our average is probably in the seventies, script count per

day. We've got probably 600 direct members and probably another 600 members through our direct primary care partnerships. We are growing every day, some days adding as many as 10 new members, or some days of every day adding a new member.

but usually like. Now, four below five members a day. I'm like, kind of

Kyle McCormick, PharmD: like, oh, it's a slow day today,

Mike Koelzer, Host: right. Exactly.

Kyle McCormick, PharmD: So, so yeah, a lot of different growth metrics that have been exciting and definitely a big difference. I, the fact that I even had an hour that I could step aside and talk to you without being interrupted by a patient just shows how slow we were last time, cuz now if I were in the far, that's why I purposely stayed home today to do this, is because I knew that I would get interrupted or the phones would be ringing, in the background and things like that.

So, yeah, a lot looks different than, we last talked.

Mike Koelzer, Host: At what point did you think this was going to last for, let's say at least another year?

 I know when we talked you had the fire in your soul, but did it come to a point where you could take a breath at all?

Kyle McCormick, PharmD: Yeah. I mean, every day is like, okay, we're growing, but yeah, when are we gonna like make it

I feel like every entrepreneur is constantly like, okay, yeah, we hit this milestone. Now it's onto the next milestone. So it constantly feels like we're, I keep telling myself we have to do more, But I'd say several different milestones. So, you first have your. X number of script count days. That's super exciting. Like early on, we opened March, 2020, so it was, March 20th, the state shut down, closed, not allowed outta your house basically for two weeks, for the next two weeks. So my initial metric was just, Hey, did I see somebody today

Mike Koelzer, Host: Yeah, right, exactly.

my next metrics were like, oh, 10 scripts in a day.

Kyle McCormick, PharmD: That was exciting. then, 25, [00:30:00] now it's like a, now I'm less driven by the number of scripts, but more by the number of members signing up. and then we have different metrics, like, okay, previously we were doing all the work of signing up a member and so patients had to, patients basically would call us.

We'd do all the work of signing them up. Now the cool thing is like tracking how many people find us. on their own and sign up on their own using our website. We still talk to every patient because there's nothing on our website. That's all, nothing's automated. So we just get a form filled out that's, hey, I need these things transferred and hey, we gotta get your credit card information, all that stuff.

But it's still cool to like, have them do, like, that's a new metric that's like, oh, how many people did we get to sign up on their own online? Meaning it was word of mouth that drew 'em to us. they found the process easy enough that they just did it themselves. So, different metrics like, just notoriety, um, recognition, from, local to national has been exciting.

One metric that still stands out is like, Hey, we're onto something. Hey, maybe this is actually something Mark Cuban is launching his own version of, right? That was very validating. It was just like, okay, but why? Give me the check to do it.

 So, but that's still very validating and I think,there's different milestones along the way.

Kyle McCormick, PharmD: What's driving me now, and I'm almost certain this is the future, is the fact, a lot of it has to do with first principles. The purpose of insurance is not for low cost, predictable things, and that's everything. That's 90% of what pharmacy does. And so that first principle and knowing that adding an administrative burden to that process just drives up costs.

So I keep telling myself that over time we will keep wiping out those middle layers until we get to the lowest cost option of healthcare, which is just no middle men selling directly to patients. And so I truly believe that we'll eventually get there for all generics. and that's what continually drives me is more that first principles approach to pharmacy.

Because I think we're growing every day. We've not seen a day that we haven't grown. we've not ever had a day, we haven't added a new patient. So I don't see any slowing down. I don't see any cause for concern. That's why I've moved on to thinking, okay, now let's just do it for everybody. how do we get to that level where every generic prescription is filled without insurance?

We're still coming up with creative ways of engaging patients. A lot of stuff that we do, like one of the very basic things, so basic, is our name is Blueberry Pharmacy, so we embrace that for everything. Everything's blue packaging's blue vials are blue. but one thing that you know works well with patients is we get a blueberry, dumb dumb, and we set that up with our order and so they get a little taste of blueberry for the road.

but we get emails about thanks for the blueberry lollipop , like the fact that few, the patients, like that's what resonates with them, not thanks for the long conversation about this new medication I'm starting. not like they appreciate that. I know they do. cuz they'll say it during the call, but it's like the follow up of, hey, this stood out, this was different.

and I think pharmacies and independence, that's one of the big marketing lessons I've learned is. , you have to have something that really sticks out and kind of, makes your brand and it really drives that brand awareness. cuz for us it's something as simple as a blueberry lollipop or people love the blueberry blue packaging that we send things in.

Kyle McCormick, PharmD: People love the night before Christmas, poems that we have. And so, we just constantly, whenever we're doing marketing things, it's not what we can push out, via social just because we wanna push something out via social. We have no schedule. It's just whenever we have something of value enough that we wanna share it, that's whenever we share it, we try to drive the most value.

Like, we don't want our marketing to just become marketing for the sake of marketing. We want it all to be value driven and impactful for patients, for pharmacists, for whoever the intended audience of that marketing piece is.

Mike Koelzer, Host: When I have an idea for something social or something, I can't do it and then wait till the next day. It's like I get an idea curve up there and it lasts for about an hour and a half, maybe I gotta do it, produce it, get it out in that time. If I gotta save it till the next day, a lot of times I look at it and I say, oh, that's crappy. So I'm my best critic when I'm in the middle of a good idea because I don't criticize it.

yeah. You just act on it

Mike Koelzer, Host: part of the problem is that there's not really a reason for people. Talk about you. And so that, dumb, dumb thing is fantastic, we send out a little card with everything, it just reminds people to talk about us but most people, you just don't sit around too often and just talk about your pharmacist and proof for that.

How often have you been sitting around, and been talking about your, ear, nose and throat doctor to your siblings, or talking about [00:35:00] your last oil change or something like that. Now, if you do medical equipment, which we do, people see it, they say, oh, that's a nice multicolored cane you got there with lilacs on it, or something like that.

People see that and it's a conversation starter. But anything you can do. Get that conversation going between, a couple of old ladies sitting there, do it, but they gotta be reminded to talk about it.

Kyle McCormick, PharmD: And I think that's one thing that, I'll say that the model has really helped us with is that the fact that we are different people do talk about it.

Mike Koelzer, Host: Well, that's it with you guys, because you've got that difference and they've made that change. 

Kyle McCormick, PharmD: Yeah, like the other day, I don't know, I still don't know what was said, but I got a text, Hey, some patient called into 100.7 the star and mentioned blueberry. Blueberry. Like, why? Like what did I do? Like, always wonder what encourages. I feel like I just am a bad customer and consumer cuz I generally don't write reviews or, or react to things.

But maybe I'm just not going to high quality enough locations. But, um, yeah, no. I'm so appreciative of our patients because they are our biggest advocates. And, we have patients that literally next day will go back to their doctors one, stood in the room, in the waiting room until the doctor would come out to see her, not for an appointment, but to educate the doctor on the 

pharmacy and the model. Yeah. 

Like, I, like I pay a pharmacist to go out and do a marketing you get for free. That's

fantastic. And honestly, that's more impactful than the 

paid marketing that we do. Right. so, 

so, yeah. So whatever, I mean, what we found is patient, word of mouth is the singular biggest driver of our pharmacy in the,the, in the model.

and you see that with, again, back to Cuban, and I don't know how much of this is hype and whatnot, but, , they said that they were only anticipating 300 to 400,000 patients in year one to sign up. but they have 1.7 million accounts. And I think that it's truly just this is what I encourage all independence to think about is one, one proof of product market fit is the fact that end of one year, 1.7 million people resonated 

Kyle McCormick, PharmD: with them. It's just a model that resonates with people. Once people see the simplicity of it, yes, it's very easy for them to see, make the decision. If it's, drug through insurance is gonna be a hundred bucks, drug without insurance is gonna be 20 bucks. It's a no-brainer. But I think even the people that interact with the system that doesn't involve insurance, it's just a game changer.

even pharmacists, like once you start realizing that means no prior, a no rejections, 

Kyle McCormick, PharmD: no. Our overhead,our inventory is still $17,000. When the last time we talked, it was probably just like 10,000, actually it might only have been six. So maybe we've inflated our inventory a little too much, but

but like, it's just that simple. And so it, it's something that is so different from the way of doing things that I'm gonna go talk about it. and so that, I think that's really what patients are realizing is, Hey, this model, sometimes it costs us a little bit more than our through our insurance, but hey, it's so different and it's such a, such an experience that I'm gonna talk about it

Mike Koelzer, Host: Having a face behind the

business. You've gotta be careful. My cousins, my uncle, and then my cousins, they owned a fine dining restaurant. This was years ago. And the name is eponymous with. their last name 

and they were open, let's say till midnight. The problem with that is that when you walk into fine dining, you want to see one of them. You want to tell your friend, oh, that's so-and-so's last name they're friends of mine and they said hi to me and Oh boy, bill.

You're a big shot. Because the owner of that restaurant with the same last name as the restaurant knows you, it's small, but people like prestige.

Mike Koelzer, Host: A big part I think that Cuban had going, is that he was one of the first persons to put a name and a face behind us.

 you just offended a lot of independent owners,

Kyle McCormick, PharmD: I know what you mean. 

On a 

Mike Koelzer, Host: on a national level. I meant on a national level.yeah. Yeah.

Pharmacies kind of have that problem too, because you have to be careful if you're open for longer than 40, 45 hours a week, and you say, this is Joe's pharmacy, and Joe's on every ad, just like the Gotti, mattress ads kind of thing.

He's on everything and says, come down to Joe's Pharmacy. I'm Joe. Talk to me. You'll get Joe's service and all that stuff. If you're open, 60, 70 hours a week, Joe better be there if people come in thinking that Joe's gonna be there. So for the longest time, I tried to remove myself a little bit [00:40:00] from the store if it was gonna be a name associated with it.

I did that with social media so that I could talk to a thousand people when I'm just sitting at my desk. So they say, oh, there's Mike. I don't necessarily just see him in the store because I see his name in his face associated with this. so that can be a struggle. With all that said, Cuban's the first one on a national level to put his name and his face on mail order kind of thing.

Kyle McCormick, PharmD: And I think that's, I think that's pretty big. I think it's a true mark of how things have shifted towards influencer culture,

right? I think Phil's my pharmacist. I don't, has he been on yours? I heard. Heard him.

I've reached out to him. he's our 

Kyle McCormick, PharmD: Okay. Yeah. TikTok guy, but just that level of. People building up a brand. It's more about your distribution. Capac. Like, imagine I partnered with Elon Musk tomorrow, we could be quickly at 1.7 million accounts. Right? It's just that the distribution, your ability to distribute is superior to your product to some extent.

the ability to distribute your name.

Kyle McCormick, PharmD: Yes.yeah. your audience size is more important. Like, we could be building the best pharmacy, grinding it out, that's kind of what was happening. We were grinding it out, grinding it up. Now at 2000 patients, 3000 patients, mark Cuban launches, and because he already has the name in the present.

That, that distribution, just even though he is not the pharmacist on staff, even though you don't walk in and see Mark Cuban there, that name and that recognition just means something. And so I think influencer in your audience size is and will continue to grow in importance. So

encourage any aspiring pharmacy owner to start building that audience now, which, as you do with the podcast, I mean, you've got now an audience of owners 

that,you're synonymous with podcasts, right?

and so I, yeah, I think that influencer culture is only going to grow. And I think that Mark Cuban's realization of that's the way to grow the pharmacy is not to name it, cost plus drug, or just name it, X mail order pharmacy. But to tie his name to it because he's that influencer I think was really brilliant.

Mike Koelzer, Host: There's people that have been close. Like you think about Nike, owned by Phil Knight, He could kind of do it, but not quite. He was known. And so then Michael Jordan comes along, he's the face of that.

Other guys have done it, Richard Branson from Virgin and of course, Bezos from Amazon and so on. so it can be dumb, but I guess that's a lot of the reason people bring in the talking heads because they're just not big enough.

Kyle McCormick, PharmD: Yeah, influencer culture has been around for as long as there's been famous people,

 I think the ability of anybody to build up something has grown as a result of social media. So I think,that's really, the importance of really anybody who can build up an audience.

And the audience and the ability to distribute to that audience is almost more important than the kind of product that you're offering.

Mike Koelzer, Host: There's a guy online that I've kind of been watching, not closely, but we reached out to each other quickly, so now I see his stuff. But his thing is buying social media people. He's not buying a mailing list, he's buying a social media list. He's kind of like buying followers and not buying followers from one of these fake things. It's like if you had Kyle, if you had something like,I don't know. Let's say you had a big following, basically, and I'd come in and I'd buy your list.

I'd start putting out stuff instead of you. So it's not a mailing list, it's just the base of their social media. I don't know, I'd, I don't know how you'd even price something like that or how valuable that would be.

Kyle McCormick, PharmD: Yeah. I, because I feel like, to the point of earlier, about having your name associated and your face associated with something, once you lose that, I'd imagine in the social media space, the interest kind of falls. so, so to some extent, that's kind of the challenge we went through a little bit with blueberries.

Whenever I started stepping back a little bit more, certain days not even being there are people expecting me to be. 

Mike Koelzer, Host: You felt that firsthand, you're not there, do people expect you to be there? I guess with Cuban he's done it, right? Basically, his name's associated with it, but you don't expect to go in and see him.

Kyle McCormick, PharmD: Yeah. He's just the marketer for it.

Mike Koelzer, Host: he's a marketer, but happens to 

Kyle McCormick, PharmD: Yeah.the owner marketer, The involved marketer. 

Yeah. I definitely felt it firsthand. when I started not being there some days, definitely some of our regular patients were like, Hey, you're never here anymore. I'm like, literally, I'm here every day.

like, I just stuffed up to wait for four hours and you happen to come in for that four hour period. Like, and they didn't mean it in a bad way or anything like that. I was just like, yeah, no, literally here. And even whenever I'm not here, I'm doing [00:45:00] work related things.

So 

But it's that expectation of, oh, I've come to know you.

I've come to trust you. I really value our relationship and now I don't see you. that I've definitely felt that. So that's what, but people ask like, what's your idea for scale with blueberry? they say, oh, are you gonna franchise it? Are you going to open more? At this point, we do have a consulting company. Our goal is to help owners across the country either transform or build out their own cost plus pharmacies. but my goal for blueberry, our goal for blueberry, Ravi, ravi, co with me on that, is really just to, continue building a, very good, reputable, very well trusted pharmacy. And I don't know what scale truly looks like for that because I don't really wanna step away from the day to day of blueberries.

I love being a pharmacist. I love being that patient. the patient trusts,and the relationships I've built up with those patients. So that's what brings me joy. That's what energizes me. So I don't really wanna step away from that too much, but I do recognize. We started a movement, there's now interest in there's a brand associated with that.

So how do we best build from that? so, that's kind of the ongoing challenge of okay, what next? do

Mike Koelzer, Host: Do you mail it all in Pennsylvania or not? Do you guys mail it all?

Kyle McCormick, PharmD: Yes. Yeah.

Yeah. 

Mike Koelzer, Host: Pennsylvania.

Kyle McCormick, PharmD: We do have a license in Ohio, but we don't market in Ohio. Cuz there's a great cos bus pharmacy in Ohio. We just border Ohio. and so there's a few patients, and it's very easy to get an Ohio license.

So we do have a license in Ohio, but we don't market there and we do very few prescriptions. So, but we do mail all throughout Pennsylvania, anywhere from Philadelphia to Pittsburgh Erie and all stuff. 

Mike Koelzer, Host: You mentioned consulting. Who's doing that?

Kyle McCormick, PharmD: Yeah. So we formed Robbie's co-owner of Blueberry Pharmacy.

Uh, Robbie Patel, he's a professor at Pitt,

He's been with me since, a couple months after we opened in 2020. And,we started getting a lot of questions, especially early on. It's like, Hey, we haven't even proven the model yet.

Like, come back and check in. And, but we kept getting a lot of questions from independence across the country, like, how do you do this? What do you do? And it's like, you only answer so many of those for free before it's 

like, okay,schedule some time with me. We'll talk

And so we got to thinking and I'm so much into the day-to-day and my previous boss, who was also a previous owner of an independent owner and really understands the independent pharmacy business, Stephanie Smith, Coney, the three of us got together and said, okay, let's just form a consulting company. We have all this knowledge. Three years of now at this point, three years of knowledge, three years of experiences of building a cost pharmacy. We've got all these connections and we've basically talked to most of the Costco pharmacies across the country. We've even talked to Cuban's team, right?

So having those connections, that experience, we were getting a lot of questions, like, let's just form a company. so we launched a company back in January of 2022, where we're helping just independence better understand the concept, answering questions around what does this mean? Is this possible?

How do we go about doing it? so, that's been a lot of fun. Had a lot of fun conversations with an independence all over the place. The other thing we're doing is actually launching like a price checker. Single source. Price checker, right? one of the beauties of GoodRx.

Kyle McCormick, PharmD: It had this network effect. You'd see cards in doctor's offices across the country. You went to a website, you know that somehow it would work in a community, in your community, right? It had that network effect. People could start talking about it. So it's like, okay, blueberry pharmacy, people hear about us.

How can we help other cost plus pharmacies across the country? Like, we can't serve Texas. We can't serve Oregon. But there's people there that can, and so it's like, okay, let's just create a price checker that we can feed in other people's data and have it display their prices. And so that's what we did with cost plus pharmacies.com.

Cause we created a, basically a

price checker for all these different costs plus pharmacies. And so that's the other big thing that we're working on now, is helping with the network, helping build the network effect of cost plus, Mark Cuban helped to bring some awareness to it, but how do we grow the independence in that area?

if I get in the news about cost plus pharmacy and blueberry pharmacy, how can I then help that benefit every single cost plus pharmacy across the country? And then what we also thought about is, hey, GoodRx came into fame because they just mailed out business cards to offices across the country.

Kyle McCormick, PharmD: Well, as we scale and as we have a cost plus pharmacy in every state, why don't we do the same thing, right, like Costco plus pharmacies.com. That way now it's worth the time of each individual pharmacy to talk about Cowell's pharmacies because now there's a pharmacy in every single state and patients can go to that price checker and know that, hey, I'll find something.

Right now it's a little lacking in that there's only like six states that you can actually search in. And so we're trying to grow that network effect to where more and more people, it's more valuable, the more people that go to

Mike Koelzer, Host: Kyle, what's your wildest dream in [00:50:00] 10 years?

Kyle McCormick, PharmD: Wild's dream would be that every single generic drug is sold without a PBM or insurance. So, a. Fair and transparent open marketplace across the country where we are no longer pricing based on market price or pricing based on your value of time, my value of time parts plus labor. Right. So that would be the wildest dream is that PBMs insurance are completely removed because these are low cost, less than a cup of coffee acquisition costs, drugs, and there's no reason for a PBM to be involved in any of those transactions.

So that's the craziest dream is like down with PBMs for generic drugs. I don't know cuz that's also their profit center, so I'm not sure that they'd be willing to do that. But

Mike Koelzer, Host: We probably talked before, the analogy of that is we're not using insurance for new tires for our cars and oil changes and things like that. it's pretty much a known cost, and so let's get the middle people out of it.

Kyle McCormick, PharmD: Yeah. Well, First make awareness around it actually being a known cost, cuz it doesn't feel like a known cost to most consumers still, unless they're aware of cost plus or different ways to see NADAC different things like that to a lot of people, prescribers, patients is still, feels like an unknown cost.

and so walking into that void, being uncertain is scary for people. So they think I'm insured, I'm good. and so bringing a lot more transparency to the marketplace will help people feel like, oh, this is a lot more like getting an oil change. Cuz I know the cost going into it and, hey, the cost is actually really low.

Why even use insurance for this? Or it's gonna raise my premiums in the long run. Just the same thought process that we go through with car insurance and whether or not to use our car insurance. I look forward to that time whenever we can see that in healthcare too.

Mike Koelzer, Host: What would you like to be known for? So in other words, that's the goal of what people think about medicine. What would you like to be known for? If people look back over this five year period,

Kyle McCormick, PharmD: Yeah, I mean, I'd be, I don't really care, but, probably, honestly in the back of my head, do care. that, like, as a pioneer, I can't say that I'm even the first, I don't know who the first is, but as a pioneer of the costless model for sure, that'd be kind of cool. But honestly what means the most to me is just patient affirmation and knowing that I'm a good pharmacist and that I care for my patients, that's what means the most.

This what drives me every day is patient notes. Patient, Thanks. Thank you. Doctor, thank you. yeah, just knowing that I made an impact on somebody's life is the most important thing to me.

Mike Koelzer, Host: We have to be conscious of price, but it's that plus part that also says that there's a value to what you're doing. That seems gratifying.

Kyle McCormick, PharmD: Yeah. The problem with the PBM world is that we basically don't get paid dispensing fees anymore. So our price is, ingredient submitted cost. Right? And as much as we would like to argue that somehow my loop in generic atorvastatin is better, Giant eagles loop in generic 

atorvastatin. There's no argument there.

Our difference, what we should be paid for is that difference of service. It's a commodity. I don't care. I'll say it. Drugs are a

commodity and there is no difference. So we have to pass through that price, and we have to make our money on that service, which is not at all how we get paid. In the PBM world.

We make money by buying low and selling high because we've negotiated things down to where we basically don't get charged a service fee anymore. So we really have to change that incentive structure. As Nate said on your podcast, we get really good at what we get paid to do. So in the traditional model, we're probably really good at finding things that we make money on and.

But in the cost plus world, we get paid the same every time we perform a service. So we just get really good at performing that service. And it's a lot better. It's a much more realignment of healthcare incentives where you even said it like, in that podcast is, I feel bad, but you know, I'm incentivized to provide more intention to the person that I'm making money on and provide less attention to the person that I'm not making money or even losing money on.

And that can't be an incentive, that's not an incentive for healthcare. but not at all. That might be how you look at another retail sector that's not care based, but like, that can't be how we view healthcare. So we really have to fight for a change to the reimbursement model.

Not just a change to P B M oversight, but literally getting paid for our service because that service is the same whether I'm putting a label on a Tecfidera prescription, cuz let's be honest, I don't even have to count it out. Or counting out four capsules of [00:55:00] amoxicillin. Those drugs are the same.

Our service is, you know 

Mike Koelzer, Host: What we need to get paid for Well Kyle, boy, it's your fun watching you online and seeing the stuff that you're doing , keep that up the message behind it is certainly very important.

Kyle McCormick, PharmD: Well, thank you so much, Mike. Really appreciate you having me on and catching up again. it's a good check in and, your podcasts are great, so keep doing 

1. Thanks for being a part of it.

Yes, definitely

Happy too.

Mike Koelzer, Host: thanks Kyle. We'll talk to you soon.

Kyle McCormick, PharmD: Awesome.

Thanks Mike.