AH075 - What Health Systems Need [From a PBM]: A Blend of Tech, Transparency, and Understanding, with Lindsey Butler, PharmD, and Chris England

Transcript

Lightly edited for clarity.‍

[00:27] Justin Venneri: Hello, and thank you for listening to another episode of the Astonishing Healthcare Podcast. This is Justin Venneri, your host and senior director of communications at Capital Rx, and I'm excited to have a follow-up episode of sorts today. We talked a bit about health systems and their unique needs last year on AH029 - Selling Pharmacy Benefits: Building Relationships & Meeting Clients' Needs - with Nick Van Hook.

With us in the studio today is Lindsey Butler from Lockton. She is Vice President & Clinical Pharmacy Consultant there. And Chris England, Vice President, National Business Development, here at Capital Rx. Lindsey, maybe start off, tell us a bit about your background and your role at Lockton, please.

[01:01] Lindsey Butler, PharmD: Yeah, thanks for having me today, Justin. I'm a pharmacist by background. So I started out my career my senior year of high school with an internship at a pharmacy - at my local independent pharmacy in my hometown. It's really where I fell in love with pharmacy. I knew I wanted to be a pharmacist, just seeing the impact that pharmacy was having on our community. I've spent most of my career on the dispensing side of things, overseeing retail and specialty pharmacies.

Prior to coming to Lockton, I was overseeing a lot of local specialty pharmacies for a large national chain. Many of those were inside hospital and health systems, some medical office buildings, and some standalone. We were really providing services for not just their patients, but their employees. We were servicing some 340B programs and really just any other services they needed for their patients. So, it was really those experiences that landed me here at Lockton. My pharmacy practice leader really recognized that our hospital and health system clients needed a different level of support when it came to pharmacy benefits. So, he convinced me to make the jump over here to start a practice really focused on healthcare clients, clients with their own pharmacies. And so that's what I get to do all day, every day.

[02:08] Justin Venneri: Awesome. And I can see with that background why that makes sense to have you there. Welcome to the show. Thanks for coming on. Chris, same question to you. Give us a minute on your background, your path to Capital Rx.

[02:19] Chris England: Yeah, so similar to Lindsey, I actually was working at a mail order pharmacy in college. I was a finance major, had no intention of being in the pharmacy business. But the more I learned about kind of how convoluted the system is, unfortunately or fortunately, depending on how you look at it, the more interested I got into the pharmacy benefit business. And so here we are 15 years later, and I've spent the bulk of my career kind of focusing on the pharmacy supply chain and trying to make sense of it. And again, thrilled to be here. And I just want to thank Lindsey very much for joining the show today.

[02:47] Justin Venneri: Yeah, I'm jealous because I've been here three years and change now, and I feel like you both will forget more in two seconds than I'll learn in the next two years. So, it's awesome to have you on to share what you know and what you're dealing with every day. So, you know, just to start off, Lindsey, you focus uniquely on health systems, as you explained, with all of the state and federal regulatory focus on reform that we read about basically every day at this point. What are you seeing and tracking out there that you're paying the closest attention to?

[03:13] Lindsey Butler, PharmD: Yeah, there's definitely a lot happening in the market today, I would say, for my clients, with the kind of fiduciary lawsuits with J&J and Wells Fargo, we definitely see a lot more questions around transparency and my clients wanting to have a little more control over their pharmacy benefits. I think we've seen a ton of things happening more at the state level. There are so many things happening in so many states. I think the most recent one, which is kind of one of its kind, which, no surprise, is out of Arkansas, Governor Sanders there really signed that bill that prohibits PBM managers from owning or operating pharmacies in the state. So we're really looking at that one closely to see how it plays out over the next couple months. It is supposed to go active 1/1/26. But really, how are those members going to be supported in the transition and making sure they're really cared for and we don't lose that continuity of care. So that's definitely a big one we're tracking.  

But then, additionally for my clients, because there's just so many facets to this for them, we're really watching some of the stuff coming out at the federal level around Medicaid reimbursements. They're already operating on such thin margins, and the implications of this bill could provide some more challenges there. And then also all the 340B changes that have happened. So we've seen just things happening regularly over the past several years. We want to make sure they're running compliant programs. And with all the changes that's been difficult to keep up with, and then more on the horizon. So lots of different things, not just benefits related that my team and clients are watching in that space.

[04:47] Justin Venneri: Got it. And Chris, you're out in the field all the time speaking with prospects and folks like Lindsey, talking to everyone at conferences. What are one or two key topics that come up that you're answering questions about or you think are particularly important to dig into a little bit?

[05:00] Chris England: Yeah, I think Lindsey hit on a couple of them, obviously with the state of Arkansas. And then we recently saw the governor of Louisiana try to do a similar bill prohibiting PBMs from owning downstream pharmacy assets. And so something we're keeping a close eye on there. One thing I would add is just there seems, especially at the state level, seems to be momentum picking up for reimbursement based on NADAC, which is the national average drug acquisition cost.

The state of Iowa being the most recent where they've basically passed a mandate where PBMs have to reimburse at NADAC plus a, you know, $10 and change dispensing fee. And so, you know, obviously Capital Rx is excited to see that. We believe in NADAC being kind of the best pricing logic that's available right now. And so just seeing that momentum is exciting as we continue to kind of work towards a more transparent market.

[05:44] Justin Venneri: Yeah. And I noticed you went ‘NAYDAC’ versus ‘NAHDAC’ [laughter]…

[05:49] Chris England: Yeah, maybe my Midwestern twang coming through.

[05:51] Lindsey Butler, PharmD: Justin. It's okay. I say NADAC, too. So you're good.

[05:54] Justin Venneri: I do too. I think it was Jessen [Joseph] that went ‘NAHDAC’ on me, and that just confused me. ‘Cause it's always about what's the better option right now. I know some other states do that, and we have to deal with making sure that the reimbursement is fair based on what the regulation is in the state. So it's good to be able to do that and to understand why they're doing it.  

Getting a little bit more specific, Lindsey, back to you. I'm definitely not trying to get too salesy here for us; Capital Rx, that is. But what are some of the key pharmacy spend-related issues that you have to work through with your prospects and clients. I'm very interested to hear what's top of mind and what challenges you're actively trying to address. And actually, if you want to take a step back, I guess it's interesting because health systems might want pharmacy benefits for their own employees, but they also might want a pharmacy benefit administration solution for their service line, Is that correct?

[06:41] Lindsey Butler, PharmD: Yeah, we're seeing lots of different wants and goals across the board there. So I think when we start with the first part of your question, just around pharmacy spend, I think the top things would be GLP-1s, anti-inflammatory medications, and then of course high-cost claimants - really looking at cell and gene therapy and some of these newer medications that have come to market for rare diseases that are just, just super expensive.

I don't think health systems are really any different in those categories. But what a lot of my clients are looking at with regards specifically to GLP-1s and I would say the biologics (Humira®, Stelara®, biosimilars, et cetera) is: is there a way that we could manage cost by driving to maybe our own acquisition price? Is there one that we should prefer over the other? Making sure all things clinically match up, but to try and control some of the cost on the pharmacy benefit. So I think that is kind of one piece there.  

I would say a lot of them are looking at it if there's something that we could provide to their local community with regards to potentially a different PBM offering that would be supported by the health system. So there's a lot of things in that space too that people are looking at.

[07:49] Justin Venneri: Have you seen anything creative or that's been particularly effective or interesting or anything - your opinion on the best way to go about covering GLP-1s or kind of arriving at a decision around covering GLP-1s?

Related Content

• Pharmacy Benefit Procurement: How to Ensure That Savings Materialize (eBook)
• Pharmacy Benefits 101: The Importance of the Network
• AH021 - Managing Pharmacy Costs in a GLP-1 World, with Bridget Mulvenna (podcast) & How to Manage Pharmacy Benefit Spend in a GLP-1 World (Blog)

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[08:02] Lindsey Butler, PharmD: I mean, that's like the million-dollar question, Justin.

[08:04] Justin Venneri: Of course, for sure. And we only have … I'm sure we could spend five hours on this.

[08:08] Lindsey Butler, PharmD: We could spend so much time. Yeah, I think the overall piece for GLP-1s, in the weight loss space specifically, of course, there's lots of new indications coming to market, so the conversation's not going to be over anytime soon. But I think what at least most of my clients are looking at because I think in the health system space versus the employer space, we're seeing a lot more coverage than not, because the members on the plan are also the prescribers who are writing these for patients.

And so it's an interesting dynamic that they want to also cover for the employee population. But what they're really looking at is how do we not just give them the medication but also provide the wraparound support. So are they getting nutrition counseling, behavioral health coaching, mental health? Because there's a lot of that in obesity. And so can we make sure we're giving them all the tools so that they can be successful for long-term health outcomes. And hopefully we don't take these for our entire life. So that has definitely been the hot topic for my healthcare clients - they're doing that potentially for their patient population that are coming to the health system. So, is there something we can do in the employee space to help them be more successful in their weight loss journey?

[09:19] Justin Venneri: That makes sense, especially with the actual clinical experience with it and the right way to sort of package that care. And of course, everybody's eager to see what the data look like. Does it help? How much does it help? When will we have that data?

[09:33] Lindsey Butler, PharmD: I know we're hoping we're getting closer. I mean, we have a lot of employers and health systems that were early adopters, started it when Wegovy® first came out about two and a half years ago. So I think we're getting closer and seeing some data. But the magic data, I don't know if anybody knows yet.

[09:49] Justin Venneri: That'll be exciting to see. Yeah, great. Chris, anything you'd add on that from the discussions you're having out there?

[09:55] Chris England: Obviously, GLP-1s are an ever-growing cost item, but it's also some folks are seeing tremendous impacts with the GLP-1s as well. And so I think the way  Capital Rx looks at it, much like the rest of our model, is we can kind of suit whatever our health system or client need is looking at. And we have several different ways that we can maybe curb some of the costs. If you are covering GLP-1s, whether it's looking at “refill too soon” refill logic that basically eliminates the need for folks building up huge excesses of supply with the GLP-1s which can really curb cost as well as, you know, maybe with the first couple fills, limiting the amount instead of 30- or 90-day supply to maybe just a couple weeks because folks do have kind of adverse initial impacts to them and we see a lot of folks drop off the prescription within the first couple of months.

[10:43] Justin Venneri: And Lindsey, I feel like I kind of interjected GLP-1s a little heavy early on there. You know, sort of the second part of my question, I asked one question. Sorry, I talk a lot. That's why I'm on this podcast, you know? I'd love your thoughts on just some other pressures or some other things like, I know your [Lockton’s] study recently, which we've referenced, shows that the pressures have built up to the point on employer plan sponsors where cost containment now kind of outweighs talent acquisition and retention.

These [health systems] are some of the larger employers in their regions, counties where the hospitals are. So that's probably a hard equation to wrestle with. Can you talk a little bit about that?

[11:16] Lindsey Butler, PharmD: Yeah, for sure. I think talent acquisition is going to be a big focus in the healthcare community for a while now. I think we're still too close to COVID and all the impacts it had on those who are on the front lines day in and day out. So they're really focused on, “How do we provide a really comprehensive, attractive benefit package while trying to control costs?” And I think the biggest thing, especially for those that are in communities where they are maybe the only hospital or they are one of the larger employers, is that they're not just fighting for talent for doctors and nurses. They also need janitorial staff and kitchen staff, that all the employers in town probably need as well.  

And so how do they provide that attractive offering for those folks, but also to attract physicians to come into the community to support from a clinical standpoint. So I think that is going to continue to be a focus for years to come on that. And that's why they're really starting to look at the full benefit package and what do they really need to support. And so, like I mentioned, how do we control some of that pharmacy spend as we're seeing it outpace medical spend these days with getting their hands more around the plan and having a little more control to be able to make sure they're using their dollars wisely.

[12:31] Justin Venneri: And sticking with you for health systems with their own pharmacies, like you mentioned earlier, versus those that don't have them and trying to expand out into the community and tie out the continuum of care, what's going on there? With all the pressure that you alluded to earlier on not owning distribution assets, you know, the big three or the vertically integrated model, how do you see that opportunity unfolding for providers?

[12:53] Lindsey Butler, PharmD: Yeah, so I think when I engage with a client, the utilization of their own pharmacy for a lot of things is usually the top focus. So how can we drive utilization in for the employee plan and then expand it out further to the community that's coming in their doors? So a lot of times we'll talk about what are their goals for that in-house pharmacy? Are we trying to start a mailing program for maintenance medications? Are we trying to bring specialty in-house?

And sometimes it's the opposite. They've been providing it to their community for years and then haven't been able to do it for their employees. So, looking for a partner that will allow that. So I think there's a lot of things there, and to be honest, a lot of them that don't own a pharmacy today, they're considering it. They're considering opening their own to be able to provide that for their community. They're looking at members or patients that are leaving the hospital and potentially not getting their medications that could have good health outcomes. So, if they could provide a pharmacy that could provide the service to make sure that they actually leave with those prescriptions is a big consideration for many that don't have pharmacies today.

[14:00] Justin Venneri: That makes a lot of sense. And like the most recent IQVA use of medicines report highlighted that pretty consistent, unfortunately, high abandonment rate. And that's probably the last thing we want to see. Especially if it's a, you know, patient of a health system and they know the doctor and they just kind of lose them when they go out the door instead of being able to help them follow up and get their medication.

[14:21] Lindsey Butler, PharmD: Yeah, a lot of times, too, they're on the same processing system. So we can get that like full view in that EMR, so can kind of help with some of what we like to call “the leaky bucket” in pharmacy - those that don't get filled.

[14:33] Justin Venneri: And Chris, functionally, I know from our call with Kasi [Ortiz], we can set up networks for clients in unique ways. Forgive me if this is also a captain obvious question, but what's important about that to health systems or health plans more broadly, from a just, you know, unbundling or benefit administration perspective?

[14:52] Chris England: Yeah, I think in terms of incorporating this in the conversation, like we are aligned 100% with the health system market because we don't own any downstream pharmacies. Right. So I think that's point number one is we don't own any retail pharmacies, any mail order or specialty, and we just charge a transparent per claim fee.

[15:07] Lindsey Butler, PharmD: Right.

[15:07] Chris England: And so we're not making money on those, which incentivizes us to fit what the client needs. And so when we look, look at approaching the health system market, our technology as well as you know, you mentioned on your conversation with Kasi, but we're able to build in unique networks very quickly for folks and make sure that they are covering that leaky bucket that Lindsey referenced and then our cloud-based adjudication platform, Judi®, also provides real time reporting too. So, I know Lindsey mentioned, that's very important to get back, and it's something that the health systems can access through Judi.

[15:36] Justin Venneri: Lindsey, anything you'd add on that point?

[15:37] Lindsey Butler, PharmD: Yeah, I think the other thing that a lot of my health system clients are looking for - not just with like an in-house network - maybe a custom copay tier for those, but also could we set up our own reimbursement structure to the in-house pharmacy? So I alluded to a lot of them are trying to capitalize on their own ability to acquire these medications. Some of them want to pass on that actual acquisition cost to the health plan. And so being able to kind of have that custom reimbursement schedule is important to a lot of my clients as well when it comes to that custom network.

[16:09] Justin Venneri: That's an interesting point. Okay, and is there anything different or notable about how benefit programs end up getting like the RFP process, how they get set up, and having those clinical resources that we talk about? You know, maybe they can make different decisions. They could potentially understand how drug mix impacts things or how those clinical decisions can influence the costs, and they can compare their options, I guess, better than the average employer. Can you talk a little bit about how you help people work through the RFP process?

[16:38] Lindsey Butler, PharmD: Yeah, so I maybe take a different approach. When I start out the RFP process with my health system clients. I really want to hear from all the key stakeholders on what they're truly looking for in a new PBM partner. So that could be CEO, CFO, who wants to make sure we have good pricing, Director of Benefits, want to make sure that our people are taken care of. You know, minimal disruption, but can we find some savings? But then, I also spend a lot of time talking to the pharmacy team. So, directors of pharmacy, pharmacy managers, sometimes 340B or purchasing managers come to the conversation because they're the ones who are dispensing the medications and really ask for, “What's your wish list? If you had a magic wand, what would you want out of a PBM partner?”

And a lot of times it's more than just great pricing. It's I want to drive to my in-house pharmacy. It's I want more access to the information about my rebates. I need great technology and customer service not only for our members, but the pharmacy team has to call in, too. And they need to be supported to be able to efficiently process these prescriptions for members. So it becomes a lot more of a capabilities discussion, and that they didn't realize that there are new vendors in the market that might support in a different way. I mentioned I spent a lot of years dispensing. I really just knew those PBMs that I dispensed are for every day, but there are so many in the market today that are really trying to offer different options. And so then I'm able to understand their goals and objectives and maybe future goals.

So maybe specialty isn't a goal today, but we have it on the track to become URAC-accredited in the next year. And so we want that to be a future option for the health system. So then when we go out to market we can look at vendors that will support those in different ways. We'll still do the financial analysis to see what that looks like across the different bidders, but as they want to drive more in house, as they want to set their custom pricing, the financials become not much of a differentiator because we're hopefully getting similar pricing across the board and we spend more time on those non-financial pieces that they really want out of a vendor. And I find that a lot of times the final decision isn't necessarily on price, it's more on how do we get the capabilities we want to help us with our long-term goals.

[18:57] Justin Venneri: That's great to hear. I really, I need to follow up with a couple of my colleagues, Josh and Nick on our proposals team to do a what's Best in RFP Process Land podcast. And we have some good questions that I think we could kind of lay out there for people to consider. And it sounds like you do a great job of getting in and understanding what the wants and needs are and trying to balance those and get answers to those questions. Who can do it? Yep. Chris, anything specific you're seeing relative to unique needs or asks during, you know, a proposal process that you'd want to highlight?

[19:26] Chris England: I think Lindsey covered the gamut there. It's a tough thing to follow up on because she covered kind of a lot of the topics I was looking at is building the custom reimbursement logic with, with the networks. Right. It's something that we specialize in as well as like the technology piece Lindsey mentioned, kind of the rebates. Our team again doesn't make any money on any pharma manufacturer revenue. And so we're able to transparently show if you want to customize or make a change to the formulary. Our team does our best to show that economic impact.

And what that can look like and then provide reporting back to you on a consistent basis. And then the other piece is just the customer service. I know Lindsey mentioned working with a lot of pharmacies,  and that's one thing we really take pride in, is being able to solve questions the first time a pharmacy may call in to the Capital Rx customer service team. And so, you know, we have a very high NPS score. And it's why we've seen a ton of growth in the health system and health plan market. And so really, I love saying this, but Capital Rx is designed to kind of suit the needs of our clients, and we can kind of build a model based on, you know, those wants and needs that Lindsey was referring to.

[20:27] Justin Venneri: Okay, and last question for both of you, and I'll start with you, Lindsey. What is the most astonishing or surprising thing you've seen, or maybe what's the biggest opportunity, if I put a twist on it, that you see, for providers/health systems to improve the pharmacy and health benefits and related services that they provide their members and communities? That's safe to share, of course - I have to throw in the compliance angle there. I know you've seen a lot over your career, so just a safe one!

[20:48] Lindsey Butler, PharmD: Yeah, yeah, yeah. No, I think that the biggest opportunity that I have found, and I think to no fault of their own, because I even coming to this side of things, have learned so much is just in the health system space with providers writing the scripts for the members, the pharmacy dispensing for them to really understand what all the decisions they're making and taking and how it applies to the benefit plan. So I'll, you know, talk to pharmacy directors and they're always thinking about it from their side, from how it's going to show up on the dispensing side. And sometimes I have to remind them, like, “Hey, we have our HR hat on today!” How is this from a fiduciary standpoint on the health plan translating? And so we want to make sure that we're not just making total decisions that maybe benefit the pharmacy, and how does that offset the health plan?  

The best part is we're keeping it all in-house, but just making sure we're making those good decisions. And then I think on the flip side, from the providers, them even understanding because a lot of times they're not doing prior authorizations, but how do their prescribing decisions impact further down the line? And I think my grandiose goal in life is how to make access to medications easier for our patient populations to make their lives healthier. And I think if we could close that full loop for them to fully understand it all, not only will it help the health plan, but it could also help our overall health system.

[22:08] Justin Venneri: Again, it's amazing. It keeps coming back to that. Even within the health system, the silos exist, and you kind of have to break down those walls so that everybody can see across and understand the ripple effects of their decisions. It's. It's fascinating.

[22:22] Lindsey Butler, PharmD: Yeah.

[22:22] Justin Venneri: Chris, how about you tell us a good story to send us off that's safe to share based on your experience and our discussion today.

[22:28] Chris England: Yeah, I think the topic that comes up is, just because it happened recently, is I was in. I was at a conference in Ohio last week, and it was a really cool setup. They had kind of a roundtable set up all across the conference room, where there were folks from different aspects of the industry. Right. So myself, you know, being a PBM, there was a health plan, health systems, there was local independent pharmacy owners, deans of pharmacy schools that are looking to figure out how they can train up and coming pharmacists. And we spent a lot of the whole day really talking about some of the issues in the pharmacy and PBM space.  

And I just walked away - my main takeaway was just huge amounts of encouragement because we let off our discussion with all the things that are happening at the state and federal level, but also, there's just a tremendous amount of great people working to kind of improve the healthcare ecosystem. And so it was just a really inspiring day, just to hear different perspectives and how folks are thinking about things. And I'm starting to see more and more alignment and just a tremendous amount of momentum. I'm really encouraged to kind of think of what it could look like three to five years from now, and hopefully just bringing more transparency, and like Lindsey said, folks getting their medications to make them healthier.

[23:31] Justin Venneri: I love that. That's a great way to end the show. Well, Chris and Lindsey, thank you so much for joining me today and I look forward to staying in touch.

[23:38] Chris England: Yeah, thanks again for having me.

[23:39] Lindsey Butler, PharmD: Thanks as well.

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