Vertical Integration | Antonio Ciaccia & Ben Link, PharmD, 3 Axis Advisors and 46brooklyn

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

Antonio Ciaccia: My name is Antonio Ciccia. I am the president of three access advisors. It is a data analytics and research company that does work for Medicaid fraud control units, state attorneys, general state auditors provider organizations, research firms, and just in general industry disruptors that are seeking to create clarity and efficiency, and then otherwise not, not a simple and inefficient marketplace.

And I am also the CEO of 46 Brooklyn research, a nonprofit dedicated to using publicly available drug pricing data to give insights away to the general public for free. 

Ben Link, PharmD: My name is Ben Link. I am a pharmacist at three axis, the vice president of pharmacy. I do data work for all the clients that Antonio just listed off. And then I'm also a president of 46 Brooklyn, which means that I do all of the data work and, uh, some of the report generation for what we're giving away there from a public information on drug pricing standpoint.

Antonio Ciaccia: Today we're gonna talk about the sausage making of prescription drug pricing data, and some of the complexities that arise in an increasingly vertically integrated. Health insurer, PBM pharmacy marketplace, and some of the conflicts of interest that might perhaps stand in the way of a true value-based purchasing arrangement for plan sponsors and government agencies.

Mike Koelzer, Host: The reason I kind of like talking about vertical integration is because it's something that is not so nebulous. It's something that we can all see. We can purchase our eggs while we're at the grocery store and prepare them when we drive by these pharmacies that are part of the vertical integration to hit their windows and all that kind of stuff with Halloween coming up.

I like the tangibleness of that. Well, Mike, to play off the, the Halloween, uh, stuff 

Antonio Ciaccia: here. My favorite Halloween, candy, and actually I should preface this. This is not candy. This is a dessert, the take five bar. All right. There's candy. And then there's the dessert. And that is to take five bars. What is the take five bar?

It is, it's got the caramel, it's got the pretzel. It's got the chocolate, it's got all the goodness all wrapped in one. That is a perfect example of how vertical integration can be just so amazing all made by the same company, pushed together to give us a wonderful, wonderful tasty treat, um, vertical integration in a broader sense.

You mentioned the grocery store. It's nice to have perhaps when Kroger a giant Eagle makes their own cereals, et cetera, and has it there for us. Um, it makes things incredibly convenient. Obviously there's also efficiencies that can be derived out of it. Obviously we're not here to talk about those tasty things.

We're here to talk about healthcare and vertical integration. I, I will argue, is not an inherent evil. Uh, it just so happens that vertical integration can also create some conflicts of interest that can make, make it really, really ugly. And so one thing that we're seeing in pharmacy, and usually I'll talk, I'll, I'll talk to a lot of, a lot of pharmacists about this is that I think the immediate, uh, jumping jumping point when discussing vertical integration is I think in the pharmacy community, it's instantly evil, right?

Like, oh man, these, these big vertically integrated companies are coming in and they're gonna just, you know, beat everybody to death. Well, I look at vertical integration. I see opportunity, right? Vertical integration is sold to us. And, and usually when CEOs, uh, are talking about big mergers and acquisitions, um, they're they often often always point to the synergies, uh, within their current business model, relative to what's being acquired and how those, uh, the scale and those efficiencies can translate into greater returns for them, but they also always sell it as a benefit to the consumer.

Um, the truth is, is that that should be the case that when a vertically integrated health plan purchases, a PBM and purchases, a pharmacy at hell, maybe even purchases a prescriber, if there's an overall plan to make the patient better from a value perspective, then locking up all of those things and syncing them up on the same incentives.

And the same essentially autopilot should be one that provides great quality at greater efficiency. However, as we've learned, uh, that sounds great on paper and is much harder to deliver on. In the real world. Cause what happens at the real world is, is that vertical integration creates new conflicts of interest and new incentives that start to distort the mission of the [00:05:00] organization to make money above and below the line in ways that start to work against the sell that was originally made to provide greater value to the consumer.

Mike Koelzer, Host: Who's to blame for that? When does that go offline? Is it the FTC? the opaqueness of what's really happening is it lobbying, pushing that the other way? Is it a crime? Why doesn't it work?

Antonio Ciaccia: Well, I'll give a simple answer and Ben could probably explain it a little bit better in, you know, in the details, but at the end of the day, no companies that work in this space, let's just use the drug supply chain exclusively, right? Let's leave the greater healthcare ecosystem out of this. every layer of the drug distribution channel, you have publicly traded companies. And those that aren't publicly traded are owned and operated by folks that would love to make more money. And so let's just for the sake of argument, say that from drug maker, To wholesaler, to pharmacy, to PBM, to insurance company, to PSAO every little acronym that you could throw in the middle.

Everybody exists to make more money than they did yesterday. And so the question then is if that is their fiduciary obligation as a publicly traded company, and if that's their incentive as even just a business owner, the question then is at what point can they maximize the most money out of their arrangements?

What I believe, what we see is that this is exactly how the system is supposed to be designed at least from a profit incentive standpoint, the degree with which they can maximize returns will be the, will be the north star of the enterprise. And so what we're seeing is that there are ways to make a lot of.

More than they otherwise would in a traditional business model by leveraging the synergies of vertical integration, rather than to create value for the consumer to create value for the enterprise. Right. Create value for the, for the, for the shareholders. And I, I say that, not to say, oh, this is evil, or this is rotten.

I say that because we have to embrace this reality because as we look for ways to control costs, we have to operate in a way that recalibrates incentives to actually get what we want at the end of it. Otherwise, we should expect that a vertically integrated company, or even when that's not vertically integrated, we'll do whatever they can to maximize the most returns.

They.

Ben Link, PharmD: The things that I would. Would add there, right. First, it comes down to, you know, what, and how are we measuring, right? The FTC in your question as an example, right? The way that they measure whether this merger is good or bad for the market has changed over time.

Right? And our focus on, on what truly benefits, the quote unquote consumer, um, and how we quantify that, that math is different today than it was, you know, 40, 50 years ago. And that becomes challenging in a space. Like we find ourselves with a healthcare industry that is a key driver of economic growth.

You know, something like 20% of our gross domestic product is tied in some way, shape or form to healthcare. When the inputs towards that healthcare growth are largely. The consumer and the payer, right? At the end of the day, the way that the money flows is, whatever money we put in at the top of the supply chain is at the end of the supply chain.

Right. That's gonna pay the people before us. That's gonna pay the provider, pay the insurer, pay the manufacturer. And so, you know, when we are not sure what we're measuring and we're not sure how to value it, is it any wonder? Sure. We're getting the for buck that we're hoping for.

Mike Koelzer, Host: When I hear about the goals of the FTC, it's focused on the company and the end user, is it fair to say they don't give a rat's ass about anybody in the middle, unless it's going to affect generally the. Final user and far as pharmacy goes, it would be access and, you know, uh, quality of care, things like that.

Is it a fair statement to say they don't care about anything in the middle, unless it affects those two bookends.

Antonio Ciaccia: I, I don't think that's the case, Mike, um, you know, I think that part of the reason they care about what happens in the middle is because of its ex you know, extrapolated of impact to the end user. Right. I think that that can be fair, but, you know, I, I, from what I could tell you, based upon what the FTC is saying publicly, and based upon, you know, some of the dialogue that we've had with the FTC as well, is that I think there's a genuine interest [00:10:00] in, you know, what I would just loosely define as a fair field of play and whether or not that field of play fair or unfair is creating.

a Unhealthy environment for competition and an unhealthy environment for the end user or the purchaser. Now you could argue that the fair field of play, uh, from a, from a competition perspective is, is motivated by that end user experience or that consumer or that payer, uh, experience. But I would not characterize it as an agnosticism to what happens to the provider or anybody else in the middle,

Mike Koelzer, Host: When I look at Lena con as the FTC. It seems like she's got a big pie, you know, she's got a pharmacy and she's got bookstore owners and she's got grocery stores and shoe stores and things like that. It seems like the pharmacy has taken a big piece of her pie.

If not, she must be really doing a good job of letting everybody know each piece of the pie she's representing. Is pharmacy for her, a bigger piece of her pie and why?

Antonio Ciaccia: I mean, uh, it's hard to speak for her, uh, obviously, but I can try to assess from what I see on the outside, really what the FTC is struggling with is you could argue somewhat of a, of a transitional identity issue. Right? Who is the FTC? What does the FTC do? I've been critical, not necessarily because of inaction or, or let's say a lack of results, but everything that I see in pharmacy and in healthcare with vertical integration from my perspective is really what I learned as what I just call FTC one oh one back in high school.

What is the purpose of the federal trade commission? And when you throw in some of the problems that we've identified in the pharmacy marketplace, again, the dummy in me says, well, that's the FTC, right? That's the FTCs supposed to fix this. Right? And so I'm not, I'm not saying that, you know, that dumb guy opinion was right or wrong.

It's just, you know, my gut is, is that the FTC has been, you know, overly hands off when maybe they should have their hands a little bit firmly on, on the levers. I think you see an FTC trying to grapple with what they want to be when they grow up and who they want to be today. And well, maybe what they didn't want to be when they were, you know, a couple years ago, um, to that end, I think, you know, as they look at the impacts of horizontal consolidation and vertical integration beyond healthcare, I think that health, I think healthcare provides a unique lens with which to view perhaps those broader issues outside of our, out of our little bubble.

 Let me explain. We like to talk about healthcare as, you know, being non transparent, uh, you know, overly, overly complex. In some ways you could argue, we have more publicly available data about the sausage making of drug pricing than we do in other traditional marketplaces. Um, I would argue still incredibly insufficient, but we get more insights thanks to some of the publicly available data we're able to acquire than probably we have in a lot of other marketplaces.

In addition, if we have problems with horizontal consolidation and vertical integration in other markets at the end of the day, we're typically dealing with goods and services that we as consumers can go without. Right? Uh, there's, there's a, uh, one thing I, I, I remember hearing in one of the FTC round tables was, uh, problems with, uh, vertical integration in the beef supply.

Um, you know, uh, there's a lot of problems with, with, uh, the beef marketplace. Okay. I don't necessarily UN understand them when I go to the grocery store, the price is still, you know, kind of good, you know, maybe I wouldn't like to pay for the, you know, Super expensive steaks. But at the end of the day, I still have power as a consumer to make a decision with my wallet to say, okay, if there's something wrong in this marketplace, my price sensitivity can or cannot be impacted based upon how bad that problem is.

And at the end of the day, the beef is too expensive. I will not buy it. I'll choose to buy chicken or heck maybe I'll even go vegan. If the whole meat industry becomes an entire disaster. At the end of the day, I can make those decisions. I can choose to buy something else or I could choose to buy elsewhere.

I still have a tremendous amount of mobility thanks to the power of my wallet. in healthcare. That ain't the case, If all of a sudden it becomes too expensive because of issues with horizontal consolidation and vertical integration. Well, that, what that means is that we as patients don't get the medicines we need in order to stay alive.

And so I think from a prioritization [00:15:00] perspective, one could argue that the healthcare sector is of unique exigency relative to other marketplaces because when the problems appear in healthcare, the problems can be a matter of life or death.

 One of the things that I think makes pharmacy, and I think where your independent pharmacy owner, your, or your chain pharmacy, that's not the beneficiary of having vertical integration and, uh, your, your subsidiary or affiliate company providing disproportionate benefit to you relative to competitors, is that at the end of the day, the beef purchase or a lot of these other, uh, goods and services that we purchase back to my wallet.

Okay. The wallet is still. King right. The cash in that wallet drives decisions. So if I am a grocer and the, and the cost of beef goes up, I can raise my prices. Now I might have to deal with the fact that, you know, price sensitive consumers might make a decision to shop elsewhere or no longer buy that product.

But at least I still have control over my price at the pharmacy level. And we've done a lot of data analysis to look at this. You could charge $5 for something or 5 million for something. If the PBM says you're gonna get paid three, you're gonna get three, no matter what. And so, from a pharmacy perspective, pharmacy can only control its destiny in a downward way.

It cannot bill its way out of its problems. So, uh, Ben Ben actually worked on an analysis on this, uh, with our, within our, uh, the state of Massachusetts, where we were examining pharmacy reimbursement data and how little power they had to impact their financial fortunes.

Mike Koelzer, Host: I'm gonna play devil's we can raise our price. It's just that we don't know where the customers are gonna go. The problem is, that in the grocery. The one customer is Antonio in the pharmacy system. That one customer has, you know, 30% of your business with that monopoly.

Ben Link, PharmD: Yeah, I think all analogies are gonna fall a little bit short, right? Because healthcare is unique. And I think the point that you're making Mike is that when it comes to the wallet, access in Antonio's analogy, right. Is the wallet actually shared? There is another player, right? Very few consumer goods.

Do you involve a secondary source of that wallet? Right? Like when you, most people nowadays, after the affordable care have prescription drug insurance. So when they shop at the pharmacy, they're not shopping. Independently themselves. Like they can at a grocery store where, where I physically show up, I'm buying this stuff with my own money.

Right. When I show up at a pharmacy, I'm showing up there with a card in my pocket and that card in my pocket is going to pay a portion of the bill as well. That is sometimes a lot. And sometimes a little, sometimes there's actually, you know, no value in that card there, right. Where it would be cheaper for me to just find a cash only pharmacy to buy the product at and just forgo the premium that I'm paying and the value of insurance that I've supposedly secured versus other instances, the drug is $2 million and I don't care who you are.

You're not gonna pay $2 million by yourself. You're gonna rely upon your insurance to help cover the bill. And so I think, you know, The questions that we've been asking internally a little bit more is a more fundamental question that I don't know the answer to, but it's what do you want drug pricing policy to actually accomplish?

Right. Do we know what drug pricing policy is supposed to achieve as an end result? Right? Because the easier, the quick answer you might reach for is we want cheap drugs. There's a lot of consequences with cheap drugs, right? If you've read a bottle of lies, right? You can see how a drive to ensure low generic process results in products being tainted or consolidated when like a hurricane rolls through Puerto Rico, we lose access to sodium chloride bags throughout the country, because we had consolidated that as a way to drive down cost

right. And the inflation reduction act in this whole bringing manufacturing home. Right. Well, it's gonna be really hard to convince them. Drug infrastructure whose motivation might be just make it as cheap as possible to produce that in the United States, when our labor costs are gonna be higher than a lot of the rest of the world where that production is already occurring. So I don't think the answer is cheap drugs, but I don't know what the answer we're looking for. What do we want drug pricing policy to accomplish is. And I think that's why we continue to be in this. Let's have transparency, right? Let's have a market where we better understand what's going on. And perhaps we're dissatisfied because we've spent a lot of our time focusing on manufacturing, price points.

We [00:20:00] have, you know, a half dozen or so different manufacturing price points that we can quantify in data. And we have many pharmacy provider price points that we can quantify in data. And we know very little in between, even though we know there's a lot of value there, there's big oligopoly wholesalers.

There are big consolidated, vertically integrated prayers for those things. And we don't really have transparency into that middle.

Mike Koelzer, Host: Most people don't care so much what they're paying. If they know that they're getting the goods or services in proportion to what they're paying. But I think. A lot of people don't want to pay for something for $5, even if they don't know what they're getting for it. You know, if they were overcharged by $5 at the restaurant, the reason it bothers people so much is not the $50 bill for the food, it's that I paid $5 extra and there was nothing there, there was no value there.

 Pharmacists, maybe haven't done our job showing the value and maybe drug manufacturers haven't done their job showing the value. I think that's what people are afraid of is that they don't know the value that's coming to them.

Ben Link, PharmD: There's some data that supports you there, right? Like before the pandemic, when you asked the US populace and I can't remember who conducted the study, I wanna say it was Kaiser, but forgive me if I'm misattributing the result. Right. But the number one healthcare policy, according to the surveyed individuals was.

Drug pricing makes prescription drugs more affordable. And they primarily were pointing at manufacturers as the cost for that, but after the pandemic and the COVID 19 therapeutics, the people's perception of, of the value of manufacturers and their role is, is more favorable, right? Pre than post.

They can appreciate that, you know, they made billions of dollars right off of the sale of their therapeutics to the US and other governments around the world. Right. I don't think there are many that argued that that wasn't money well spent. And we can appreciate to your point what that value was, but that is a one of one, you know, perhaps niche example compared to the broader issue right.

Where is the value generated along the supply chain? And I, I fully agree with you that as a profession speaking as a fellow pharmacist, right? The professional of pharmacy. Has struggled to identify what it wants to quantify as its value. We have plenty of studies that say, this is what the operational labor costs are to give you a prescription.

Right. But do you understand what those labor costs are in relation to, you know, or outcomes are if we weren't involved. Right. Um, and that's where, you know, some of these topics around payment reform I think are so important. Interesting, right? Because as a pharmacist, when I dispensed the greatest actions I did, I didn't make my store any money.

Right. If I refused to fill a prescription because it was going to harm somebody, I didn't make any money for that decision. And, you know, that was largely paid for through prior work, right. Prior dispensing activity. Um, and so that is, that is a value disconnect, right? The most valuable action I'm taking is not. Recognized or, or, you know, associated with any sort of payment.

Mike Koelzer, Host: This doesn't take a rocket scientist, Ben, to pull this from your point. But I think the value is that people see why they're not upset with the Pfizers and this is because the opposite of that is drowning from COVID, you know, and. Turning gray and all these horror things they think about with COVID the opposite of that is yeah.

Letting these guys, you know, make their money. I don't think you ever want to maybe approach something always on the negative, but it's a hard value sometimes showing the pharmacy value. And I guess you have to say, what if the pharmacist weren't there? What does that look like as bad as someone dying from COVID, you know, can you paint that picture of the pharmacist not being there? I mean, I think that we have secondary measures of that recognition, right? Like we have had decades of the opportunity to, to fill prescriptions remotely, right. Male order or otherwise, and consumers have overwhelmingly Not selected that. Right. They still prefer to see the person behind the counter addressing and filling their prescriptions.

Ben Link, PharmD: Right. And so I don't know if that's true 10 years, 20 years from now. Right? Like as, as the current say, generation that's graduating college, you know, who is, you know, far more technologically savvy, right? Are they going to embrace more [00:25:00] consolidated, big remote filling facilities? Are they still gonna want to see that healthcare provider?

But as I know, Antonio has said, I think on your podcast are certainly other podcasts before, right? The opportunity that a pharmacist represents right now is a very captured healthcare experience. um, I'm gonna use my own past experience in Medicaid, a psych patient that is difficult to manage. Right? Well, they might not show up for their routine doc appointment, their routine appointment to go to the clinic, but they'll show up every month or every three months or whatever it is to get their prescription filled.

You have them, in fact, people talk about it all the time with like, you know, birth control, right? If birth control was over the counter, right, you would still see as many OB GYN visits, right? as you do today and the, the thanking is that you would not be right. If they had direct access to those therapies.

So clearly there's recognized value from access to therapeutics. The question is, are you extracting the value that already exists? Right? You have an individual who is there as a healthcare professional, very well trained. What do you wanna do with them being there?

Mike Koelzer, Host: Yeah. You see a lot of that with like, the producer of the goods or services sometimes forgets their value and you get these weird conglomerates, like, , Bob's hardware and tanning, you know, or something like that.

You just get these weird things because Bob has kind of lost sight of his value and pharmacists, of course we've seen that for various reasons through the years of all the hallmark cards and post offices and all those kinds of stuff. I don't know if that would've gone down the same route as it did, if things were different, but people sometimes are not seeing their own value.

Ben Link, PharmD: It certainly is a challenging situation for the profession at the moment, because the profession is a little bit, you know, unclear of what it wants to be when it grows up. Right? Like there are, when I was, you know, going through school, there were pharmacists that were very much opposed to giving vaccinations.

Right. I didn't go to school to get vaccinations. Can you imagine if the profession of pharmacy wasn't positioned to give vaccinations at the start of this pandemic? Right. We would certainly be in a worse spot with less vaccination rates than we got, but for, but for pharmacy and in that, 

Mike Koelzer, Host: If I give you a choice to have one leader that unites that is that a question that can't be answered? Is it the government that sets that up? Is it grassroots from who has the most popular information channels? Is it an organization in pharmacy?

I'm guessing that we don't know who answers that we don't know who points things in a certain direction. It's probably a little bit of everybody in, the, uh, cream rises to the top.

Ben Link, PharmD: Yeah. I, I definitely am not gonna be able to answer your question, but I will.

at least, 

Mike Koelzer, Host: it either. Of course.

Ben Link, PharmD: yeah. I at least attempt to, to better contextualize it. I, I think at least as it relates to how I heard it is in the US, the comparison that's always made is, you know, your questions effectively boil down to what would be better.

What's the alternative, right? And one of the places we commonly go is to see how other countries pay for these things. Cause they're using the same drugs we are, right. There's really no difference. And. Relatively speaking, getting the same training as the dispenser of the medication as, as we are.

Right. And so when it comes to the difference, right, is we have the premise that the market knows best. We have the premise that we will let a competitive market determine the prices for things. And that will be better than interfering in it. Right. We had the non interference clause in Medicare for many years since its inception in part D that we've only just now decided to change up.

Right. And so the question becomes, if we think that the US is the best world economy or, or, you know, We're not the best, one of the best. Right. And we think that our advantage is the competitive market forces. Right. That kind of brings us back around to the question about what is the value of vertical consolidation, right?

Because what we've seen is we've seen the powers of competitive market forces be consolidated over time. And so the question becomes is that for our benefit. In the aggregate or for our detriment in the aggregate. Right. And the challenge is back to Antonio's earlier statements around publicly traded companies, right?

You don't make multibillion dollar acquisitions to hurt the underlying profitability of the thing you bought. Right? If you are an insurer and you bought a PBM or you're a PBM, and you bought the [00:30:00] insurer that marriage wasn't to make either of your product lines less profitable, right. It was to, like you said, generate synergies.

Right. Um, which normally means reduced headcount right across the organization. And the key there, right. If the goal is to increase returns, right? We are the, we are the source of those returns by and large, right? That's not, that's not a situation where if, if we think the, the market is in the middle and we can measure what.

Spread pricing effects or otherwise. Right? If we think those things were problematic due to a lack of transparency, a lack of accountability around drug prices, then of course, there's gonna be added concerns and added opportunities for a decrease in, in competitive market forces to, to extract value from the rest of us.

Mike Koelzer, Host: It's an upsetting question. As I think back to the question of who has that vision for pharmacy, because you had to kind of like, knock me upside the head and say market forces, but we know it's not true market forces. That's the problem. Cuz you know, pizza shops don't stand around and say, what's the future of the pizza and what do we want our vision to be?

And this and that, it's market forces. Someone decides to come out with a cheesy crust and someone decides to come out with three meat layers and all that kind of stuff. You just see where it goes. Nobody makes that decision. The people I mentioned, you know, the politicians and different pizza associations and nobody makes that choice.

It's just market choices. That's a frustrating thing about it.

Antonio Ciaccia: Well look, Mike, uh, you know, I, I'm gonna rewind the tape back. When I worked at the Ohio pharmacist association years ago, I sat in a lot of long range planning and strategic planning meetings. And I sat in a lot of board meetings and I've sat in a lot of meetings with, uh, with a PHA. And I've been in a lot of meetings with, you know, other pharmacy groups as well.

And one thing, there's an echo in a lot of those meetings. Um, usually when they end their strategic planning, they, they, they get done setting all the, you know, priorities, everything that needs to get done to fix their state of affairs. And one of the things that always gets brought up is. Is somehow developing an attribution model in pharmacy.

Okay. So what is meant by that it's that we all know that pharmacists can provide significant value within the health, healthcare, uh, distribution system. We also know that not all practice settings are as conducive to value as others. Right? And so one of the things that Ben just brought up, you know, a little bit ago, back when he was working at a pharmacy, is that sometimes the best things that he ever did for the system and for the patient were things that were never quantified things that were never not, it's not just about compensating for it.

It's about identifying it, delineating what happened and assigning a value to it. Now, ideally when, once you assign a value to something you. In relation to that value, but in the pharmacy world, we have not done that. And that's because historically the pharmacy payment model has been healthy enough that all those things are cooked into the sauce.

Right? Most of the prescriptions don't require intervention. Most of the prescriptions can be done rather simply. And I, I say simply, and that's somehow I think devaluing what's actually being done, but I say it relative to those interventions. Right. And so historically, if we, if you got paid. 8 9, 10, $15 a prescription in margin.

Well, when you hit the brakes and you, and you make an intervention or you talk to a doctor, it all works out. And then as pharmacy has gotten more and more squeezed as the reimbursements in the margins have gone down the altruism that used to live in the model to provide for that time in those services is now gone.

And so the big push in pharmacy has been all right, how do we create new billing codes and new services that we could offer that we could quantify those value propositions? Well, regardless of how you construct it, the same issue remains is that pharmacy interventions are so hard to quantify the value proposition for, because the business model of pharmacy has always been to pay the bill, pharmacists, figure it out.

And if they kill somebody because they gave 'em the wrong drugs, that's when we'll get 'em, but we've never really gone beyond. Judging the pharmacy beyond errors now DIR was supposed to do that, right. DIR was supposed to, it was sold to us as well. This is how we'll get to a quality based model in pharmacy.

And obviously those rules got compromised by conflicted actors, right? Cause DIR came more about who can [00:35:00] auto fill the most drugs, you know, who can ship more drugs. It became an adherence score, which is clear. Adherence is a good thing, right? Tracking adherence is a good thing, but the way that we do it is completely broken.

We don't evaluate whether or not the patient took the meds. We don't evaluate whether or not the patient got better. We evaluate whether or not we ship them the drugs, or we give them the drugs. And that's not quantifying value. That's quantifying volume.

Mike Koelzer, Host: What's our next step?

Antonio Ciaccia: Well, let's go back to your pizza shop. Right? All right. So, when I was in college, all right. A and a $8 pizza, would've done the trick. Right. You know, an, uh, is cheap, the cheaper, the better, right. Cause the worst pee I ever had was just good enough. And maybe that's because I'm Italian. Um, but, but look, you know, now you.

How has the pizza industry evolved, right? Maybe extra cheese, they stuff, they stuff garbage in the crust now, um, you know, there's a shop over O over here in Columbus that, you know, throws vodka sauce on the, on, on the pizzas, whatever it is. Right. But at the end of the day, We, as consumers, are willing to pay more for something that we perceive of superior quality, in this case superior taste.

Right? And so the question is, what opportunity does pharmacy have to sell itself? Right? And an insurance model, all that value, all the extra stuff that pharmacies can do has not been quantified. So as a result, there is largely a disincentive for pharmacies to do more go above and beyond because the payer of these prescription for the prescriptions for the pharmacy services is no longer the patient, the patient could still pay for services, but they've been so predisposed in healthcare to not have to pay for those things

that they've essentially said, look, I don't wanna pay for anything that isn't covered by my insurance. And so it's part of that I could argue is programming. But I also think back to what you're saying.

I do think this is where the onus of professional organizations is. I think this is a challenge for professional organizations, whether that be a PHA and CPA, a S H P all the statewide organizations. Right? I do believe that there is a challenge for them to first deliver the message of what the value proposition of high quality pharmacist services is.

And then once you actually identify what those are, start working to quantify, developing that attribution model so that the payer, if they have the right incentives and we could debate whether or not they have the right incentives. But if the payer were to be sold a case of, if a, if you pay a pharmacist to do this, this, and this, this is the value to the patient.

This is a value to the plan sponsor. Now, all of a sudden those things can change and to be clear, We started to get momentum on that in Ohio, before we left in that we passed a provider status bill to get pharmacists compensated for their clinical services. And we worked with companies who Mike, you know, my history. These companies should not want to work with someone like me because I've been an adversary on the PBM side, but United healthcare Molina, healthcare Sentinel care source.

All of these companies were looking at independent pharmacy as an opportunity because of the relationships they had, the proximity they had to patients that had high needs to look to the pharmacist as somebody who can add value beyond the dispensing of the drug and in.

Use the dispensing of the drug as a hook to get that patient in because they're coming in every month to get their medications as an opportunity to make a targeted intervention with them. Those programs started in 20 18, 20 19, and now they've grown to where they're doing it in other states beyond Ohio.

I view that as the beginning of that conversation and how did it, how did it happen? It was pharmacists standing up and saying, we can do this. We believe it can provide value. And finally, a health plan on the other end of the table saying, we're willing to listen. We'll put all this drug stuff and, you know, reimbursement stuff on the dispensing stuff to the side, let's meet in a common area where health plans should have the right incentives to increase access, to care, to high quality services.

And pharmacists have the incentive to try to offer those services because we all know the dispensing revenue. Ain't going back to what it was in the eighties and nineties.

Mike Koelzer, Host: This isn't necessarily my thoughts. I've heard it from others that have maybe complained about this, but we're not primary care providers, we're not necessarily blood pressure people or injection people or, uh, you know, blood testing and this and that, we're drug experts.

And I sometimes am a little too close. I'm like the hardware guy that maybe wants to sell, what did he do? Haircuts

or, oh, tanning. tanning. That's right. I'm the hardware guy that might [00:40:00] think I wanna do tanning because I'm too close to the pharmacy.

Pharmacists are unique, but we don't necessarily just want to be the frontline.

Nurses, basically,

Ben Link, PharmD: Yeah. I mean, there is an immense opportunity for somebody to be that person. Right. So, uh, on the flip side, yeah, on the flip side, right. It's been well documented for years that there is an access to primary care. In the US healthcare system and that if that could be solved, theoretically, there's immense value there.

And hopefully someone wants to, to, uh, pay for value extraction. The problem is, we don't know what that's gonna look like. Right. But consider this right. Let's stick with diabetes. Diabetes is a drug that gets picked on all the time because costs aren't affordable. Right. You talked about paying for things of value earlier.

People will do that. They don't want to get gripped, though. If, if they got the $55 charge versus the $50 charge, right. Well, certainly to a diabetic and insulin dependent, diabetic, there's nothing more of value in healthcare. Then diabetes then, then access to insulin. Right? And so what does our current healthcare system do?

Our healthcare system, by and large apps and a few players extracts value from them, right? We generate rebates. We ask them to pay, uh, you know, full price during their deductible for something that we know we're gonna get a 90% discount on, on the backend, according to the Grassly wyden, uh, investigation into the rebates being offered by them, right?

To those, those health funds that's not the $5 missing that's the $45 missing of that $50 bill. and so that's not associated with good outcomes, right? The people who can't afford their insulin or have to ration their insulin, get. Standard care is more likely to develop long term complications, right?

The diabetic keto, acidosis, or retinopathy, or any sort of number of problems. Right? So our healthcare system isn't well situated right now to assess that, right, because that's next quarter's problem or that's next year's problem. That member might not even be with us anymore. They might change jobs, get a new insurer, or they might, you know, have any other number of reasons their employer might choose to not renew with us and buy somebody else's policy. So it is. Immensely challenging in this space to assign value, but I'll give you a good example of like what, what innovative might look like here, right? Take, take expensive products that are more or less competitive, like insulin, right? If you are a pharmacist at the drug pricing expert, and you're at a new start, somebody will get Lantis right.

Long acting insulin, but the plan wanted them to use Bela, right? Could you not work that out theoretically, independently of the doctor, right? That's your value. The patient gets the lower cost drug. Because they get the preferred option with low copay. The doctor doesn't have to do the prior authorization cuz you shifted it.

And the health plan should theoretically want to pay you for that because paying you for that once means that they generate all those rebates or whatever else they're interested in over the next 12 years or 12 months of that product getting filled. Right? So a win, win, win, very 

rare win, win, win, 

Mike Koelzer, Host: it sounds like someone's missing out on money when you sell a less expensive drug. If the rebates and things are not there, is there someone not happy in this? Is it the PBM cuz they didn't get the rebates? Not everybody can be happy.

Ben Link, PharmD: Not everyone's happy. The person I'm happy with in my example is the manufacturer who positioned themselves. Who wanted that sale, cuz they're interested in market share. But again, if, if we're talking about a patient with insurance, right, and you as the pharmacy provider are in some sort of collaborative care or other sort of position where you have the ability to substitute.

What I would consider equally interchangeable products. Right? So there was really no difference from Lantis or basilar or Levemir even right. Especially for a new start, any one of those initial long acting insulin. I think a pharmacist is well equipped to work somebody through starting that drug. Right?

So if it so happens that the patient comes to you and their insurer doesn't want Lantis, but once the competitor product, right, the patient stands to benefit by you giving them the competitive product, because they'll get the lower copay, right? The preferred product will be used as opposed to the non-preferred product.

The health plan stands to benefit because there's a reason why they made that product preferred. Right. That's the one that they get 

the most value from. 

And you stand to benefit because you would get the action of filling, right? You get to fill something versus wait, you don't have to worry.

I mean, we incur a lot of cost as pharmacy providers running down prior authorizations that we don't ever get. Right. And so, theoretically, this is the area where we have the drug [00:45:00] pricing expertise. You have the market that everyone theoretically wins, but the manufacturer doesn't get their market share.

Right. It just strikes me as odd that our substitution laws don't recognize our. Our current expertise as the drug pricing expert. Right? If you have a new start couldn't you work somebody through a Simba court inhaler, just as well as an Advair inhaler. Couldn't you work somebody through starting a, you know, an Eliquis as opposed to Azore Alto.

Now there might be some that say that's a bridge too far, right? That, that, that is a clinical decision that you are not positioned to make pharmacists, cuz you don't have access to all the information, but. I bring it up just as a starting point, right? There are obvious opportunities where, but for somebody doing that, the medication doesn't get filled and the outcome will be the worst possible outcome.

We take medicines to preserve or protect health going forward. Right? If we didn't need them, we wouldn't take them. So somebody who doesn't take their Eliquis or there's Aalto, cuz they can't afford it because it's not the preferred product. What have you? That means that the healthcare system will incur a higher cost down the road than what it's given the opportunity to right now.

And that's where the pharmacist is. They're the right now they're the one at the pharmacy counter that knows what things cost and our best position to help people work through doing that. There's just no time because there's no margin there to support the time to do it. So you have to have these other billing codes.

If I'm gonna pursue the preferred prior authorization for you, it should be predicated on more than just getting to fill that product.

Mike Koelzer, Host: That's a great example, Ben, right there, with the knowledge a pharmacist has in that area. No, one's even close to pharmacists in that area.

Ben Link, PharmD: I saw a study. And again, I can't remember who to attribute it to. Right. But it was contextualizing how much medical offices, doctors, offices spend in prior authorization, how much admin and support staff that they have to address this issue. Right. And it just strikes me as odd that we've decided to leave that there, when there's the opportunity to at least reduce it to some degree.

Right. Like I think that's what. to me, provider status was, you know, kind of more or less supposed to look like, right. Is as providers presented with a case, an individual, the person who, you know, at your pharmacy counter, can you work through what they were prescribed to get them the best option and as, as reasonable way as possible, 

Antonio Ciaccia: I'm thinking of the, you know, 70 year old pharmacy owner, uh, who's listening to this and, you know, has been sold provider status for the last, you know, 10, 15, 20 years. And I'm still saying. Why can't I just go back to what it was. Right. And, you know, and, and, and maybe they feel like they're not in a position to evolve the way that they, that they, you know, run their business and B provide care, you know, to, to kind of keep up with that.

Right. And, and I'm, I'm extremely sympathetic to that. I'll say two things on this one is the first, one of the first pharmacies that got off the ground on provider status in Ohio was, uh, Franklin pharmacy in war in Ohio. Uh, the owner Frank Manos, I don't want to age him the wrong way, but I'm just gonna say, you know, let's say he's, he's, he's not that fresh outta school.

And, uh, my good, my good friend, uh, you walk in, it is a traditional, you know, Independent pharmacy wood paneling on the wall. You're in Steelers country banners all over the place. Um, and, and Frank is, is, is just a, you know, a man of the community, right? Like, and E everything that that community needs him and his team are providing this pharmacy was not even offering immunizations, uh, a couple years ago.

And it was very you know, um, the pharmacy of, uh, you know, maybe 10, 15, 20 years ago from an independent perspective. And I don't say that in a denigrating way at all. I say it in just, that is a pharmacy that is focused on its core services and a pharmacy that is focused on meeting the needs of its patients.

Right? And so when we brought this, brought this to them, it was United healthcare. That was the uh, insurance company that started paying pharmacists for clinical services. And when they put their list together of all the pharmacies in the areas where they had the highest needs. That one popped up.

And I remember thinking to my man, Frank, you know, I don't know if he's gonna do this. And I remember when I brought it to him, you know, it was some pessimism like, how am I supposed to, you know, figure out how to bill for these services? How do I feel confident in myself and my team to render these services for the largest insurance company in the world for patients that have huge needles in my pharmacy?

And I'll be honest, they were very pessimistic about their [00:50:00] ability to do this stuff. We're not dealing with PG Y 20 residents that are living, you know, at Franklin pharmacy. Um, you know, I believe that those things are that those residencies and those certifications can be helpful, but I'm also of the opinion that pharmacists know enough to be able to meet that challenge with, with a little bit of, with a little bit of education, not around the actual disease states.

I don't think that's necessary, although it's helpful. I think it's more about just walking through something entirely new and what they did is they, they killed it and I'll never forget all these fancy executives from United healthcare flew out, you know, from, uh, San Francisco and all other parts of the world and their fancy clothes and fancy shoes walking into this wood paneling pharmacy.

And I will never forget this. This is, this is, this was a hundred percent organic. This was kind of a new thing for them. You know, at the time all the spread pricing stuff was, bopping around in Ohio. They were, you know, very much, they didn't feel comfortable, you know, being around independent pharmacy at the time.

And I'll never forget. We were standing around talking about some of the things that they had envisioned for this program, getting to know the pharmacy staff and one of the guys, uh, who came in from United at one point, he stopped because he was listening to what was happening on the other side with the counter.

And he went up to the pharmacist and said, uh, excuse me, how did you know, how did you know that person? Because what he heard was somebody at the pharmacy say, hi, you, uh, you must be, you know, so and so, and. the person said, how did you know, how did you know that, that, that I'm that person I've never been here before?

And the pharmacist said, well, I know that because you're the only name I didn't recognize today. And the person from United healthcare was like, wow, wow. Like, unbelievable that this pharmacy has such a relationship with the patient that they know they, that the, that when they don't know somebody, it's the exception to the rule.

Think of how valuable that can be to an insurance plan. Who's trying to motivate patients to do, to, to engage in behaviors that might be better for their health and lower their hospitalizations, which is a huge priority for insurance plans. Again, I'm not here to say that, you know, United healthcare is gonna save, save this industry.

I'm not here to say that Franklin pharmacy is something materially different than anybody else. What I'm saying is, is. That pharmacy started there and they built up to something that they were, they were providing huge, huge value relative to what they were getting paid, using physician billing codes in order to actually provide these services.

Now, the other part of this is, if you're a pharmacist, who's sitting there still saying, you know that, Hey, I don't know if this is for me. I don't know if I don't know if this is a good trajectory for the profession, or if I don't know if I want to do this right. The question then for you is.

Do you believe whether that's the FTC investigation, advocacy by your state organization or your federal organizations, do you believe that you should put all the eggs in the basket of trusting that whatever it is, whether it's policy or advocacy, whatever it is, do you trust that the system will go back to the way it was, where you'll be paid a fair enough rate where you'll be able to have the time necessary to do all the things that you used to do and still put the same food on the table.

You did 20, 30 years ago. If you believe that by all means, keep, keep at it right at, at, at some point, this, this model's going to be fixed and you're gonna be getting paid $15 in margin, a claim in no time. Right. But I tend to be a little bit more pessimistic because until we get to that, that quantification of the value of that pharmacist service.

Right then we should expect that the current challenges and headwinds that are hitting the profession of pharmacy will only get exacerbated as consolidation continues, its March forward.

Mike Koelzer, Host: One of the worst people you don't want to be an employee of, or be on a board with them is someone that would say, uh, we've already tried that, you know, tried that before kind of thing but right now I'm gonna be that guy. About 25 years ago, we had our biggest, uh, healthcare HMO at the time in our town, they got a bunch of pharmacists together . There were probably 20 pharmacists in this room. We spent a whole Saturday and they were saying how expensive it was for somebody to go to the emergency room due to an asthma attack.

And they showed us all the figures and things like that. And they were showing us how we could play a part in hugely reducing their cost by I forget how it was set up. Like if we knew they were getting so many rescue inhalers or something, or if we [00:55:00] had them use this barometer or something, basically we were gonna save a ton of cost for them by keeping people out of the emergency room and just treat 'em with drugs. We spent a whole damn Saturday there and then we waited for this thing to come and it was like, eh, not doing it. and it was just so frustrating because we were so close and we knew it's obvious that a $10 inhaler is gonna be better than sending someone to the emergency room.

It was also obvious, there was no way around it, unless you brought mirrors and smoke into the room, which apparently happened in the time between our meeting and them saying the program was gonna happen.

But now with that said, I can't be looking 25 years ago and say we tried it once. And so that's not gonna work. That is not the answer period. You can't do that. So I just get to bitch about a little a year, but that obviously that obviously is not the answer. It's not gonna stay so either get out or get moving or do something, but that was just an old gripe.

Ben Link, PharmD: Like it or not, the federal and state governments are more involved in paying for medication today than they were 25 years ago. After you had the passage of a drug benefit in Medicare in 2003, enacted in 2006, right? You had all these seniors who take a lot of drugs now getting the drugs paid for not just by their wallet, but by their wallet and uncle Sam's wallet.

Right? And so today the dynamics of the finances of a pharmacy are more dependent upon what the insurer is paying than they were perhaps theoretically, back then. And a good example, we talked briefly about. you know, Antonio was saying, do you wanna place your bets on that you'll ever get back to the eighties and nineties worth of reimbursement.

Right? The truth is, we know what that reimbursement was, right? There's an OIG report that tells us that you were paid a hundred percent OFP back in the late eighties. Right. And so that's never gonna happen. No one's ever going to pay you a hundred percent OFP because we all know that that's not the price anymore. Um, and so, you know, when you, when you look towards past programs and their success, absolutely. We want to learn from them and ensure that we, you know, don't make the same mistakes we did then. Um, but it is not the same market that it was then either.

Mike Koelzer, Host: When you talk about mistakes, that's the frustrating part about knowing how expensive an emergency room visit is versus the $10. And you know that because of all the underhand, you know, gobbly go happen. Someone wanted that money in the system still 

Ben Link, PharmD: inhalers are just as, as messed up in their pricing structure as insulin is. Right. So, you know, it is, it is crazy to think that the, one of the solutions to the problem where perhaps there I say the most obvious solution to that problem is just make controller inhalers more affordable, right? If somebody can get their Simba court, their Advair, whatever, for $10 through their insurance, then they're not relying as much on the rescue inhalers, but the rescue inhalers are cheaper.

And so of course, they're gonna rely upon that more because that's the incentive financially you gave them. 

Mike Koelzer, Host: Antonio. You gotta have something.

That's up your crawl.

Antonio Ciaccia: Mike I've listened to your show and I've been on your show before. I know that this is taking the place of actual therapy sessions for you. Uh, But, you know, I, my, my, where I get bent outta shape is we talk about the push towards value based care, quantifying the value of the pharmacist, coming up with ways to compensate for that value.

I'd be remiss if I didn't point out how messed up our current quantification of value is today. Is that today, the entire drug distribution channel, and primarily how pharmacists are compensated today is through the practice of arbitrage, which is essentially taking advantage of an asymmetry of information and essentially making what we just very slop, typically call spread, buy it at one price, flip it for another don't necessarily disclose what you bought it for and what, what type of margin you you're getting in between.

That's not a pharmacy problem. That is the entire drug distribution systems problem. And so the problem for pharmacies has been that their means of compensation have been largely predicated upon the arbitraging of the product. You dispense the product, the PBM pays you, whatever they then flip it, they throw on their own markup.

And then, you know, we've identified all those problems with spread pricing, obviously Al already in the past and, and are continuing to do it today. Well, as we look to actually quantify [01:00:00] value, let's just pretend, let's say for the sake of discussion that the cost for a pharmacist to provide their services is $10.

And let's say. For the sake of argument that the value that they're creating with the dispensing service is actually more like 15. Okay. The problem is that nobody's actually paying 15, nobody's actually paying 10. Nobody's actually paying one actual defined price, except for your, maybe your state Medicaid programs where they're mandating it.

The truth is, that let's just say the pharmacy ends up netting out 15. The truth is, the pharmacy's getting paid three by somebody, five by somebody, 20 by somebody. 30 by somebody else, negative 15 by somebody else. So the truth is, we have a system that's predicated on price discrimination.

So when you ask, why are sometimes people upset with the bill they get at the end of the transaction, we could point fingers all across the drug distribution channel. We could point it at the drug maker. We could point it at the pharmacy and we could point at the wholesaler. We could point at the insurance company, then you name it down the line.

But the truth is, everybody's getting exposed to a different price on every single transaction. And so how difficult it must be to quantify value when we don't actually ever pay one uniform price for the same service across the And so as we have a system that's built on price discrimination, part of what we try to do. And our work is to simplify that transaction so that people have a better understanding of what lives underneath that last bill that they get at the end. Because until we have an understanding of what goes into the pot, what is, what, what is in that transaction, what we bought, how much we paid for it, and essentially try to assign a value to it.

We'll never be able to assign value to something that we haven't actually figured out what the components are in the first place. And furthermore, we'll never be able to incent the behavior we want to buy. If at the end of the day, somebody's making $4,000 on one transaction, negative 500 on another.

That's the bone I have to pick with the way PBMs, uh, work in this marketplace today is that we routinely see instances where essentially the same service that's being rendered from one provider to another one, drug to another is undervalued so significantly and overvalued. So significantly on the opposite

Mike Koelzer, Host: My favorite news source is mail online. It's from England, it's not stuffy England. It's just a good source of American news, but the problem is they have these damn popups on there. I would actually pay to get the popups off, but they're like 30 seconds long or something like that.

If each of you had like 30 seconds to come up on a popup ad and you had a group that was going to see this, whether it was all politicians or all pharmacists or all drug manufacturers or all the PBM leaders, you get 30 seconds with one group.

Who are you picking and what are you saying?

Antonio Ciaccia: I'll start and, and this, and you could argue, this is biased since we do some work for them. I would actually look to mark Cuban and I'll tell you why nobody pays attention to drug pricing. Everybody complains about drug prices. Okay. But nobody is actually interested in the details of drug pricing.

We love to, we love to complain and moan about the rising cost of pharmaceuticals, but when it comes to the rebates and all the things that drives prices up, everybody falls asleep. As soon as you say, the letter is a WP, right? Or P B M. And so what has mark Cuban done? And, people could take shots at how, how they're, how, how they're running things or when you know, whether mail order is good or not.

But one of the things I love about Mark Cuban is that he has cut through all this fog and made drug pricing. Interesting. Hell mark Cuban is on. From what I'm told, I'm not actually on TikTok myself, but, but people are TikTok about the prices of drugs at mark Cuban's cost plus pharmacy and Mike, this is no secret.

You've had 'em on a show, blueberry pharmacy. All right. We've had other cash pharmacies like freedom pharmacies in Ohio. Good RX has kind of shown us, you know, I'm not pitching good RX here, but GoodRx has shown us how insane some of the discounting is off of these artificially inflated prices at the pharmacy counter.

Right. See a $2,000 drug it's Xed out. It's $30 at your pharmacy. You know, we all know that this system is predicated off of artificially inflated prices, but nobody's really done anything to fix that. Right. So I would use Mark Cuban as the pitch band. Not because I'm promoting their pharmacy, but because he has done something that nobody else has been able to do, which is to take the really complicated, ugly side of the drug supply chain [01:05:00] in some.

Make it consumable and digestible for lay people. And I think he's done a really good job. Some of the art, some of the interviews I've seen him do. I mean, he's done a really good job talking about how look I'm able to lower lower the cost of medicines because I unplugged from PBMs and I unplugged from insurance companies the same way that Nate hucks is doing at freedom pharmacy, the same way that Kyle McCormick is doing at blueberry pharmacy.

And it's funny when, um, we were on the today show, back in, September and. In that story. What they did is they went to Freedom Pharmacy in Pickerington, Ohio, where Nate Hucks, who owns a traditional independent pharmacy, said, I'm losing my shirt. I can't control my prices. I'm gonna open a cash pharmacy right next door.

So the same owner buying the same medicines has materially lower prices at the pharmacy that doesn't take insurance versus the one that does. And so what a perfect juxtaposition, right? Nobody will sit down and learn all the intricacies, OFP. All the problems are spreading pricing and steering and all these things that, you know, Ben and I take time to help diagnose.

But if you fast forward the tape and you say, look, what, tell me why the system is so messed up with the juxtaposition of an independent pharmacy that takes insurance relative to one that has cash. What a perfect way to contextualize how insurance has offered us a false promise of lower prices. Certainly they are successful at negotiating lower costs for themselves.

But look at the incentives they have inserted into the marketplace that causes prices to go way higher than they otherwise would be. If they didn't exist in the first place, Mark Cuban would've been so good at preaching that message and doing it in such a way that people would respond to it. But it's no different.

The message is no different than what small, independent pharmacy owners who have adopted cash models have been doing all along.

Mike Koelzer, Host: So Antonio,with this 30 seconds, would you be there thanking mark? Would you have a mark in your place? What message do you want to get across 

in those 30 seconds on your blip?

Antonio Ciaccia: I would completely forfeit my time because nobody's interested or most people won't be interested in the bald guy with the last name you can't really spell or pronounce. Uh, I would forfeit it to Mr. Cuban. Not because he knows it better than me, but because more people will listen to Mark Cuban than they will to me.

All right. And it's less about who's doing it. Well, maybe it is about who's doing it, but it's more about the ability to connect with.

Mike Koelzer, Host: How about you, Ben?

Ben Link, PharmD: So with my 30 seconds, um, I would probably I'm torn between either trying to, to, to push my profession and talk to a bunch of pharmacists about, you know, extracting the value that I think is the, the untapped primary care and all that, or going to a bunch of insurance executives and being like there's a study out of USC, um, in March of this year that said that we all overpay for generic drugs, right.

Nine out of 10 drugs are generic. And so of course, if we have a spread or other sort of issue, it's generic pricing, right. Well, the more that things. Cuban or blueberry or freedom pharmacies gain traction. Right? The more that people begin to question the value produced towards, um, you know, what their insurance is actually buying.

Right? And if you are the person who is doing the long term strategic planning, right? You're the guy who's inventing the stuffed Croft's pizza, right? For your organization. At some point, there is going to become a breaking point, right? Kroger left good R's network because there was a breaking point over, you know, generic drug pricing effectively.

That's what GoodRx largely is. Right? At some point enough, people are going to sit there, looking at their finances, going to look. I don't care. If I lose three quarters of my business, I can make the same margin doing a quarter of the work. If I just go cash only, 

right. And give people just this stuff. And so if you are a Medicaid program or anyone who's concerned about access and ultimately your value of your insurance product is tied to access, you gotta figure this out, right?

You gotta figure out a way to make providers recognize that it's still better to work with you than an opposition to you. 

 At some point, the math is going to tell you to forgo it all. Open up a second pharmacy. I would be curious to know in three years, what the distribution of Nate's pharmacy business is between the let's do this through insurance versus let's do this, not through insurance. where I would probably go.

Mike Koelzer, Host: Guys, Thanks for coming on. Anybody that helps bring down the smoke and mirrors is on the right track in my mind. 

Antonio Ciaccia: Now thank you, Mike. I think the first time you and I talked, we were just coming out of the spread pricing stuff. You talked to Eric PackMan [01:10:00] and, um, we were just coming out of the spread stuff. And honestly, this was kind of a hobby more than anything.

We're like, well, let's blow some shit up and then, you know, that'll be the end of it. And, um, you know, I think we've come a long way. Um, for the, I mean, for the sake of the, the effort towards reform, , I wouldn't necessarily drink outta the cup of optimism just yet, cuz I am pessimistic that people actually follow through with solutions.

But, the degree of awareness around PBMs is just substantially higher than it was four years

ago. 

Ben Link, PharmD: Thanks for having us, Mike, I always enjoy listening to these on a weekly basis and I try to learn something from them and I've learned something, just talking with you all.

Mike Koelzer, Host: Keep it up. We'll talk to both of you soon.