Best of '25! Best of '25! AH048 - High-Cost Orphan Drugs, Securing Claims Data, and More, with Dr. Eric Bricker

Transcript

Lightly edited for clarity.‍

[00:22] Justin Venneri: Hello and thank you for listening to Astonishing Healthcare this year! We're closing 2025 out with our final "Best of!" episode - and this one is with none other than Dr. Eric Bricker, who continues to produce entertaining and educational content through his AhealthcareZ YouTube channel… in Episode 48, we talked about the importance of getting and using plan data, and about high-cost drugs… two topics that remain super relevant. I mean, we just saw the first oral GLP-1 approved, and the price points we see for newly approved drugs show no signs of moderating... and embedded in almost every PBM reform bill - whether it's at the state or federal level, is some language around reporting requirements.

We’ll be back next week with new content for 2026, and we are beyond excited about what’s in store for the New Year, so you’ll want to keep an eye out. Before I sign off, I’ve got to say thank you to Keith LaFountain for his help producing this podcast this year - couldn't have done it without you. And, then we must say "Thanks!" to all our colleagues who have joined us in the studio, some more than once - you know who you are - and we are so very appreciative for our external guests, too - thank you all so much for your time and willingness to come on the show and share your diverse perspectives on issues related to the business of healthcare and health benefits. Okay, enough setup from me - on to Episode 48. Happy Holidays everybody!

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Hello and thank you for listening to this episode of the Astonishing Healthcare Podcast. This is Justin Venneri, your host and Director of Communications at Capital Rx. We have a guest today that many listeners may know from his AHealthcareZ videos, and Dr. Eric Bricker has a wealth of experience working with companies in and around employee benefits and in medicine. So, I'm really happy to have you on the show, Dr. Bricker. Thanks for joining me today.

[02:01] Dr. Eric Bricker: Justin, thank you so much for having me. And thank you to all the listeners for tuning in.

[02:04] Justin Venneri: So a couple of your recent videos caught my eye, but I have a couple of questions for background that I think everybody wants to know. I know I want to know, and I think it'll be helpful and interesting to talk about those videos – access to health plan data and expensive drugs, which I'll link in the show notes. You know, cell and gene therapies and such. But you've seen a ton over your career. You've worked in a variety of settings. I think you've been doing the AHealthcareZ videos since about 2018. Is that right?

[02:30] Dr. Eric Bricker: That's right.

[02:31] Justin Venneri: Walk me through it. How'd you start? You left Compass at that time. Can you tell us a bit about your background and what you were doing?

[02:35] Dr. Eric Bricker: Sure. The very quick version is I actually originally started out as a hospital revenue cycle consultant before going to medical school. So, I was back in all the billing and the claims back in the 90s and still wanted to become a doctor. And so then went on to medical school at the University of Illinois at Chicago and then residency at Johns Hopkins in Baltimore.  

And I actually started Compass as a healthcare navigation firm with some business partners in Dallas during my residency. And one of the gentlemen was somebody that I used to be a hospital revenue consultant with. And so after I finished my residency, I moved down to Dallas, and we grew Compass to over 2,000 employer clients and about 1.8 million people that we helped with our navigation service. So people would access Compass through their job and we would help them with their insurance issues or with prior authorization or with finding particular doctors. We basically did all of the paperwork in healthcare. We did everything except make the clinical decisions. So all that was between the patients and the doctors, and we would take care of everything else.  

And then we sold that business in 2018, like you said. And so I had seen so much both clinically at the patient bedside and in the hospital, and I had seen a lot on the financing and on the employer side and on the insurance side, and I thought, okay, well I'm not beholden to anybody now, so I can just kind of shoot people straight in terms of kind of what I've seen. And it really just started as a hobby or one of these like passion projects. And I started making these videos and posting them on my AHealthcareZ channel on YouTube and on LinkedIn. And like, you know, six years later I got like 100,000 subscribers across both platforms.  

So people have enjoyed the content. Thank you everybody for watching.

[04:11] Justin Venneri: Yeah, it's pretty awesome. And it's amazing. A lot of it's “evergreen.” Because a lot of the questions and a lot of the issues, they persist, right? Like things are slow to change, but then sometimes they change fast. Right?  

So let's start off with high-cost drugs. I'll again, I'll link that video in the show notes so everybody will have access to the full thing. Generally, your videos are like 10 to 15 minutes, right? Plus or minus? You were focusing on orphan drugs here. You know, what's the key question you were trying to address with high-cost drugs and orphan drugs, and how are you explaining it to people so that it's understandable -- the issue with covering them, that is. Because everybody's trying to figure out like gene therapies are coming to market, the FDA is approving more of them, they're more expensive.

[04:50] Dr. Eric Bricker: That's right. And so really sort of my experience is for employer-sponsored health plans. And you know, the majority of people in America get their health insurance actually through their job. It's about 60% of Americans get their health insurance through their job. And so historically the prescription costs for an employer-sponsored plan, it was about 20% of the total health care costs, with the other 80% being like the medical expense for the hospitals and the CT scans and physical therapy and all that stuff.

And really just within the past three or four years, the pharmacy spend has become a larger percentage of that pie. So it's actually pushing closer to like 30%. So, it's still a majority medical, but for a lot of major health insurers, it's now like 27%, 28%, 29% of their total spend. And so now only like 70%-71% is medical. So it's becoming a much bigger piece of the pie.  

And it's becoming a much bigger piece of the pie because there's been this growth of medications that fall under specialty pharmacy. So, when you think about the cost of your medications, where you're going to look is the specialty pharmacy because that's where all the costs are. And it stratifies, right? The vast majority of prescriptions that a health plan has are generic and only around single digits of the actual prescriptions are actually specialty pharmacy. But they make up the lion's share of the expense because these medications are incredibly expensive.  

Sometimes they're $1,000 a month; sometimes they're $1,500 per pill. I mean sometimes these treatments are half a million dollars a year for these medications. And so, there's really sort of the intersection of a couple of things that cause this to happen.

[06:30] Justin Venneri: I have a quick question for you. Sometimes I hear like 2% of claims cause upwards of 50% of the cost of the pharmacy benefit. Can you just unpack that a little bit for listeners? Like is it just the definitions of what's a specialty drug? Or like why is that?

[06:45] Dr. Eric Bricker: That's right. Oh, but Justin, you're opening a whole can of worms here! Basically what is a quote unquote “specialty medication?” So these are medications that historically were like self-injections, or they needed to be refrigerated and so they required really special handling.  

What the PBMs, the pharmacy benefit managers have done is they basically started to classify basically just like any really expensive brand name medication, they just like decided that it's going to be specialty. So a classic example of that is there's HIV medications that are pills. Like, you know, they're totally stable. They're not anything special like any other pill like Tylenol that you'd get. But they're incredibly expensive and so they call them quote unquote “specialty” just because they're expensive. Now why would they do that? It's because the PBMs themselves own mail order pharmacies that the provision of the contract with the employer is such that it requires the employer to get the specialty medication from the PBM's own mail order pharmacy.  

So the reason why they quote unquote classify things as specialty pharmacy is because they want you to then fill it at their own pharmacy and not fill it at another pharmacy. So not only are they making money through the transaction fee from the PBM, but then they're also making the spread from the pharmacy. What the pharmacy would normally have made. Now they, the PBM make because they own the pharmacy as well.

[08:10] Justin Venneri: I know we kind of got off a little off track there.

[08:14] Dr. Eric Bricker: I know you're like, “Sorry I asked about that.” [laughter]

[08:16] Justin Venneri: That's the subject of a lot of the legislation and the reform initiatives.

[08:21] Dr. Eric Bricker: That's exactly right. And so it's really the intersection of patent protection in America. So these medications have exclusivity for 17 to upward 36 years. And so there's a monopoly. And then when the Affordable Care Act was passed in 2010, one of the rules was, was that there was no longer a lifetime max benefit for health insurance plans.  

So historically, health insurance plans, they would only cover like $1 million or $2 million for the entire time the person was on the plan. And so the pharmaceutical companies always had this like ceiling that they couldn't go above because they're like, well, we can't really charge people more than their insurance is going to cover over the lifetime of the policy. And so then when they got rid of that, they're like, well, shoot, why stop at $1,000 a month? Why not do $20,000 a year? Why do $20,000? Why not do $200,000 a year? Why not do $2 million a year? And guess what? That's the record -- right now there is a therapy that costs $2 million a year.  

And so like, why stop at $2 million if there's no lifetime max and the pharmaceutical companies have a responsibility to their shareholders to make as much money as humanly possible? All they're going to do is keep increasing the prices.

Related Content on Managing Pharmacy Benefit Spend, Access to Claims Data, and Running a Pharmacy RFP

• AH030 - Plan Sponsors Need a Source of Truth; Get Your Data Now & Find It, with Jeff Hogan
• How to obtain Rx data and what to do with it
• AH093 - Health Benefits that Work for Everyone: Aligning Incentives & Focusing on Members’ Needs, with Susana Villegas Spillman
• Why Savings Don't Materialize: The Truth About Pharmacy Benefit Procurement eBook

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[09:27] Justin Venneri: Got it. And so, based on your experience and your opinions, of course, how can or should employers think about this quandary? And what do you think they need to know since they're the ones paying, as you mentioned, and they're dealing with the other side of the equation, which is rising prices for these things. What would you suggest?

[09:45] Dr. Eric Bricker: Yeah, it's a great question. And as always, the answer in healthcare is: it depends.  

So to a certain extent, it depends upon the size of the employer. And so for, one, if you're a fully insured employer, just know that all that cost is going to be spread out and it's going to be just injected into your premiums. So when you see your renewals coming in at 15%, 20%, 35%, a lot of that is because of this pharmaceutical inflation. Okay? And until you go self-funded, frankly, there's not much you can do about it. You're just pushing the easy button. And you're like, look, I'm willing to pay a lot of money just for it to be easy.  

But once you become self-funded -- and most groups, you know, as soon as you get around 100 employees, you can start thinking about being self-funded -- is when, what a lot of employers are doing is they are joining reinsurance captives because for very large cost claimants and for very high costs, they'll still buy reinsurance on the back end. And when they buy that reinsurance, they're typically doing it through an insurance captive, in other words, where they pool all the risk together with a bunch of other employers.  

And the reason they do that is so that if you have a member -- an example of this is like Trikafta, which is a medication for cystic fibrosis that costs about $200,000 per year. Historically, if you had to buy reinsurance on your own, the reinsurance company would just be like, look, we're going to quote, unquote, laser that cost to say that, look, for next year you have reinsurance, but not for Trikafta, because we're lasering that out; you're not going to get coverage for that. And so that's obviously very bad for the employer because then they have to start paying the $200,000 themselves.  

And so by being a part of a captive, there are insurance captives now that don't have those laser clauses. And so that if you do happen to have one of these really unfortunate situations of people on your plan that it doesn't cause you to have that person lasered out of your stop loss.  

Okay, that's fine if you're like, you know, say an employer up to like 500 or 1,000 employees. But if you're a big nationwide employer, referred to as national accounts, typically you're not joining an insurance captive, okay? And so there you might not have reinsurance at all. It's actually fairly common for very large employers in America to say, look, we're not going to pay premium for reinsurance. Like, we're going to take care of any large claims ourselves because we've got the budget to be able to do that.  

But they still need to have a cost control mechanism. And so, this is where a lot of these employers will do a handful of things. A lot of times people that qualify for these specialty medications are actually disabled. And so, they can then get on disability, which would then put them on Medicare coverage.  

It's essentially akin to like someone being on dialysis. And after being on dialysis for about two or three years, then the person goes on Medicare and they're no longer on your plan. So instead of the government paying for your dialysis, you would think of it like the government then paying for that specialty medication.  

Now that requires a concerted effort and a strategy on the part of employers to actually do that. But it's totally unrealistic for an employer to foot the bill for that. And it really requires a huge entity like the government in order to be able to cover that type of risk.  

Now another alternative that is highly controversial is when employers that are self-funded in their plan documents, they have a fair amount of flexibility in terms of what they do and do not cover. So, there could be certain medications or treatments that they just decide to not cover as a part of their plan. They call these prescription assistance programs or PAPs. And this is where the person then says, okay, I no longer have insurance coverage for Trikafta for cystic fibrosis. And then they can apply to the patient assistance program from the pharmaceutical manufacturer, which is specifically created for people that don't have insurance. And yes, they have insurance, but they don't have insurance for that.

[13:39] Justin Venneri: Got it.

[13:40] Dr. Eric Bricker: And that's where the pharmaceutical companies have come back and they've actually tried to sue the employers for doing these types of approaches. There are vendors out there that help people, you know, to sign up for these programs, et cetera, et cetera. That's another option as well.  

And then the final option is, right now we have Medicare coverage for things like end-stage renal disease, for things like dialysis. But -- and listen, dialysis costs less than $200,000 a year. So here you have individual medications that cost more than dialysis does. And so here the federal government has said, look, if you're under 65, dialysis is so expensive that we're going to cover it as part of Medicare. Well, what makes dialysis so special? Like why doesn't it apply to cystic fibrosis? Why doesn't it apply to muscular dystrophy?  

So arguably there is lobbying and advocacy that should be done on the part of employers to be like, look, Medicare, if you're going to cover dialysis, then you need to cover these other things too, because you as the government have much more negotiating power with the pharmaceutical companies than we do.  

And so that was a much more long-winded answer than you ever wanted. But I'll stop with that.

[14:52] Justin Venneri: No, it's great. I am curious, and this is another can of worms and it's probably for a separate episode. In the same vein, I mean given your experience, I think it's interesting because of the navigation angle and just experience helping members deal with complicated conditions like chronic conditions. Where I'm going -- GLP-1s, of course.  

Now this is like a totally new class of medication covered for diabetes by most everyone completely and then weight loss and CV risk. And the expectation is that this will be approved for many, many more indications. And they're not cheap, and there are questions about adherence and things.  

Can you share your thoughts on what employers can think about in terms of their coverage of GLP1s for additional indications in the future for their members? Because I know members are asking for it, but not all employers are covering them.

[15:40] Dr. Eric Bricker: Great question. The GLP-1 medications are expensive. Now they are much less expensive than these orphan disease medications, right? So here, depending upon the PBM or the discount, et cetera, et cetera, maybe you're talking anywhere from $800 to $2,000 a month. So you're talking anywhere from $10,000 to $24,000 a year. Which is still a lot of money because arguably if you used it for everybody who qualifies because they are obese, then you're talking potentially two-thirds of your plan members. So it might not be half a million dollars a year, but the percentage of your plan members who would then qualify for these medications is much larger.  

So that being said, again, the solution, the first sort of node or fork in the road if you will, is are you fully insured or self-funded? If you're fully insured, you really don't have any choices. The PBM is just part of your plan and so overall, your year over year premiums are going to go up significantly in part because of the extra GLP-1 cost that's just baked into the loss ratio of your own employer and then the other employers that you're pooled with.  

Now if you're self-funded, the self-funded employers have taken a variety of approaches and so there's no one size fits all. Again, it depends. Let's go from the most restrictive to the least restrictive. The majority of employers will cover GLP-1s for diabetes. However, they require prior authorization with lab documented diabetes. In other words, they are requiring a hemoglobin A1C value in excess of 6.5 or 7. It's not just the doctor writes a prescription for Ozempic and, oh by the way, you have an ICD-10 code for diabetes; you're covered. No, that's not what they're doing. They're like, no, you need to have an actual lab value that is submitted that is consistent with that. Okay, so fine.  

Now for weight loss independent of diabetes, it's actually only about 2/3 of self-funded employer clients that actually even cover it. So there's a significant number -- and that one third that don't even cover it for weight loss separate from diabetes, that one third is actually growing. So there's a number of employers are like, look, like we're just not going to cover it because we just can't afford it. I mean, we get that you may need it, we get that it's important. But then what's interesting is that there are now like cash options for these medications that are going for like $100 - $250 a month. So ultimately, if the person actually has to pay out of pocket for this, it ends up being a lot less than if the employer plan had to pay for it. That's like the most restrictive: we're just not going to cover it.  

Now other employers have been a little bit more open to paying for GLP-1s for weight loss independent of diabetes. But what they've said is, again, it's sort of like a lifetime max. We will cap the amount that we will pay for this medication for a certain amount for the time that you're on our plan, right? Because most employees in America, they're only with their employer for anywhere from 3 to 5 years. Yeah, some people stay for 20 years, but a lot of people only stay for one or two years. And so an example of that is like the Mayo Clinic for their own employees, for like the nurses and the techs at the hospital itself in Minnesota and in Florida. And along those lines, then there are also specific BMI requirements because the actual definition of obesity is a BMI of greater than 30. But overweight is 25 to 30. And so like if the doctor wants to prescribe a GLP1 for somebody who's got a BMI of 24 or 25 or 26, they can totally do that. But there are employer plans that are saying, no, you have to have a documented BMI in excess of 30.  

Or some employer plans are saying, look, if you're just obese, we're not going to pay for your GLP-1. But if you're what's referred to as hyper obese or super obese, in other words, having a BMI greater than 40, then we'll pay for it.  

But what's interesting is the pharmaceutical manufacturers have said, if you put in a BMI requirement, essentially decreasing the amount of people who are eligible for our medications, then we will not give you the rebate payments that we give to other employers that don't have a BMI requirement.  

And so for a lot of employers, they're like, oh well that's, you know, X tens of thousands of dollars a year. I'm not going to do that. So that is TBD, that's kind of up in the air in terms of what individual employers have or have not decided to do.

[20:13] Justin Venneri: Okay. And that all makes sense. So, the other video, because we have limited time here and you have lots of content online, I definitely want to highlight the access to data video you did. That one caught my eye because it comes up a lot often in relation to frustrations that clients have with traditional or vertically integrated players in the space. And we've seen some lawsuits with other carriers. It's like, it's my data, right? Like, why can't I have access to my data? Like, you know, hide the ball, so to speak.  

Can you talk to me a little bit about how employers can set up processes to review their vendors and review their data? I mean, under the Consolidated Appropriations Act they have to, right?

[20:51] Dr. Eric Bricker: For self-funded employer plans, this is not new that -- the original legislation that passed that allowed employers to set up their own self-funded health insurance plan is called, called ERISA, passed back in the 70s. It says that the health plan must be fiduciary to the plan members. So believe it or not, an employer health plan is actually responsible to the members. It's actually not responsible to the employer. It's responsible to the members by law.  

This is where clarification around that in the Consolidated Appropriations Act of 2021 saying okay, well there are certain things that you need to do as an employer to sort of show that you're acting as a fiduciary in your plan members’ best interest. Like if you have, you know, consultants or vendors and you need to have them disclose if they're getting any commission from insurance carriers, you know, yada yada yada. Which you know, one would assume would be part of fiduciary responsibility. But Congress spelled it out.  

Now as part of that Consolidated Appropriations Act of 2021, they also said that the plan must keep more detailed track of how the plan funds are spent, i.e. through claims data. And they make the employer responsible for this such that if they do not do it, the plan members could have recourse against the employers. They could essentially sue the employer for being like, look, you're asleep at the wheel, you're not getting your data.  

So they wouldn't sue the insurance carrier or the PBM, but they would sue the employer for not getting it. So now the employer is in a tight spot because historically when they've gone to the carrier, the PBM to get their data, the carrier and the PBM has said that information is quote, unquote, proprietary. We can't give it to you.  

And so now if the employer says, okay, I can't get the data from the carrier, what does that do to me, the employer? It opens me up to liability to the plan members to sue me.  

And so there's a couple of things that the employers can then do. They can either threaten RFP to the carrier in the PBM and be like, look, if you don't give us our data, we're going to put this out to bid and we're going to find a carrier in a PBM who will give us our data. Or two, they could actually go ahead and do the RFP, right? It's one thing to threaten the RFP and then you don't actually go through with it because the carrier capitulates, or you actually have to go through with the RFP.  

And then the third step is -- because interestingly, a lot of employers are like, well, we don't really don't want to change carriers and so we don't want to do the RFP. And so instead they're just suing their existing vendor, they're just suing their carrier. Which is, listen, every situation is unique. And so that was the, that was the experience of these two unions that were in Connecticut. They had Anthem. There are other very large self, self-insured employers that I've spoken to who've gone through that exact same process. And they just put it up for RFP. You know, you could be like, oh well, it's such a pain to go through RFP or whatever. But listen, when they went through RFP, they're like, this is the data that we need. This is the frequency, these are the fields that we need. This is part of the RFP. And they switched carriers, and when they switched carriers, they got everything they wanted in terms of data disclosure.  

[23:51] Justin Venneri: Interesting. Yeah, that's what Jeff Hogan was describing on an episode with him regarding how to go about doing this. He was saying to leverage the RFP process and the timing, to say, hey, this is our data, we need the data. And so that his feedback and your feedback, they sync nicely.

So Dr. Bricker, thanks so much for taking the time to chat with me today. We love your work. I got one more question for you and I ask everybody: what's the most astonishing or interesting thing that you've seen relating to our discussion topics today -- that you can share safely, of course, compliantly. Because I'm sure you've seen some crazy stuff over the years.

[24:25] Dr. Eric Bricker: Yeah, I would say the most astonishing thing that I've seen is the lack of action on the part of the employer. It rests on the shoulders of the executive leadership team outside of HR. So, I've seen benefit consultants and brokers have been like, look, we really got to do something here to be better stewards of the plan and to improve quality and lower cost. And I've seen HR people and Directors of Benefits do the exact same thing. And they go to their executive leadership team at the employer and it falls on deaf ears. There’s just a lot of complacency.  

And so, I think that what has been most shocking is that degree of complacency. But there is a historical precedent for it and that was the great financial crisis. It really takes a crisis for the executive leadership team to actually act. And so, I think that there is a lot of pent-up action that's going to happen. I mean, right now corporate profits are at record highs. A lot of the executive leadership teams are just like, look, yeah, it's wasting money. Yeah, I hate writing the check, but you know what I'm gonna do it anyway because I've got so much money right now that I just don't care.  

And that's going to change. Is that going to change this year? Is it going to change next year? I don't know, but it'll change eventually. And when it does, you're going to see consultants and HR leaders that really have a much more supportive environment with their executive leadership teams to make some changes.

[25:44] Justin Venneri: Yeah, change is slow and then all at once, right?

[25:46] Dr. Eric Bricker: Yeah, very true.

[25:48] Justin Venneri: Well, Dr. Bricker, thanks again. I'll put the links in the show notes. If anybody wants to get in touch with you, LinkedIn? What's the best way to follow up?

[25:56] Dr. Eric Bricker: Yeah, the AHealthcareZ YouTube channel. And then you can also just connect with me or follow me on LinkedIn as well. And again, thank you Justin for having me and thank you to all the listeners for tuning in.

[26:07] Justin Venneri: Alright, have a great rest of your day.

AHealthcareZ Reference Videos

• High Cost Orphan Disease Drugs Explained
• Do Employers Own Their Claims Data? It's Complicated.

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Find and connect with Dr. Bricker on LinkedIn.

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Disclaimer

This podcast is for informational and entertainment purposes only. The views expressed are those of our guests, do not constitute professional advice, and may not represent Judi Health's/Capital Rx's position on any matters discussed. We make no representations or warranties regarding the accuracy or completeness of the content; information is subject to change and may not be updated.

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