The Business of Pharmacy Podcast™
Aug. 15, 2022

Advancing Transparent PBMs | Roy Wilkinson, Mutual Rx

Advancing Transparent PBMs | Roy Wilkinson, Mutual Rx

Roy Wilkinson founder and CEO of Mutual Rx discussed the growth of  transparent PBMs.


Text to speech: 

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

Roy Wilkinson: I'm Roy Wilkinson. I'm the founder and CEO of Mutual RX, a newer type of PBM headquartered in Irvine, California, and really, built on the model of transparency pass through. and client friendly is maybe the best way to describe it.

So Today we're gonna be talking about

the differences between what we would call the old model PBM or the traditional PBM versus the newer arrivals. Those that have, recommitted themselves in some cases and others it's been a brand new endeavor, but dedicated to transparent pass through pricing and disclosure of financial arrangements with their clients. Really a different contrast from the traditional way of doing business in the PBM.

Mike Koelzer, Host: When you say the new trend whose ears do you hope to light up? Are those companies that have a disdain for the opaqueness or don't they know?

And is that a new teaching moment that you have to give to them? Or are they clamoring for that already?

Roy Wilkinson: I, I believe it's the latter in that, uh, over the years, many types of plan sponsors or constituents, whether they're payers. Whether they're consultants or even consumers of healthcare, the members in a health plan that use prescription drug services have been surprised and unhappy with not just the high cost of prescription drugs, but the lack of cost disclosure. So it's very difficult for a decision maker. Or as I said, a stakeholder to really get their arms around what these doggone drugs actually are. cost.

Mike Koelzer, Host: Because a company under 50 my pharmacy. So we're in a more of a group plan. I don't think we necessarily pay for the medicine that our company's using. It's more in a group fund, but the way I understand it, these bigger companies are actually paying the PBM for that medicine that their company used.

And they're not able to see that. Do I have that right?

Roy Wilkinson: Yeah,that's pretty right. I mean, one of the,dilemmas, I think in the healthcare cost equation, when you look at the various players, whether it's insurance companies, whether it's employer sponsors, whether it's, providers like hospitals or in the case of pharmaceuticals, the manufacturers, who's really responsible for driving price or setting prices for the end user and in the model that we've created in the us, this position of middleman,that helps. Quarterback transactions known as the PBM was created to try to make a more efficient process for both members who received the medications and for the payers who had to pay the tab. And now the question has arisen. What is the real value of that middleman? It's that they've been in place traditionally for over 40 years? And the argument has been made that the model is a bit archaic, has seen its better days and that there's maybe newer, more efficient ways of doing similar kinds of services for less money and with a better lens of, what they're getting paid for. And that's what I've heard from our clients.

Not so much that it's just cost because while cost is really important to, to most plan payers, over and over. We hear the lack of trust as the second, most frequent in comment. they'll say, we don't really care what they tell us because we don't believe them. we

 no way of testing when they tell us something is passed through or something is transparent, or, what the cost basis is. We just have no way of testing it. So, I think a combination of true cost along with trust are the two elements that most plan sponsors strive for.

Mike Koelzer, Host: These companies that use the PBM? Maybe they don't see the true cost, but are they seeing any cost? Can the companies go to the PBMs and say, how much money did we spend on Mrs. Smith's families, medicine, and even more? How much was this 90 day prescription for this drug? Are the PBMs giving that to these companies or are they not even giving that to the companies?

Roy Wilkinson: It depends. In most cases, certainly they can see a report that says, [00:05:00] this is Mrs. Smith's family. This is what they've spent on medications this year. This is what their portion of a co-payment, cost share represents. And this is what you paid as the plan sponsor. So, you know, PBMs provide that level of disclosure. The question really is, and it's fundamental to economics of when does a consumer really have the right or the need to see what a product or service actually costs. And sometimes it's maybe the semantics of this drug cost X. Well, does that really mean that's what you paid for it and then you marked

it up. So that's one of the dilemmas right now. For some reason in healthcare, many people have the sense that it should be at worst, a low margin environment for paying for services. A lot of people feel that somehow healthcare should either be free if we could use that term or, you know, non-profit and then you find the other commercial entities that are involved in the delivery of healthcare, whether it's a physician, a hospital, a diagnostic, uh, lab,a PBM that says. is the question really? What does this cost, or is it more one of what is the value for the price you pay? And you have to be able to make that assessment that you're receiving value as a payer

in order to justify the expenditure.

Mike Koelzer, Host: one of the issues then would be that they're probably showing what Mrs. Smith paid. I imagine they're not showing. And when I say they were gonna put them into the camp of the opaque PBMs versus you as a transparent PBM. So I want to make that distinction, but I may not always say it while we're talking here, but when they give the price that the Smith family paid, I imagine they're not giving their, and I'm not saying they necessarily should, but I imagine they're not giving the price that the PBM paid for the medicine.

Roy Wilkinson: That's correct. And there's different levels now of cost that gets the payer, maybe to that actual hard cost number. Here's what we paid as a pharmacy, or here's what we paid as a PBM to acquire the drug for our mail order pharmacy. We've marked it up by 10% or 15%. For example, Now recently, mark Cuban has gotten a

a lot of publicity with his cost plus approach. So what he's claiming is he takes the cost of the medication tax on a 15% operating margin. And then add something additional for handling and postage in order to get the script out the door to the patient.

you have every kind of iteration in between. and I think where people are very frustrated in some cases, anger is really on two fronts. One is they don't understand why something that costs 2 cents a tablet for acquisition gets billed at $2, a tablet for many people that seems like excess profits. And I know that's one of those subjective terms of who makes that assessment. And I think the argument for clients that have said we'd like to be much more transparent in these transactions is to see those numbers and say, we'll make the assessment that if you are in fact, are billing as $2 for a 2 cent. Do we perceive that there's a reason for it? Are you giving us value, add to just the ingredient cost to make that a worthwhile transaction? And then, I think the second level of concern comes from the variability of pricing. There's no sort of finite way of expressing it so that you can walk in one day to your local neighborhood pharmacy and pay $50 for a prescription.

And you may come back, 30 days later, and it's $150

or your brother-in-law has gotten the same medication, for a significantly different price. So

This irregularity and pricing mechanisms are frustrating to a lot of folks.

Mike Koelzer, Host: It's a cliche, but I'm gonna pick on the used car salesman

we've been so accustomed to the used car salesman, marking stuff up, and then they say, yes, but we're at invoice cost. we know that doesn't mean that it means something else.

What does it mean? So then the US consumer, they wanna go in and say, I want the real price, but then you talk about the brother-in-law when you're sitting around the campsite, you know, and they say, uh, what'd you pay for that car? Well, I [00:10:00] paid this well, you didn't pay what they asked. Did you, you surely pay less than that.

Not knowing that was the rock bottom price, that it might have been the best price in the world, but the consumer wants to tell the brother-in-law oh, hell no, I didn't pay that. I'm gonna pay this and if you don't, I'm walking away, everybody's used to that game. And I don't think you can necessarily blame any side for that.

But the problem is when you're talking about, when you're going to the invoice and how much you got off and all that, it's like, where's the base? Nobody knows the base.

Roy Wilkinson: Yeah, and I think there's been a trend in the, if we can borrow something from, the music industry, the new wave

 of PBMs, these transparent alternatives, to be able to look to a, an actual third party benchmark that has some basis in reality and is not

artificially set to say, here's the baseline here is the actual acquisition cost.

And it's published by a third party, independent, publishing source. And this is what the pharmacy actually paid for this medication. So when you see your invoice, you're gonna see not only what the drug cost, but you'll see what the PBM reimbursed the pharmacy for. And then what was transferred via the invoice to you as the, let's say the plan payer so that you can reconcile those numbers and say, yeah, I see the PBM reimburse the pharmacy a hundred bucks and I got billed a hundred dollars for that same transaction, as opposed to right now, what happens in many cases, the pharmacy gets a hundred dollars, but the client, the payer winds up getting an invoice, for


Mike Koelzer, Host: Going back to my example of the used car. Do people come to you and let's not pick on your customers? Cause I know all your customers are perfect, but let's say that you are in your position. Do you find that where companies might want the best of both worlds, where they come to you or someone like you, a transparent PBM and they want all the benefit of transparency yet they still wanna play a little bit of a game.

They still wanna say, all right, Roy, but how much are you slipping to us? They still wanna have their feet in the American way of talking someone down a bit or getting a percentage off because we're a special kind of thing. Do people sometimes want the best of both worlds?

Roy Wilkinson: They do, but in a little, I think it's, fermented it a little differently, than the way you described it. It's not so much the used car salesman bickering, or 

 Let me show it to my general manager and see what I can do for you.

Mike Koelzer, Host: yeah. side point. Why do they do that? I mean, they're not really talking to the manager. What's the negotiation part of going to talk to the manager is to slow it down or to have a bad cop. 

Roy Wilkinson: yeah. Yeah. I think it is more, bad cop, good

cap. And I think it's, convey the appearance that you're thoughtful,

that this isn't just, 

 I can't do that. 

Mike Koelzer, Host: We really thought about it. Okay. Alright. So back onto our topic, this is not like that.

Roy Wilkinson: Correct. Correct.I think where both sides of the issue, is a function of the actual model that transparency represents. See, in, in my view, you should either be transparent or traditional. Now some PBMs say, oh, it doesn't matter to us. Whatever the client wants we'll offer. and I view that as being incongruent to me, you have to be one or the other, because when you're traditional, you're really, that's really code for, you're gonna mark up prices any way you want.

You're going to probably not disclose all the fees or costs that maybe a client might like to know otherwise. and you're gonna do things the way it's been built over the last 40 years,

where transparent's supposed to be more of a, you get what you get.

And by that, I mean, if you have a true transparent contract, if EpiPen goes up by 5000%, like it did a couple of years ago, you should be able to disclose that to the client and explain why all of a sudden their EpiPens are significantly more expensive than they. What I think the client likes to get when I say both sides, they want you to give them the upside when it's in their favor, but they also want you to provide a guarantee against the alternative, which is when prices rise or you can't meet, the obligations that they think they should, 

be receiving.

They want you to make up the difference.

Um, [00:15:00] And that's where in most PBM contracts, the standard of pricing is to offer a guarantee, which again, to me, a guarantee is more similar to a fully insured kind of rate that you would receive from an insurance company, knowing that if you underutilize the benefit, the insurance company makes money.

If you overutilize. The insurance company might take a hit that year

because they've given you a fixed price. That's what a lot of PBM clients want from their pharmacy benefit. They want you to give 'em all the upside, but still give 'em a guarantee regardless. and what we have to explain.

Sometimes it's a reeducation process with the client to say, if you don't want to take a proactive stance with your members and provide them some coaching, some education and direction as to what the best options are for various types of medications, they may elect on their own to go to the most expensive pharmacy because it's convenient.

Mike Koelzer, Host: But if it's not affecting their price at all, they're generally not too concerned with what you ask, an employer might have to wind up paying, but when it filters back to the PBM, the client generally doesn't care. the contract that they gave them was for, let's say a dispensing fee of $2 yet they're using a very expensive pharmacy where the rate is $4 or $5. The client still wants to feel I'm gonna hold my PBM to that $2 cost, regardless of what the actual experience is. So that's where I think you have the incompatible goals, where they're wanting the best of both worlds.

Yeah. And any time you've got that baked into it, that insurancey feeling of the traditional. PBM or what people might want is that anytime you have that baked in the house, the insurance or the Las Vegas casino, they're always going to win. They're not going to lose. They have it baked in where they're always going to win and they've gotta pay their bills and things like that.

You might think you're not gonna pay higher prices than you're gonna take that gamble. But that side is always going to win by necessity.

Roy Wilkinson: Yes. You're exactly right. It's, it's baked in, as you said. and if you, as a plan sponsor, think that you're buying a pass through contract and that appeals to you philosophically, you're defeating the purposes with these guarantee and guarantees in these insurance like rates, because as you said, There's an additional margin built into the calculation to give them that fudge factor that they need in order to meet their guarantees.

So in effect the client's overpay.

Mike Koelzer, Host: Roy talking to a couple others,PBMs, more of the transparent ones. One of their biggest hurdles was getting into a certain market where the insurance brokers will go to the companies and say, Here's the insurance and you're basically gonna pick one of the big PBMs.

And if you don't do that,we can't serve you. If you could look at your biggest hurdle, is that it, is it breaking through the noise of the big few, PBMs and,trying to get your foot in the door that way?

Roy Wilkinson: It, it, it really is a, a, a difficult hill decline. They called the big three PBMs, the big three, because they've been very successful at controlling and dominating the market. It's been estimated that those top three PBMs control 75 to 80% of the prescription drug volume. So when you compete with that and many times the gateway or the gatekeeper to a new client engagement is that consultant or in that is that broker. And many times they have other lines of business with that particular client. So they've been charged with, oh, help us shop for a new PBM.

So they're under a lot of pressure and stress to not just deliver something that appears to be meeting the cost objective, but also can provide an unfettered and uninterrupted client experience because most of these plans hate the client noise that can sometimes be associated with the change in vendors. And, for most of these plans, if they get two or three phone calls of someone complaining, oh, I went to the pharmacy and they didn't recognize my new card. And they said, I [00:20:00] couldn't get my script. That's like the kiss of death. I think the decision process, a lot of times for the consultants and brokers is not just who has the best offer financially, but who gives me the safest choice in making this recommendation.


I tell

my partners half kiddingly, that when we're making a presentation out of 10 prospective new clients, eight of the 10 have two questions on their mind. So they're listening to our presentation, but they may not be listening fully because over and over in their mind, they've got the same two questions and they may or may not verbalize them.

So you have to be pretty good at

reading room. And those two questions are number one, which decision is least likely to get me fired. And number two is which decision doesn't require that I have to stay after five o'clock to help implement this new

Mike Koelzer, Host: For sure. A absolutely. And I've said it before, it's right down that line. At 1:00 AM I'm gonna get a call that's gonna interrupt my golf game or whatever. Depends on what level you're at.

Roy Wilkinson: Right. 

Mike Koelzer, Host: So Roy, when you talk about the plan, there's the plan that has decided which dental group to have, which doctors to have, that kind of thing.

they're deciding. And they want the one that is going to. Whoever is organizing that plan. Doesn't want to get fired and doesn't want a lot of work to go along with it. And if everybody buys that, then everybody is, I don't wanna say happy, but it smooths things out.

Roy Wilkinson: exactly. And the consultants have to look at the financial numbers. And as long as the numbers on paper look like they're getting a little better deal than they got last year. Most PBM contracts are three year contracts. So they look at the proposals and they make a recommendation saying, here's our two favorites.

And typically each one represents some level of savings over the current plan, Or they wouldn't be recommended. And then the second phase of that is this one is going to be pretty smooth. We're not expecting any member noise, any member, disruption, or any problems that are gonna give you headaches in administering this plan. And that's what the consultant looks for. So as a new, new beat, to the party, we all have a pretty big hill to climb to say,That consideration. and again, I discover, it's really that needle in a haystack, unfortunately, where you have to find the angry prospects. sometimes they say who's the best profile or who likes your offer?

And I say, I like someone that's had a terrible experience already.

that has felt they've been either not treated

fairly or dishonest. And they're really tired of the status quo and they want something

different. That's one we want to talk to. And so that's on our side of our new business development efforts, trying to find that type of prospect.

Mike Koelzer, Host: Whoever is deciding who's gonna be the PBM for that plant is upset or doesn't wanna stay after or doesn't wanna lose their job.

And who is 

that? Usually.

Roy Wilkinson: It depends on the organization, when you work with large unions, you have a group of trustees. Half of the group represents the employers involved in the trust and the other half represents the union. So you have to have a meeting of the minds.

And in some cases you might have as many as 30 trustees on that particular board. So getting consensus to make a switch to a new player is sometimes pretty daunting or pretty challenging.

Mike Koelzer, Host: You're saying that some of these companies have upwards of like 30 people, inputting this information

Roy Wilkinson: making the vote, the decision of what to do. Typically what happens in a union environment and we call it the Taft Hartley union

trust because they're considered multi-employer plans. So you have on one side of the table, the employers represented through their elected trustees. And then on the other side of the table, you have the union represented through their elected representatives. And so maybe a committee, a subgroup or a consultant will actually do the legwork of collecting proposals, doing the assessment, doing the evaluation, and then they present their findings to the board.

Mike Koelzer, Host: the union board.

Roy Wilkinson: yes, the union board and the trustees then have to, consume that information that they find in the reports and say, okay, we're either in agreement with this recommendation or not for the following



 And then they take a vote. And if you don't have a majority vote,usually the status quote [00:25:00] prevails. So that's why that becomes a difficult environment. Sometimes. Uh, other types of plan sponsors are a little less cumbersome. You can get to a single decision maker. It might be, it might be a founder, uh, you know, entrepreneur that has a thousand employees in a manufacturing company, but he's the founder and he's the decision maker or she's the decision maker. And that's the ideal person that you'd want to get to. And that kind of, opportunity, because they can decide whether they like something or not,

and they make up their mind, a third potential environment, is that you get to middle management, which is, I think very challenging because. In the transparent PBM model. It's a very entrepreneurial message.

you're doing the right things for the right

people,for the right reasons. But unfortunately, a lot of organizations, their hierarchy is that you're pitching that message to a bureaucrat. So you've got an entrepreneurial message coming to a bureaucratic audience and they sometimes

hit like this because the bureaucrat doesn't understand if it's a government agency, for example, they don't necessarily have the same interest in shareholder value

in,taxpayer value in all of those other things.

And again, then you get back to that 80 20 thing I was saying where they're looking at their watch

saying, when's this guy gonna be done? Cause I want to get outta

here. But that being said, there are those two out of 10. regardless of the environment, they can work for a union. They can be in an agency for a state government, or they can be an employer or a health plan, a hospital. You find those two in your golden because they're the ones that see, they take their jobs. I don't wanna say others don't take it seriously, but they take a real vested interest in providing value in maximizing shareholder or stakeholder value in optimizing the performance of the benefit programs that they're responsible

for. So that's who we're looking for.

Mike Koelzer, Host: Assuming, and let's say there's a lot of value in still the old time business of shaking hands and going for a coffee and these kinds of things. How granular do the PBMs get? You've got these three big PBMs. Do they have, I'm not talking like the broker of the insurances but do they have their employees that are at that level of going to coffee and things,

Roy Wilkinson: Now they're sophisticated organizations. They've grown huge. I mean, let's face it, the prescription drug businesses, depending on how you want to count it. Probably at least the 500 billion annual business. some estimated as 800 billion. So it's a lot of money and these big three control, 80% of that prescription

 So they've built huge organizations. Some cases, hundreds of thousands of employees, it's 25, 26, 30,000. So they've got big, huge infrastructure. They've got staffing, so they can not only reach out to the consultants and the brokers. And they have a line item in their staffing of hiring people with that kind of responsibility. And then they have client account managers that their job is to stay in touch with the end use of the client. And they do, they report in, they meet with them at least quarterly when they're in town, they'll call, they try to get as chummy as they can. And they'll say, Hey Mike, I'm gonna be in Salt Lake City next week.

I'd love to go to lunch with you if you have a moment and,and you are probably pretty friendly with them and, you know, that's. They do that schmoozing in that relationship building as part of their job description?

Mike Koelzer, Host: Amazon people do a crap load through Amazon and it's not because they have reps reaching out it's because they're. Assumingly cheap and big and fast, and that kind of thing versus a local hardware store owner, or pharmacy owner, but you've already explained it.

You're saying that despite how big these PBMs are, they don't operate on an Amazon cold level. They're chumming up with the local people who are making these decisions.

Roy Wilkinson: absolutely. And not only is it just the handshake and let's go out to lunch, but. How can we support your mission,


you have a golf tournament in support of muscular dystrophy. We'd love to be a sponsor or we'd love to make a contribution to that, to that charity. Or we have a foundation that subs, supplies, scholarships to underprivileged kids coming up to the pharmacy, business.

Oh, we'd love to [00:30:00] support you in that effort. So they have the type of scale that allows them to support those kinds of endeavors that further ingrain and affect their relationships with these clients that makes it very hard to upset those relationships, unless there's been a recognized problem. Even the, best of friends can't overcome

I assume Roy, that like a lot of businesses you want to maybe lead with a positive approach and so on, but. the permission. And let's say, I give you that permission. And you found out that somebody is going to meet with one of these PBM people, as negative as you could be.

Mike Koelzer, Host: What would you like to pull Mary Lou over or pull Joe over before they go into one of these meetings and say, listen, here's what's really happening. 

Roy Wilkinson: Probably in the sentence things aren't what they appear to be.

If I wanted to be concise and they would say, what do you mean by that? And I said, number one, they're gonna say that the new pricing they're giving you is a better deal than what their competitors can offer that may or may not be true.

And I can, you know, cite specific examples of where that might

apply,the pricing benchmarks that they're showing you, aren't really, the cost basis that you might want to 

Mike Koelzer, Host:'s the used car salesman. Here's the invoice cost kind of thing.

Roy Wilkinson: That's correct. when they say, we're gonna pass through, rebates, that's such a hot topic in the last

a couple of years and the pharma manufacturers point at the PBMs and say, they're the reason why our drug costs are so high.

And then the PBM PBMs respond. No, it's the pharma manufacturers that are making us take these rebates and they're the ones driving the

cost.And then you have some politicians and consumers saying we don't care about rebates, just give us a true cost. So when someone says we will pass our rebates to you as a plan payer, you have to challenge and question what that language means.

The PBM services agreement or contract is one of them. slipperiest slopes. I think anyone can go down when they try to read it and assess it and determine what it really means because the PBM attorneys are some of the best I've ever encountered at making something smell like a rose. When in fact it's something, something


Mike Koelzer, Host: absolutely. 

I tell that to my staff, I try to do things by the book, but believe me, when I can find a loophole against the PBMs, I'm gonna use it. And sometimes I get so proud of myself or proud of my staff that we found something. And for a little bit of time, there, you start to think that we're better than the PBMs are.

And you forget that, the PBMs hire the best of the best. connivers I mean, that's what they're built from basically. 

Roy Wilkinson: They're good at their trade. I'll stop short at calling them connivers but they're very good at what they do. And their job is to provide PBM, friendly language and environment for them to operate. So their business practices and market conduct can be supported if ever called into ch be challenged, via audit or some other, type of, review, hopefully not litigation, but that's what they try to, prepare

Mike Koelzer, Host: They make it stiff where they need to be stiffer and looser, where they need to be looser and put some word salad together and they certainly get the best mix for themselves.

Roy Wilkinson: Correct.

Mike Koelzer, Host: One of my children graduates from college this week. And they recently were offered a job at this company. And I think the last thing on my son's mind was probably the PBM, he got the job doing what he wants to do at this certain company, got the salary that he wanted, probably the vacation.

You know, the people know this, blah, blah, blah. If he came to me saying, dad, here's the, you know, the insurance they have, I'd say, well, don't look at that. They can change that six months from now. 

 That's where I think the PBMs had that upper leg where there's mystery, there's margin kind of thing, the smoke and mirrors. I guess the only thing that helps them ultimately would be how many complaints are rising up to the person that's responsible for this kind of thing. Is their job made tougher from barking employees or is it made tougher from the top down?

and they're just trying to be happy where they are, I suppose.

Roy Wilkinson: Yeah, I think that's right. And I think it's,sometimes left [00:35:00] to chance in that it's, that old adage of whose ox is gored in order to make something happen. And. I always think of old stories. One of my earlier companies I've been fortunate to start and sell two health. There Were companies in my career, and one was a disease management company.

And I remember at the time making a presentation to a large fortune 500 employer. And, they had all of the, what you would think as the decision

team. They had the medical director, they had the case nurses, they had the benefits people. They had the HR people. They had everyone there that we thought, had some stake in this decision and they couldn't make up their mind.

And the particular disease management program that we were presenting was based on heart risk and cardiovascular disease. And we couldn't get them to budge. And that went on for a couple of months. even though they said they liked it. Well, one day I got a phone call from the medical director and he said, you know, that cardiovascular program, we're gonna go ahead with it.

And I said, oh, really great, fantastic. What prompted you or what lit the fire? He said, well, to be candid with you, uh, our CEO, uh, had a tough weekend. He ate too much and had some kind of angina attack and,he thought it was probably just overreading and, he felt for sure he was having this heart problem.

And when he came in Monday morning, he called HR and said, what type of heart disease program do we have? And they said, nothing at the moment. And he said, I think we need to

get one And so that's what got the wheels of justice moving and how they wound up adopting a program. So. You know, as random as that process turned out to be, that's unfortunate, the way most decisions and bigger companies get made.

It's who's got the vest

in interest.

Mike Koelzer, Host: I had a guest on my show and I thought this through a bit and talked about how to get the attention of some of the pharmacies. And there's of course, a lot of, um, vertical integration there. And so the PBMs and all this kind of stuff, and it's not necessarily a science, it's an art and you're not gonna hit these people's pockets books a whole lot.

that it has to do with ruffling their feathers and about the best thing that we came up with as we were talking. It was like embarrassment, something to actually hit that decision maker with a reason to change. I don't know if it is too juvenile. What do you think about 

Roy Wilkinson: now.I think you, I mean, you do, and the problem is there's no advanced cookie cutter reason or explanation that you can apply to

all types of plan sponsors and plan payers, and it's unfortunately sort of randomized. You're never quite

sure. What the event or what the experience is going to be, that gets their attention.

I mentioned the fortune 500 CEO who thought he was having a heart attack. Well, I've had

other situations where it's just random events and they just motivate people for a variety of reasons. And the best we can hope for is that we're diligent in trying to get our message out.

And,what's the old expression? when the, student is ready, the teacher will appear So I'd like to

think that when a plan sponsor, regardless of their origin or type, feels that the status quo is no longer meeting their needs and that they'd like to examine and explore an alternative arrangement. that they can think of our company as one potential resource.

Mike Koelzer, Host: I've had some salesmen come to. Salesmen and women come into the store and we've talked about how with COVID. A lot of people have made changes that they maybe wanted to make anyways, if not subconsciously, but their hairdresser and their church and accountant do different stuff like that.

And this guy was bemoaning the fact that he sold, uh,logo wear to high schools. And he said a lot of the high schools don't let him in anymore. Not so much because of COVID, but they kind of like not having these salesmen, you know, popping around the school and so on. Have you noticed things?

Tougher, weaker, et cetera, from COVID has your job gotten tougher talking to these decision makers and again, not so much of the true reason of COVID, but has there been changes that maybe people were able to make pro or con because of this, epidemic or [00:40:00] pandemic that we 

Roy Wilkinson: Yeah, I think, the first impact that we noticed, was the result of, COVID travel restrictions or, 

 movement away from being in the office. 


As a startup, we had very specific growth targets, for the year 20, 20 and 2021. and unfortunately, we did all of our planning and presentations via zoom kinds of meetings.


you couldn't get out to see prospects and they didn't want

you to come, or they weren't allowed to have anyone. And the message for many of them was, oh,we're not gonna make any major changes because

we have to think,what's this gonna do to our business in terms of, will we be able to keep our employees, will we be able to regain the market, share that we've lost is our

supply chain gonna be corrected? And so all of those are unknowns at the moment. We don't know when this COVID, thing's gonna go away. So as a result, we're not gonna make a material change that, you know, the devil that you

know is better than the devil. You don't know.

so that had an impact. now the positive side of that reality is that costs have become, even a keener driver cost reduction is a keener driver than it was so that you've got some groups of, uh, prospects say in the hospital sector, who

many are really hurting their revenues have taken a big hit, they're having issues with, staffing, and being able to show them how you can turn, a cost item into a less costly alternative, 

or a revenue, uh, bucket in some cases,that's somewhat more appealing to those types of plans.

And I think that's the direct result of how do we all get by in

this post COVID world? 

Mike Koelzer, Host: you personally sell, in other words, are you talking to people that are this, 

Roy Wilkinson: Absolutely,as a startup, right? you, and particularly as the CEO, founder of a startup, you're a chief cook and bottle washer. so you 

wear every hat and.

Mike Koelzer, Host: with that? What are your tricks of the trade? I'm sure. Sometimes you feel like a door to door salesman, selling bug spray for the yard, something like that.

Do you get rejected? How do you get in? how do you get to these decision 

Roy Wilkinson: You know, it's it's, it's one of how do you build confidence in your buyer? And I don't think it really matters whether you're selling cars or prescription drugs or furniture, if your customer doesn't trust you doesn't believe you. And don't have confidence that you can. solve their problem. They're probably not gonna do business with you. And then the fourth characteristic is, do they like you, all of the

the sales sign says, people don't buy from people. They don't like it. So you

have to have a certain likability with that particular prospect. Now that being said, you can't be all things to all people. And that's why there's not one solution that meets the entire prescription drug world.

Mike Koelzer, Host: But how do you give them a chance to like you? Are you hurtling, what do you call 'em secretary? What do you call 'em now? the assistants, the gatekeepers. How are you hurdling the 

Roy Wilkinson: it's a different client acquisition model than it was certainly 20 years ago. And maybe even 10 in that you don't pick up the phone and cold call companies any longer, you know, we're

to be able to do and. If you were effective, you could, you know, find a reason to get through the gatekeeper that doesn't happen anymore.

It's all a relationship sales business. So it's either relationship you've developed over your career with other types of companies and

plans, or it's a relationship that you have with their advisors, whether it's their attorneys, their accountant, their consultant, their actuary, whoever's

make healthcare decisions. That's who you have to use as your channel to get the introduction that you need. So that, as they say in the marketing business, it has to be a warm introduction, a warm handoff and not, the expectation that I'm just gonna call or someone's gonna read my website and say, boy, where have you been?

That's exactly what I need. When can you come talk to me?

Mike Koelzer, Host: Would that third person be instrumental then in actually making the connection or would that just allow you 

Roy Wilkinson: No, I think that's critical that you have to actually have a warm, not just a warm introduction. oh, I met this guy on the golf course. He seems like a pretty good guy. maybe you should

talk to him. I think it's more that you're looking for that third party endorsement or that third party validation that says.

I've known Roy for 10 years or, you know, whatever the time frame, you know, we've we used to work together at such and such a place, or he

[00:45:00] helped me while he was there and he did this. He's a good

guy. If you want to talk with a, with an, you know, an honest deal or an honest broker, if you will, someone that will do what he says and that you can believe in the presentation, I think it's worth, either visiting with Roy directly or his team, or at least including them in the list of the options you're gonna consider. So I think you need that.

Mike Koelzer, Host: That's the problem in pharmacy? It's like we sell some medical equipment and we do a lot better in my opinion of word of mouth. When someone sees medical equipment, they see this flowery cane or something like that. And, you know, Hilda is talking to, you know, Gertrud and where'd you get that?

And this kind of thing with pharmacy though, it's. obstructive, you don't typically just bring up the conversation of pharmacy with people in your case. Do you have to ask people to do that for you? It just doesn't come up in conversation, right?

Roy Wilkinson: Typically, if you're dealing with professional advisors like attorneys or accountants or actuaries, if you have a relationship with them, you can say, Hey, I've started this new company, or we've developed a new program. We're really excited about it. We think it's gonna have a wide application with a number of these plans. You know, you ask their advice. If you were in my

shoes and you're reaching out to the two best customers that you know, that you think you might be interested in hearing about, who would that be? And once you've identify 'em, would you have any problem in introducing me or, or, uh, and sometimes they say, yeah, you know, it's Joe, and he's gonna be at the

golf tournament that we're both playing in next week. find me when we're there next week. And I'll make sure I

Introduce you. 

That happens at conferences. see a lot of,I guess I can call it, familiarity that results from strategic marketing, if you know your market segment, right? You don't want to, to be all things to all people everywhere, but. You might have a target say in the, we talked a little bit ago about the union and the Taft Hartley business. If you have a client that happens to be an electrical engineer, all of those national unions, international unions have local chapters around the country. And a lot of times they certainly talk and communicate. So if you happen to be dealing with your local in Southern California, and you've been able to service their needs, and they're really happy with what you've done, you wanna reach out and say, who else is in your region? Who else across the nation are you friendly with? And they might have a hundred different locals around the country. they know in some fashion or another. And so you want to get an introduction that way. So it's just part of your strategic marketing plan.

Mike Koelzer, Host: I think going through those professionals is a great thing because when you're at a certain level at the company that you're trying to attract, and they're working already with an attorney and accountant and things like that, they're working with this attorney and accountant because those guys help them get home

on time and keep their job.

They make them look good. And someone who's doing that. There's something unspoken. confidence that they're not going to introduce you.

If it makes them look bad, like you're going to help, 'em lose their job or not get home on time kind of thing. So there's that trust 

Roy Wilkinson: Absolutely trust cost and control are the three components that plan sponsors seem to find important. So as you said, if it's dependent on a professional advisor that they've relied on and trust their advice, then if they introduce you, then you've overcome that hurdle of being a credible resource that the prospect can depend on.

Mike Koelzer, Host: Roy. What gives you a dopamine hit during the week? What is either fun for you or is like a win for you that carries you through the week? 

Roy Wilkinson: Related to this business.

Mike Koelzer, Host: related 

Roy Wilkinson: Yeah. Yeah.I think it's, I like to write and, um, in the past I've done blogging and I've written a couple of books and I like to post on places like LinkedIn. 

Mike Koelzer, Host: That's where I saw you because it was a little bit, I don't wanna say naughty, but a little bit of,let's go after 'em kind of thing. And I like that, and that's why I 

Roy Wilkinson: Well, good. I'm glad it was, it worked in that case. We try to be provocative, but without being adversarial.

and so I like to write, and I like to then gauge the reaction. We have a pretty good following, on LinkedIn, a lot of people I've known and respect,

 like their professional judgment. So when I write something it's my very [00:50:00] unscientific market study to find out what the temperature of the audience is as to the types of

Mike Koelzer, Host: Yeah. 

Roy Wilkinson: they're interested in it.

Mike Koelzer, Host: Back when I started the podcasting up, they said, listen to your audience. I'm like, what do you mean listen to 'em? Are they gonna tell me what they like? But there's a lot of markers, I look at my more popular shows and they're on such and such subjects.

it's not maybe having someone come out and verbally telling you something, but you keep your ears up to the amount of people that like this and like that you can kind of see what direction you want to go 

Roy Wilkinson: Yeah, exactly. So, I find I get a charge out of that.

And then I also really enjoy networking. It's maybe an extension of that same dopamine of connections and making this a relationship business, but I like to find compatible potential collaborators. I think the economic term is programmatic. Acquisition where you can

find a service or provider that will help you with your solution. It's not the same solution, but it's complimentary. And so there's always creative people out there doing interesting, in some cases, really revolutionary types of things. And so I like to keep my antenna up, like to feel that I'm searching, I'm reading a lot.

I'm a voracious reader. So trying to see who's got the latest, communications software or member app that will, help patients become adherent in

their prescription regimen, or maybe it's a data analytics tool or product, or maybe it's a new platform that's being developed or a new technology. those are the kinds of things that keep my battery charged and say, wow, this is an exciting invigorating


And I'm glad I'm part of it.

Mike Koelzer, Host: On the opposite of that? What is something that perhaps once a week you do or you're like, gosh, darn I gotta do this. I'm just gonna and bear it kind of thing.

Roy Wilkinson: oh, gosh. 

Mike Koelzer, Host: Where do I start?

Roy Wilkinson: I mean, what's the drudgery. I, in the old days I used to say it was your list of sales calls that you had to make. And fortunately, now, I don't have to do that same kind of, thankless 

Mike Koelzer, Host: of the reasons we 

Roy Wilkinson: Well, that too. And fortunately, I'm I'm a little more seasoned in my role, so

I don't have to be the one that has to report to anyone that we've done our. A hundred sales calls for the, you

know, for the day. So those are the kinds of things that I think are,I don't regret when I

have to them or, see what else is distasteful? not a lot because I'm an

Mike Koelzer, Host: yeah, I'm a numbers person. So a lot of times people hate reviewing spreadsheets and I seem to enjoy that and like making those contrasts and discoveries via I like that. if you could sit down with someone of influence and you're certainly a man of influence, but somebody else that maybe is not doing the exact same thing you would be, would it be the president of the us? Would it be the federal trade commission? Would it be the CEO of some business?

Who would you like to sit down with for 15 minutes and share something with who would that be and what would that, prayer be or that, be to them?

Roy Wilkinson: I think based on my work experience and,affinity for what they're trying to do with their members, we're very patient focused in our business and our, that was one of the primary reasons why we headed down this path is we wanted

to give patients a better alternative. so I think maybe the president of one of the large international unions,

not a local cuz we've been fortunate.

We get to meet a lot of the locals at state levels, but the actual, the head, the, the Jimmy Hoffa type 

kind of, bigger than life, personality

that carries a lot of weight and a lot of influence and has the power to make significant changes. So I think it would be someone like that or a state governor that I feel is committed to doing something different, again, to help people and control the cost of prescription drugs.

Those would probably be the.

Mike Koelzer, Host: When I think of union, it's just been blasted into me from seeing news clips and things like that as a child. But it always seems like it's not the salaried office people. It's more the line and things like that. Is that a true statement?

Is that typically where the quote office people or the, you know, managers, leaders up there are not [00:55:00] part of the union.

Roy Wilkinson: it's interesting because I think for the most part, the typical union member is maybe as you've pictured it, the lunch PA lunch box workers that are

 trucks or heavy

equipment operators who are electricians, the plumbers, the brick layers, the


Are the, the,the soul, in my opinion of why unions are there to

 to help get them a better working environment that,

you come along with,better safety, better, compensation.

But yet there's a whole layer of management, like in most organizations that are white collar, you're surprised sometimes at least I was early on that. How many of the very senior people have law degrees and have graduated from Ivy league schools and have majored in labor relations and have come out of really high executive positions in the federal government related to labor post, and trade posts. So surprising to some people. some of my most sophisticated buyers in the healthcare field over my career have been from unions and

Mike Koelzer, Host: so those people you mentioned are still in the 

Roy Wilkinson: yes, 

yes. Some, some that have never really worked with unions or Taft-Hartley trusts,think that it's sort of a, you know, re real blue collar, um, uh, archaic kind of mix. And just the opposite is true. As I said, a lot of labor attorneys, a lot of very sophisticated people, make very complex analyses and make purchasing decisions.

So it's a really interesting group and I used to laugh as well at one of my, uh, labor experiences or. uh, several of the entertainment guilds

operate in Los Angeles and

in New York city, and many people don't think of, some of the highest paid directors

in television and motion picture as being a

member, but they, but they are. Um, so it's really a different flavor of union and labor representation than many people recognize or acknowledge, but they're there too. So

you really have a full spectrum of worker types, um, that particular sector.

Mike Koelzer, Host: Roy. We have a lot of different listeners across the pharmacy industry, but let's say that right now, we've got a handful of independent pharmacy owners, pharmacy managers, and so on. What words would you share with them?

Roy Wilkinson: Uh, in a word, I'd say fairness, I'm on your side. We like to

think that one of our missions is to become the friend of the community pharmacist for a couple of

reasons. Number one, we think they've been treated poorly. by

traditional PBM arrangements. they're oftentimes given a, take it or leave it kind of attitude when it comes to PBM contracting.

And then they,disadvantage the pharmacist by, you know, a lot of, uh, you know, one time say penny, anti tricks, but they're

pretty significant, you know, with the types of, uh, restrictions of

being to not disclose pricing information or clawbacks, um, the kinds of practices that many PBMs follow.

So our

mission, one of our missions was to be both client and pharmacy friendly PBM to give them a real choice. We've tried to nurture relationships with a number of state pharmacy associations to say, Hey, we wanna be on your side. We wanna help. Wherever we can. created a platform, in our company for our claims processing, which we call RX Equis, which if you

 your high school, Latin may recall that it stands for truthfulness,fairness and equality. And we like to apply that to the pharmacies that we work with. So we think we can come up with reimbursement structures that are fair and equitable, that will pay the pharmacist for their service. We're not there to squeeze 'em at a loss for the kind of Mac rates that they can exist on. and we think that pharmacists are one of healthcare's greatest, underrepresented resources.

So the ability to produce things like meaningful medication therapy manage. The [01:00:00] new genomics technology of genomic testing is a great potential for local pharmacists to learn and help optimize their pharmacies' performance. So those are the kinds of things that we would try to reach out to those pharmacists in exchange.

One of the foundations of our model is the technology that we have developed in our deployment. And one, element or benefit of that is improved payment to the pharmacist where, typically a PBM contract tells the pharmacy that they have 30 or 60 days to get paid yet.

When you look at the client contract, a client gets terms that says they have to pay the PBM within two days.

Mike Koelzer, Host: of course 

Roy Wilkinson: So they have that, that float that,is I think really painful to a number of pharmacies. And so in, in,

our system and our model, we can provide near instantaneous payment on transactions

and that's, I think, a meaningful benefit and differentiator.

Mike Koelzer, Host: Knowing that many of the decisions in a company are made by the person responsible to set the plan up and so on. What can pharmacists do for you in similar, transparent PBMs to help the world, get to that level and not just be ch chatting with the employees who are down not actually that decision making, responsibility.

Roy Wilkinson: I think the ability to embrace our model and publicly, be able to say,and I'm just thinking out loud here, because

We don't finite answer yet. if there's an accreditation or something that could be displayed that says, here are the community pharmacy associations. know us and think we're pretty good guys.

Mike Koelzer, Host: Mm-hmm 

Roy Wilkinson: know, and you put on your website, you've got 10 different

community pharmacy or state

pharmacy associations that tell the plan sponsor. That is our client,

We have a relationship and that we treat pharmacists fairly. And that translates to a plan and their members are a higher level of care, level of attention.

And if we can actually physically contract a favorable term in our network arrangement with those pharmacies

to fairly compensate them. But I think we're gonna see a wave in the next three years where patient outcomes are gonna be the key differentiator.

Mike Koelzer, Host: 

Roy Wilkinson: It's not pricing. Pricing is gonna all get commoditized.

and so the value added that at PBM offers is how can you help manage the health status of a plans member

and ultimately, how do you improve their health outcome of if they're in a disease state, if they have a chronic condition,

Do you help them have a better experience? And I

think a partnership with pharmacists goes a long way, because all the studies show that the pharmacist is the most trusted healthcare


So I think we have to learn to optimize that relationship a little, be little better, and we'd

like to be that preferred PBM. So if there's ever discussion a lot of times at the state level agency level, you might have the state of wherever, North Carolina and their

pharmacy association at the table,

you know, with the governor's committee or commission. And they're talking about PBM matters and maybe they're complaining about the status quo. Maybe they're saying, we think we should Sue our, you know, and then to have the community as, pharmacist representative say, have you ever talked to mutual RX? They're pretty terrific in our experience.

And we think that you should listen to what they have to say. So that's how I think it might be beneficial to us.

Mike Koelzer, Host: That's right in line with what you were talking about relationships and you kind of sew the seeds and you don't know where those relationships will pan out, but eventually people talk and sometimes it's that tipping point of hearing a company's name a few times 

Roy Wilkinson: I don't have all the answers, but I do know that it's much better to have a bunch of people saying nice things about you than having a bunch of people saying



Mike Koelzer, Host: I'm hoping to tip that into my scale sometime. I haven't quite gotten there yet. 

Roy boy, thanks for being on the program and thanks for what mutual RX is doing. we're all in this together, moving in the same direction.

We don't know where it's all gonna end, or who's gonna break through to the other side, but the more of these connections we can make the better.

Roy Wilkinson: yeah. Thanks Mike. II've enjoyed our talk today. I've enjoyed getting to meet you a little better now that we've spent, the last. 90 minutes together.

So I 

Mike Koelzer, Host: [01:05:00] appreciate that. And I think you're exactly right. It's those relationships within the industry. It's interesting. Some of my best friends today are the result of business relationships that

Roy Wilkinson: started 10, 20, even 30 years ago, in

some cases. so as you said, you never quite know where this takes you, but you

wanna feel that you're being true to yourself. You're helping others. And that, as you said, when you come out the other side, everyone's in a better place. So

Thank you. 

 Thanks again,