If you lived in a perfect world, what would reforms look like?
Ah, well, if I were clean for a day, I would certainly look at the issue of plans taking
patient assistance.
So copic hearts are a very hot topic and certainly plans may not like them because they incentivize
patients to and allow patients to reach their maximum out of pocket much more quickly.
And certainly I'm not sure that I 100% agree with that in a better world.
I do think in a world where plans are getting really significant rebase, say in the example
of a drug being discounted to $69 for the plan cost where the patient is paying 400,
that becomes a very reasonable solution because the patient is paying so much more than the
plan.
And you know, if it is a very expensive medication and they've gone through prior authorization,
I really see that as a leveling of the playing field.
So first up, let's make sure patients have access to their copay assistance.
And next up, I've already stated, I really feel that eliminating discounts, rebates,
fees, all of these generally post-sale concessions would start to give us a much better sense
of what the market really is in the United States.
And I think I would be hesitant to go further than that because I don't know what that would
look like 100%.
And until I do, I don't want to say, you know, capping out of pocket at 10% like because
a 10% of a very large number in an inflated number is still 10% of a large inflated number.
If we can get that down to a reasonable price that, you know, say is closer to a price in
Great Britain where they can buy a GOP one for $100 per month where people here are paying
closer to $1,000, that starts to feel like a win for both employer's plans and for the
employee.
Now that may be a different situation in the fully funded world where plans are making
a lot of money and maybe premiums go up because they're not able to make as much money on
the drug cost.
For example, I saw one plan in Minnesota that made $12 million on their rebates.
So that's where I say it becomes so complicated to fully understand when you push a lever
what the outcomes are actually going to be.
So I tend to be very conservative when it comes to starting to say this is my policy
wish list.
I think transparency into what people are paying, how much is actually being paid, where and
when starts to be a very reasonable first step.
There was an analogy that you've used to help people better understand kind of what's
happening with rebates and copay cards.
Can you help us share that example?
Yeah, so I've used the Menards rebate example, right, where it's 11% off.
You feel like it's so great, but then you realize everything is already inflated by
at least 11% so you're not actually coming out ahead.
The other example that I like to use is spending money on a credit card so that you can get
points to have a free vacation and yet you're still spending maybe more money than you anticipated
on your credit card so that you reach this free vacation standpoint and maybe you end
up with more debt on a credit card because you didn't go and find the really super low
deal on a vacation and search that out and find it and pay that cost upfront instead you
felt like getting something for free was a really great deal or felt really good and
so you just continue to pay when maybe a savvier shopping mechanism would have just
been to say, all right, I'm going to go on all of these discount rebates, websites and
see what I can find, maybe go on kayak, explore and discover that instead of needing to pay
$10,000 to get $200 in flights, you could just pay maybe $100 as a discount or a flat
right out of your pocket. I want to address this idea that specialty medications could
potentially not be covered under certain self-funded plans. Yeah, so that's already
happening in a couple of different ways. The first is was really the rise of alternative
fundering programs and that's where you have a very clever shop set up and say, you know what
and I've actually heard this pitch, you know what, most co-pay assistance programs are most
most pharmaceutical companies have a foundation that will give free drug to most Americans,
like you know the cutoffs are pretty generous because there are people who don't have insurance
who make good money and so I'll tell you what employer, why don't you just stop covering
these specialty medications, pay us a fee, and we'll go out to these patient assistance
programs, we'll submit the application and we'll get your people the drug. Well, understandably
pharmaceutical manufacturers were pretty upset by that and they've really started to restrict,
so now what we're seeing is the rise of importation, so they'll go to the patient assistance fund
first, if that doesn't happen then they'll go to an international pharmacy and import,
which is legally interesting, shall we say. So and then the other piece is Kevin, who
may or may not appear later on, his plan got hit according to their pharmacy benefit
manager or PBM with a lot of high cost pharmacy claims a few years ago and so they've put in
place really, really strict and stringent pieces and so they are starting to, for example, he is
on a dual medication and he has one that is an inferior stronger than he has an oral, it will
in theory cure his leukemia in several months and his plan is not paying for one of those
medications and the really sad part of that is that he applied to the pharmaceutical manufacturer,
they believed they had one of these alternative funding programs in place, they did not and so
they denied his patient assistance fund and I believe that's going to become more and more
common as pharmaceutical companies tighten and fewer employers cover these medications. One thing I
do want to just raise is that specialty medications is a payment term, so often back in the day you
could have medications that required maybe more handling, maybe they required refrigeration or what
not, so pharmacy benefit managers and decided to call these specialty medications, maybe they managed
a complex condition or whatnot, but it was a way for them to charge more money for the services that
they were providing and so we've actually even seen an increase in specialty generic medications,
which is kind of an oxymoron because the I would say the American compact of how we pay for medications
is that Americans a while ago decided that they were willing to pay higher prices for immediate
access to medication and to not wait for the generic to come out which many countries do,
and in exchange for that when the generic did come it would be very very inexpensive,
but then you start to see these medications, these cheap medications like the nine dollar example,
be translated into a specialty medication that then inflates the cost by essentially 150 percent
and so what from a regulatory and drug development standpoint you have are a new drug application
which for most people you understand to be a drug, a branded drug, so like it has a special name
and it's only made by one manufacturer and then you have a generic that doesn't have a particular
name it's known by the molecule and it's also potentially made by money and so you know competition
comes in the price gets a little lower and so this concept of specialty has become very very fuzzy
particularly as it really only pertains to payment and reimbursement.
Got it. And talking about you know generics and patents that was something that Bill brought up
because some of his and Cole's asthma medication just before the patent is about to expire
they'll change one small thing yeah basically start a new patent and it won't the generic won't be
yeah it won't be allowed and I think you know if we go back to my regulatory wish list I do
think limiting patent extensions to actual molecule changes so changes within the actual
medication itself. Potentially dosing although that gets really complicated because sometimes
manufacturers and there's a great example in the cancer space I'm blanking on it will like
increase the dose of like to the maximum tolerability for patients even though it's not the minimum
effective dose and so sometimes they'll start and I was actually on a medication and it was
called Capaxone it's it's still available but they had me injecting every day and I think now
it's gone down to three times a week and so I do not want to incentivize a higher dose because
certainly that can be very very problematic because it increases side effects and you know
potential negative consequences you know the packaging things can change so like if you go to
a self-injection syringe versus just a you know manual syringe that can potentially extend a
patent so I think like those pieces are we're not incentivizing manufacturers to come up with
their you know best and final sort of immediately it's sort of the slave process of attrition and
you know human race a great example I think it had I think two or three times the amount of patent
life that it maybe should have and so I do think addressing how we patent medications and I mean
there may be reasons to offer certain medications all longer patent if the prices decrease so for
example cell and gene therapies I'm not sure we're ever going to see generic cell and gene therapies
because it's an incredibly complex process and it requires a lot of startup and continuous
manufacturing so for potentially rare diseases or other medications that we're not going to see
that price competition potentially offering reasonable terms now reasonable is obviously
in the eye of the shareholder that could drop the cost initially so that we don't see these
potentially three million price tags to facilitate access I think that's a very interesting proposition
but I think for Medicaid you know the medication that we've had be approved which are you know the
goal to have a huge blockbuster that's going to have all of these indications and you know
continue to pursue this in it you know indications that starts to feel very uncomfortable because
it's breaking the compact that we as Americans agree to which was to pay higher prices for a
granted medication while it's under a patent like and I think we mostly think of a patent as that
initial set term not the who's you know continuous renewals and then we get a generic that is much
cheaper and then can you talk about what went wrong with Cole's case so I'm not an expert on Cole's
but my understanding is there was a change of benefit plan and so when people change benefit plans
in theory welfare benefits managers so these employers should be providing everyone with 60
days notice when things are removed from the plan that's that's a federal statute the state
statute is also to provide notice but the the arrest plans are regulated at the federal level
and so they require arrest I require 60 days notice of changes I am not sure that anyone got that
in this particular case so when he went to refill his medication like many people after office hours
accessing a pharmacy because it's convenient and accessible he was told his medication was not
on formulary and they could be responsible for the total cost and when he requested a generic
there wasn't one available or he kind of accessed it at a reasonable cost so he went home without it
and had a deathly asthma attack only a few days later and I think this really highlights the fact
that patients can do everything right they can request the generic they can try and find lower
cost opportunities if they're in a position where they can't call their doctor because they're working
and they expect to go fill it up they're going to walk out of out of a pharmacy without that
medication and then getting a hold and I always like to say that if I have to go to a specialist
in a in a facility in in one of these large health systems it's going to take I mean they say 24
hours for an initial response and then it's probably going to take a little bit longer you know to
look at the formulary so you're probably talking two to three days in order to get a medication
issue sorted um maybe I'm being too long but I'll just say in my experience it usually takes two
three days to get any sort of uh it's and it's not because hospitals don't want to do a good job
it's just there's a lot of those messages and so I I get very concerned when I hear stories like
this that you know the expectation is always that patients should ask for the lowest medication
like lowest cost medication that's that's what we expect them to do and yet formulas and all of
this are sometimes created to incentivize the use of the highest cost medication to maximize
postal you know concessions like rebates or fees um
how difficult is it for patients and employers who are operating self-funded plans and maybe
they're not this massive company with their own people on staff yeah how difficult is it to
know what is right and what decisions to make well I would say even the large companies who
have a lot of staff still rely on brokers or advisors and uh brokers one of the things that
the Consolidated Appropriations Act identified and now requires is a thing called a compensation
disclosure and that means that your broker needs to disclose where all of their compensation is
coming from because what we sometimes see is certain brokers receiving compensation from
say the pharmacy benefit manager that they recommend and so I think in any other situation
I mean think about it sort of as a an agent who's representing both the buyer and the seller
and you know certainly you might wonder am I getting the best deal as either in that situation
because they're receiving compensation from both and so I think that's a really good analogy
for brokers who are receiving compensation both from the plan itself to retain their services
and give them good advice and potentially from the PPMs or the health plans or really whatever
that they're recommending you use and then sometimes there's even sort of back and compensation
where a broker might get a dollar per script so if you've got a really big plan that's very very
attractive right that's that's potentially a lot of money that's going but when I mean it's
economics 101 that money just doesn't appear out of nowhere that is packed into what employers
and patients are paying for their medications and all of that so it would just increase this cost
what do you think is most important for people to understand about everything we're discussing
that if you think you understand it add six more steps six more people who are trying to make
money off of one medication that maybe only has three true steps to pass from a manufacturer
to a far e-mail to a location and then go to a pharmacy that gives it to a patient whereas I
think there's probably up to 12 administrative steps for that same medication to get to a patient
so there's that I also think understanding that mostly whatever price you think you're paying is
the made-up number and for patients they're paying based on a list price that nobody else pays
and how should patients understand what to do and how to pick a good plan or or know what's
in their plan or do they have any choice I mean is are we a little bit hopeless I think it depends
I think I think right now it's a really difficult time I don't want to sugarcoat that for anyone
right now if you if your employer meets that minimum value standard of 60 percent you can't go
onto the marketplace and get subsidies so if they've chosen to laser out or otherwise eliminate
access to a drug that maybe keeps you whole and working the one option is to look at the
marketplace because the marketplace does require coverage of at least one medication in a class
so you could potentially not be on the exact medication but be on something in the same class
which may or may not work as well but you're going to be paying 100% of the undiscounted premium
and you know certainly asking your employer if you're in this situation where they make plan
changes you know what they are and asking for that 60 days notice so maybe you can prepare
and I do think you know trying to find alternatives I think Mark human is a great one because
I do think again if we're paying so much for even just generics if we start to bend that
cost curve in these areas that are easy we might not just realize savings but opportunities to
realign benefits with the interest of the patient I also think for self-funded plans looking at
the rebates that they're getting and potentially assigning those more to patients or sharing the
savings as it starts to potentially be reasonable I think it's very difficult for self-funded plans
to know that they're getting 100% of those post-hale concessions so it's very likely that those numbers
are still inflated for them you said mark Cuban mark Cuban mark Cuban yeah what is that so um
there's several of these popping up so there's the mark Cuban there's an Amazon pharmacy
um and then there's some just sort of national mail order and what they do and there's even
you know point of sale sites essentially what pharmacists have started doing is creating a cash
only business so they will give you the cash price that is potentially much significantly lower than
your paying on your plan and you know so there is the potentiality for you to get really significantly
discounted medications I get most of my medications through my primary care