The Business of Pharmacy Podcast™
April 26, 2021

Cash-Only Pharmacy | Kyle McCormick, PharmD, Blueberry Pharmacy

Cash-Only Pharmacy | Kyle McCormick, PharmD, Blueberry Pharmacy

Kyle McCormick, PharmD, owns Blueberry Pharmacy, a cash-only pharmacy.


(Speech to Text)

Cash-Only Pharmacy | Kyle McCormick, PharmD, Blueberry Pharmacy

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

Kyle McCormick, PharmD: My name is Kyle McCormick. I'm a pharmacist out of Pittsburgh, PA. And uh, the reason we're talking today is because we have a cost plus model cash only, uh, insurance free pharmacy, from what I can gather, it's kind of the only model that's exactly like ours nationwide.

I know that. Cash only pharmacies insurance for your pharmacies, but we pair a membership model with ours, and I know that there's also membership pharmacies, but a lot of those only exist as membership only, or, you know, non-membership only so, so we kind of melded everything into 

Mike Koelzer, Host: one. When you start positioning your pharmacy, you start saying.

I might beat this only person because they have this and they have that. And so on. So break that down a little bit more for the listeners. Well, frankly, I always blame it on the list or break it down for me. 

Kyle McCormick, PharmD: This is listeners. They are, they have a lot of questions, 

Mike Koelzer, Host: a lot of goofy questions. All right.

So you are cash only, no insurance, correct. And there are some pharmacies that are like that. Correct? Not a ton probably, but some, yeah. And then there's also a set of pharmacies that are, what do you call it? Not subscription membership. Then there's some that are membership. Membership only, maybe what is your crossover?

Tell me again, what's your subset then? That makes you very unique. 

Kyle McCormick, PharmD: Yeah. So maybe I'll, um, provide a little background into why I came up with the model and hopefully that answers the question of how we're different. So looking at pharmacy, um, I've always wanted to own my own pharmacy, but I realized, you know, I saw two out of the four pharmacies that I worked at close because of under reimbursement and.

So I knew that I couldn't do a traditional pharmacy. And so knowing that I wanted to open something and, you know, looking at the landscape of pharmacy, I decided, well, why even accept insurance? Um, it seems to be, I mean, I'm on the Facebook group. Like everybody else, that seems to be the common problem. So why even bother accepting it?

Um, because 90% of all medications are generic now and the U S actually has a. Uh, don't don't quote me on this. I mean, I, no, 

Mike Koelzer, Host: I was rough as long as you're on the right. 50%. I 

Kyle McCormick, PharmD: heard it on a podcast. It might even be your podcast. 

Mike Koelzer, Host: Oh my gosh. If I'm being quoted, that's like that game operator, you know, people that are in heat loaded trouble, if you're between zero and 50%, and you say any number in there you're correct.

And if between a 50 and a hundred, any number is correct, we just go either side of that 50% mark. So, well, 

Kyle McCormick, PharmD: I heard once on a podcast 

Mike Koelzer, Host: from a wise old Sage 

Kyle McCormick, PharmD: yes. That, um, the U S has the world's lowest generic drug prices. Acquisition, not necessarily a resale now, I don't know if that's true, but I heard that, um, and I it's because of the market, um, for the generic market.

And so knowing that 90% of generics or 97% of all prescribed medications that are generic and that the US has some of the lowest generic drug prices. I was like, why not just open up a pharmacy where patients pay directly and work through. I wanted it to be cost plus not, um, coming up with pricing schemes based on which medication it is.

It's a typical quantity. I wanted it to be truly cost plus, what does that mean? 

Mike Koelzer, Host: Because I hear people saying that because when it's not cost, plus you have people that are maybe trying to group things or being creative more, and this is truly like here's the cost plus, is that what it is? It's just standard versus like groupings or, 

Kyle McCormick, PharmD: yeah.

So cost plus for me. Um, and there's different costs plus it's like, you're saying sure. Cost plus for me is truly what it sounds like. Um, I view the cost of the medication as my acquisition. A small markup for, to account for credit card fees, stuff like that. And then I add 19 cents to that, to cover the cost of the e-script because it just bugs me that it costs 20 cents every single e-script.

So, and then, yeah, and then I was trying to determine, well, what is that margin that I want to cover? Uh, You know, the labor, the bottle, what does that need to be? So I did some calculations and, um, came up with the average cost to dispense is $10. For you, you might know that exact number is $10, 49 cents.

Something like that is the nationwide average cost to dispense. And I said, well, my cost to dispense has to be lower. I'm a single employee. I don't have to spend all day on the phone with insurance companies. I don't have to submit claims, so I don't have claim fees. I don't have all the different fees. I don't have audits.[00:05:00] 

So it has to be lower than 10 49. I don't really know what it is. I've done calculations to figure out, you know, if I was, if I had a robot next to me and counting everything, and if I could just check things, fill prescriptions, things like that. How many could I do an hour? And what would that be? So I have those kinds of ideas of what it would be, but just knowing that the nationwide average cost to dispense was 10 49.

And knowing mine would be less. I figured, well, why not make my cost plus be $10. Sure. And so the other thing I wanted to keep in mind though is, and that's my monthly cost plus. So if it's a 90 day supply, it is cost plus 15. Mm. So the other thing I wanted to keep in mind is if somebody is on like, just yesterday, I had a 16 patients, 16 med profile that got sent to me.

If somebody is on 16 medications at $10, plus for each medication, that's $160. Um, if this person does want to do it monthly, just because of the costs. Um, and so I realized that it doesn't take me that much extra time to, especially once after new medications take longer, but refills don't take longer.

Typically you're just verifying the product, making sure there aren't any changes in a profile. And if you've already done it the first time, it really shouldn't be that much more work that goes into it. So. Each additional medication doesn't add the same amount of time. Sure. And so it didn't make sense to charge the same amount per prescription.

So in going and looking back on that model and realizing, well, I don't want to just do cost plus I also want to have a membership so that patients that are on two, three more, more medications, they have a ma ma like a medication management fee that is their monthly membership. And then we lower their cost plus because we stand to still charge for utilization and CA. I can't just do a membership and you get everything at cost or something because there's still, if somebody is on 16 medications, it does take me more time.

It does, I have to do more management. And so I still wanted to have an amount tied to that. But I didn't want it to be, it just wanted to cover the cost, the true cost of dispensing, not necessarily the cost to manage a patient's profile, which would be it. So, that's where I came up with the membership fee to the membership is a monthly medication management fee.

That's what I call patience. It's just a membership fee. Yeah. And I think that in the long run, Ron, I want them to view it as that's what they're paying me to manage their medications right now. To them. It's just like, this is a way to lower my cost of medications. Well, Hey, 

Mike Koelzer, Host: if I can do both 

Kyle McCormick, PharmD: great. Right, right.

Exactly. Yeah. In the long run, I want to prove the value of the pharmacist and have them view that. Oh. Even if I ever go down to just one medication, I still don't mind paying a member, a membership or amended medication management because I know he's looking out for me. Yeah. So to answer your original question, why, what makes us different is medication management.

And then also still tied to a prescription, um, dispensing fee or cost plus accounts for utilization. So if we have a high utilizer, they're still paying more compared to another member, but it also doesn't penalize somebody for being, or having multiple conditions because we're S we're, we're not charging them a full $10 per prescription.

They actually do save time if they are. Because even if they're on 16 medications say it's, uh, you know, 16 times three, and then on the add on their monthly fee, that's how, you know, I'm still making a decent bit every month. Um, from a, 

Mike Koelzer, Host: Let me make sure I got this because all that stuff you're saying, it sounds like a great plan.

I just want to try in my head to find out what would be, not a cost plus arrangement. It's 

Kyle McCormick, PharmD: like charging $8 a pill for sildenafil. Whenever it doesn't take any more time or money to dispense Sylvana. It's just a drug. People commonly have to pay cash for it, because it's not covered by insurance.

Mike Koelzer, Host: The non-cost plus is more like market rate. What can you get for this? It's like a gas station may be selling milk. One gas station, maybe selling milk for $7 a gallon. They know, they're not going to get the extra traffic. Another gas station maybe sells it for a buck 49 because they know they're going to manipulate this and not manipulate in a bad way, but just, just bring people.

And it's a loss leader in those kinds of things. So what you're saying is you're not going on market stimulation so much. You're going on. What's the drug, what's my markup. And we'll let everybody else play the games of we're giving you a great deal because we're less than this changed or it's like, well, no, it's not a, it's not a great deal.

It's a great deal compared to them, but everybody's priced higher because they know that it's a [00:10:00] highly sought after medicine and people are willing to pay more, that kind of stuff. So it keeps 

Kyle McCormick, PharmD: it is in line with exactly. And it's also, to me, it aligns more with what as pharmacists we should be fighting for is the service.

And so. If you price something arbitrarily based on the going market rate, you know that my agenda doesn't sell down. It feels the same exact as your agenda. It's not actually the drug that's different. So if you were saying, you know, I've got premium milk or something like that, then it drives that you can argue for a better price.

For me. I don't care what drug it is. Brand generic, highly sought out. It takes me the same amount of, you know, for the most part, the same amount of time and effort and, um, you know, dispensing supplies to dispense one drug compared to it. And so it's that service that they're paying for it by that marketing 

Mike Koelzer, Host: And arguably it's not like these drugs are a huge, different investment or they're hard for you to procure.

I can see if something costs a lot more and you had to have it on the shelf or you had to find it, or you had to do something, but basically they're all fairly low costs, fairly easy to get about the same. Effort goes into it. But if not, that's where you can make some reflections on that. You can say, well, look for this class, it's higher.

Maybe someday you'll have a new class of medicine where you say these are still cheap. They take a lot more time. In fact, it takes so much time that I'm not going to spread that out amongst all of my customers. I'm going to charge this group a little bit more. That's where you can do that though. 

Kyle McCormick, PharmD: And a great example of that is something I already do.

It's controlled substances and it's twofold. It's one. You don't want to sell those so cheap that they, you know, become sought after. But the other thing is it does take more time. There's a court requirement to check PMP there's due diligence with those prescriptions. So that's already a class of medications that I charge a higher cost plus because it takes more time.

More pharmacist's time. There's a greater service involved. Yeah. So I view it all as the cost of the service and not so much, which drug am I filling? Frankly, 

Mike Koelzer, Host: There's some follow-up stuff with controlled drugs to, you know, whether it's audits down the road from the DEA or doing this or doing that, there's just more involved with.

Kyle McCormick, PharmD: Exactly 

Kyle. So here's the question then. Should people continue to listen to our conversation here because this is maybe panning out for you? Or do we know enough now to say this isn't working and let's close this conversation down and make this podcast just 15 minutes long and interview somebody else.

I'm guessing that you're having. Some Success. 

Yes. Uh, I mean, I'm not paying myself yet, so there's that piece, but you're living. Yes. Yeah. Um, so I would say starting something completely new, all indications that it's a success, So something that's really not been done before. I think that, um, just this past couple of weeks has been.

Pretty busy. 

Mike Koelzer, Host: and I know you're doing okay because you had enough money at least to buy that blueberry paint for the back 

wall. Yes. Yeah. Everything in here is blue 

because your blueberry pharmacy pharmacy right now, blueberry hill, just blueberry 

Kyle McCormick, PharmD: pharmacy. A lot of people think blueberry L. Is it blueberry

I'm like, no, it's blueberry. 

Mike Koelzer, Host: You don't have to tell me where the damn fruit is grown. It's just the 

Kyle McCormick, PharmD: food. It's just the fruit. Yeah. I always 

Mike Koelzer, Host: I think blueberries are more like purple or black in my head, but they're not, they're blue, I guess. 

Kyle McCormick, PharmD: Huh? Yeah. They're definitely darker. Oh, they're darker than your color.

Yeah. Yeah. Blueberries are typically like a dark blue or. 

Mike Koelzer, Host: Well, mine are purple-ish with white freezer. Burn-out 

Kyle McCormick, PharmD: frozen blueberries. 

Mike Koelzer, Host: Good to eat, but you bring up the blue and the blueberries. Exactly. 

yeah,yeah All right. So Kyle, so I'm surprised you haven't asked me yet how I came up with the name blueberry Pharmacy Everybody's going to ask that if you cover it somewhere else, we're not going there. I got more important stuff to 

ask you. Okay, let's go. 

Yeah. I'm going to talk about your height later too. And I'm going to tell you why I'm going to, okay. I'm not going to give that away now. What are some of those indications that you say?

And a lot, a lot of times it's just kind of like intuition. What are some of those intuitions that you kind of say, you kind of nod a little bit and say, Hey, this might work. You talked about that. Maybe being a little busier, something, what are some signs like in your own head, not metrics necessarily, but you probably have something that you just kind of say, yeah, this is kind of.

A feeling of this. Have you had those feelings and obviously you have had some, you just mentioned that, but tell me a little bit more about those feelings. What were those and what did you see that gave you? Like, this might go 

Kyle McCormick, PharmD: places for me, multiple reasons. The first is that it just feels like the right thing to do.

Yeah. Um, so, and then, especially as I tell other pharmacists, other pharmacy students about the model, it just feels like the future. Pharmacy retail pharmacy. Um, [00:15:00] especially again, I'm going to reference your podcast, uh, the episode with Robert Papazian. 

Mike Koelzer, Host: Oh, okay. Fair, fair. As long as you quote one of my guests and not me or still doing 

Kyle McCormick, PharmD: okay.

The previous quote.


Mike Koelzer, Host: shoot. I was doing a nice, big humble brag. And now you didn't even call me that. All right, carry on. Carry on. 

Kyle McCormick, PharmD: No, a friend sent the episode with Robert Pythian and said, you have to listen to this podcast at minute 49. He describes your business. Exactly your business model. He might've 

Mike Koelzer, Host: been looking at you, right?

I don't 

Kyle McCormick, PharmD: I think so because I actually followed up with him afterwards and um, I said, Hey, great episode would love to talk to you. And you know, I'm doing this exact thing that you described. And so we had a conversation, it was a really great conversation, but essentially what he describes and it's interesting.

It's kind of what I felt, but I, even in my business plan, I didn't describe it the way he had described or the way I've come to sense about the future of pharmacy is that knowing some of the statistics, 90% of medications are generic. The most new medications are specialty monoclonal antibodies, ridiculously priced medications.

And so it's only going to divide further in terms of. Everything that's going to be done. Retail is basically going to be generic in the future. And knowing that also, supposedly according to your podcast, guests, 

Mike Koelzer, Host: you know what I have to do, I have to be a guest on somebody's podcast, so I could be quoted, 

Kyle McCormick, PharmD: uh, the world.

The U S has the world's lowest generic drug prices. Um, knowing those two factors, why are we ensuring it? And I think this is this, it might be quoting you, if you don't charge your insurance for your gas in your car. Yeah. And so similarly we know as pharmacists, uh, independent owners, um, that most medications on our shelves cost between a penny and 10 cents per tablet.

That's not something you buy insurance for. Right? If you buy insurance for it, you're guaranteed that it costs more versus just paying right out. Uh, penny there, they can't bring that down without adding cost to it. 

Mike Koelzer, Host: You've got all the intrinsic costs of switching fees, computers, and all that kind of stuff.

But then on top of that, you've got multi-million dollar salaries of anybody who really has their hand in this. So there's no way they can do it cheaper, 

Kyle McCormick, PharmD: no way. Um, we'll probably get into mail order too, but I don't see the future of generic pharmacy being mailed or, um, and so I see retail pharmacy being the location for generics and it being a complete current.

Hmm. Whereas a direct generic market kind of like how, uh, Robert Papazian was describing, because it is just something you would not buy insurance for. Um, it's a known low cost. You buy insurance for life insurance, car insurance, home homeowners, insurance, health insurance, because those are high costs, unknowns versus a blood pressure medication.

Uh, Lipitor. Things that are pennies. So, um, so yeah, into your point about driving up costs, it's guaranteed to be driven up because you have to have a call center to answer questions. You have to have high salary people. You have to have switch fees, you have to have audits. You have to have all the things that add cost.

And we see this at the pharmacy level too. It's not just like it adds cost to the patients. It adds costs to running a pharmacy. For sure right. Have to pay for all those claim fees, all these switch fees, all the, um, I don't have to pay for them, but a traditional pharmacy has to pay for them. They have to have staff to answer, to, to call insurances all day.

They have to do prior authorizations. Um, and as a, as the future of pharmacy moves towards more generics, that's not going to be the case. And so the idea is, and, um, Eric and out at 46 Brooklyn, I was on a call with them and they were like, so you're essentially doing what a PBM is supposed to do. And that's kind of like the idea of my model is we help patients, not just with their generic medications, we help them with their brands, but we do so by not filling them.

And so I know that's kind of the trend in pharmacy. Just listening to that. Reading the privacy Facebook groups is saying, you know, I have to send this patient away because we're losing too much on brand. I look at that as an opportunity to help the patient because likely they're paying too much for their brand name medication too.

And so even though I don't have, I can't fill it because 

Mike Koelzer, Host: of its nature because it is 

Kyle McCormick, PharmD: brand. Yeah. But there's also a lot of ways to break down costs of brand name medications. Um, and so that's where I [00:20:00] help patients. And I actually charge consultation fees, um, cost consultation fees. And so, um, whenever I help somebody with their brand new medication, just this morning, I had a consultation with a doctor, uh, to help a patient.

Who's a type one diabetic being put on insulin. And so I am not going to be filling that medication here, but this patient's going to get a basal insulin for $35. Um, and so I'm just charging a console consultation fee for helping the doctor and the patient. Lower the costs. 

Mike Koelzer, Host: They're going to get it because of coupons you helped find or coupons, probably a cheap word.

Is there a fancier word for that? 

Kyle McCormick, PharmD: No. This one is exactly that : a coupon. So, uh, what I do is I help patients navigate the costs. So, um, you know, whether it's signing up, signing them up for manufacturer assistance programs, um, just to keep on navigation. Looking at, are you even on the best therapy, if you're not on the best therapy, is there something that's better that might work better?

So I'll walk you through the patient story that probably best summarizes the goal of blueberry pharmacy. So I had a patient early on sent to me for her generic medications, husband, and wife, and nebulizer duo nebulizer solution through their insurance marketplace. Insurance was costing over a hundred dollars, um, for a month before.

For the husband. And so with our cost plus model, we were able to get it down to $24 a member price. We were able to lower the costs on all their generic medications. And so they were very happy and they said, well, Kyle, what can you do for my tray Seba? It's a hundred dollars a month. And I said, well, I can't fill it.

Their copay was, yeah, a hundred dollars a month. Then I said, well, I can't fill it. But what I can do with you is work with you. You're sharing your insurance and your prescriber to find out what might be a better option. Hm. Possibly work better, possibly not, but be cheaper and more affordable. So that.

'cause she was considering, you know, cutting down the dose or not taking it at all. Just like I can't afford a hundred dollars a month. And so I got on a three-way call with her insurance. She's a member. So it justifies my time. Yeah. Got on a three-way call with her insurance company and found out that basic LAR was the same tier, but it had a coupon that brought it down to $5 a month.

Actually, it was a lower tier. It was alert here. So I called the doctor and I said, Hey, can we switch this over to basic? I said, send it to this pharmacy. I'll call them and I'll add the coupon to it. Make sure it gets adjudicated correctly and make sure it turns out to be $5. And, uh, so I did that, the patient picked it up and she said, sure enough, it's $5.

And, um, she then started taking it. So within two months she had another A1C done and our A1C had fallen. Um, and, but still wasn't where it was supposed to be. So the nurse called me and said, Hey, I want to add on a GLP one. What do you think? And I said, well, let's do the same thing again. So we got on the phone call with the insurance, and found out that all the GLP ones were the same tier.

And so they were all going to be $50 a month. And so I went searching online again as well. And I found out that it was going to be epic. Twenty-five dollars for three months supply right belts. This was going to be 10 bucks, $10 a month. Um, and then all the other ones were much more expensive. So I said, Hey, can you start her on as epic?

It's going to be essentially $25 for a three month supply. So she started her own epic and, you know, got the coupon called the pharmacy. Got it. Applied. Make sure it adjudicates correctly. And, um, I didn't have to dispense, I didn't have to house any of those medications and you don't 

Mike Koelzer, Host: have to lose any money from it.


Kyle McCormick, PharmD: didn't have to lose any money. In fact, I made money. It was my medication management fee made money, which is her, her members 

Mike Koelzer, Host: for listeners that aren't in the throws of this. When I say lose, I'm not talking loosely because of your time and stuff. I mean, a pharmacy that dispenses that is truly selling that below cost in most cases.

Kyle McCormick, PharmD: So now we were at a point where her brands were $5 and $25 for. Actually are lower than her generic medication costs, which kind of frustrates me. Cause I'm like she's out paying more for her stuff here, but not compared to what she would be through her insurance. And I'm not saying that's how it should work.

I mean, in theory brand should be more than generics back to her story. So she comes back. It's like month four after we first met and she says, you know, I've now lost 10 pounds. My A1C is, you know, almost. Like eight or just below eight, something like that, uh, down from like 10 or 11. And, uh, she said, you know, it's, I'm so much better now.

And then the husband said, well, what can you do about my Trelegy? I've not been filling it. And all these questions keep popping [00:25:00] up. I thought I had a full profile. Like I thought I understood their full profile. Whenever they weren't taking it. They didn't think that. Tell me about these other medications.

Right. And so I said, well, you know, your stage three CLPD, you should be taking, oh, no, he wasn't taking Trelegy. He was taking, um, Breo. And, but he wasn't taking it. It was costing too much. Because if you think about it, like they have all these, like, just add up all those costs in your head, that's expensive to be paying every month.

For sure. So I said, well, let's, let's talk through this. Why aren't you taking it? And he said, because of the cost, I said, tell me about what you're taking it for. He said COPD. And I said, well, what? He said, well, the doctor told me I'm stage three, whatever that means. And I said, oh, well that means, you know, it's pretty bad.

COPT. So I looked at the COPD guidelines and I realized. Brianna's okay. But actually Trelegy might even be a better option and really doesn't have a coupon. Trelegy has a coupon and it actually became free for the patient. Whenever I called the pulmonologist and got it switched to Trelegy, they called it in the prescription to the pharmacy.

I called the pharmacy, said to apply for this coupon. And the patient called two days after starting the Trelegy. And he said, Kyle, I can breathe. And I don't need my nebulizer nearly as much as I use. So now we have the wife that's lost weight, improved her, uh, diabetes status, uh, husband, who can now breathe.

Doesn't need to use his nebulizer. That was the most expensive medication. One of the most expensive generic medications before, but because of his consumption has gone down on it. He's now basically not filling it ever because he's on. Um, Trelegy now I tell you the story, because that's how I view it. This model helps patients because we don't have a lot of patients that are like, well, I, you know, I, my most expensive medications are by brand name medications.

You can't help me with those. I say, well, I can, and I can actually maybe help you to where, you know, we either lower the costs on your generics, to where it's essentially like saving a brand copy, or maybe there's a way to make your brand less expensive as well. Um, to where this couple, their branded medications are actually cheaper than their generic medications.

And so it's just all the idea of medication management versus just the dispensing side of things in that 

Mike Koelzer, Host: situation, because they were a member. Did you charge them a consulting brand fee or is that included? And if it's not included, what do you charge? Somebody who is a member of that? After 

Kyle McCormick, PharmD: that experience?

I did up my cost consultation member. Uh, charge because I, um, knew that it would, I w it wasn't fully justified. That experience showed me that I did a lot more work than what I could charge. Just a normal member. So. I charged patients where I do a more comprehensive, more, how 

Mike Koelzer, Host: Are you going to be deciding your fees on those cost consultations?

Cause those can really say to people, a crap load of money I 

Kyle McCormick, PharmD: can. And it's kind of like, uh, I don't do it based on percent saved. I actually do it based on the time it took, it goes back to the whole idea of what is the value of my time, what I do in that time. You know, if it's super beneficial for one patient and marginally beneficial for them.

As long as they see value in it, that's what's important. So just yesterday I saved a patient $400. Um, you know, and the day, a couple of days before that, I saved the patient $6,000. So, I charged them about the same price and it goes back to the idea of. That's the role of the pharmacist. And it's not so much about 

Mike Koelzer, Host: It's the cleanest way, because then they know that you're not trying to bring them down from 4,000 down to let's say a dollar.

You might go from 4,000 to 3000 because you know, the 3000 is going to be $3,000 worth of benefit to them versus a dollar 

Kyle McCormick, PharmD: one. This is how I view savings in healthcare. And this is also why I've stopped tracking how much I saved patients to summit. What am I saving them based on, if you look at a good RX saving based off of AWP or some usual and customary, that is an arbitrary number to begin with.

And also if I save them once there's not really a future saving, you know what I mean? I can always save them one time. And so that's why it goes back to a medication management fee. I can't charge a percentage of savings each year, because it's not like I'm sending them back to CVS to see how much they would be paying 

Mike Koelzer, Host: when you're doing a costing consult.

Are you charging them up front then saying, I'll look at this or are you saying. Charge it, if something does come up and then it'll be a flat fee, or how do you go about that conversation or that marketing of that portion of the business around 

Kyle McCormick, PharmD: Here, we have a famous lawyer. Who's famous for his commercials.

There's no charge unless we save you money. So I do utilize a [00:30:00] similar, uh, philosophy, um, because one of her comes to healthcare. Um, I see if I'm not able to actually save somebody money and they're paying more than they can already. I don't want to add to that cost. 

Mike Koelzer, Host: So once you find out you're successful, then you'll charge, but it's more of a flat fee for your time then.

Exactly. And you can tell a lot of these from experience. You're not reinventing the wheel right now. You might be inventing the wheel, but you're not, re-inventing it with someone who comes in. Insulin. Let's say again, you can maybe eyeball it and know kind of what's out there before you have to dig for two hours and not get paid for your time.

Kyle McCormick, PharmD: A lot of what I'm doing now is based on past research, just kind of being familiar with all the therapies out there where they fall in the price spectrum, the different strategies to lower those costs. Uh, I feel like I have a better, a decent sense now of how that all works. 

Mike Koelzer, Host: And then Kyle, when you're involved in that conversation with the pharmacies and the doctor in the coupon and doing this kind of stuff, they don't necessarily have to be none wiser for that.

Right. I mean, it's just. Me as a pharmacist, helping somebody out and saying, can you transfer this and do this? In other words, they still allow you to play ball, right? Just because you're not necessarily the pharmacist or whatever, people are pretty open to that conversation of saying, well, doctor, can you send this to this pharmacy?

And then you call them and that kind of thing. You're welcome in that area. 

Kyle McCormick, PharmD: Yeah. So it goes back to, I got a lot of questions. I feel like this might answer the question. I get a lot of questions about what you do with it. Hmm. And my response is, well, if I view the future of pharmacy diverging into a generic and then a brand specialty market.

Yeah. And already we have a specialty where it's like, you expect to have to go elsewhere because of narrow contracting all of that stuff. So, if we kind of fast forward and view it in that mindset, poly-pharmacy in the sense of using multiple pharmacies is an inevitability. And so I view it as well. I want to be the medication manager for that page.

And whenever I'm controlling 90% of their profile with their generics, I can be a better medication manager than somebody might only be controlling 10%. Right. And so that's where I view my role as a community pharmacist is to manage that 90, not manage a hundred percent. By having, you know, directly direct ties to 90% of them, the 

Mike Koelzer, Host: profile.

That's very interesting. Now, Kyle, do you carry any brand in your 

Kyle McCormick, PharmD: store? Uh, insulin, uh, a couple Biles shingles. 

Mike Koelzer, Host: Is there a stance behind that? Or is it just because of the pricing? I mean, what if there was a brand name that was a few bucks or something, but it was still labeled as a brand name of thyroid or something like that.

I mean, 

Kyle McCormick, PharmD: I have armor, so to me it's more about a cost 

Mike Koelzer, Host: threshold. Yeah. You're not morally against the brand names or something. They tend to be 

Kyle McCormick, PharmD: higher priced brand name. It's just that usually if something. Most of my uninsured patients are going to qualify for manufacturer assistance programs or other ways to get their brand name medications.

And so then in the patients that have insurance, well, even if they're a high deductible, I still want them putting their brand name, medication towards their insurance and then using a coupon to bring down their deductible or something along those lines. So I'd love brand name medication. In fact, I just had a talk with a rep the other day.

I said, one day, it will just be easier for you guys to go directly to the consumer and cut out the coupon rebates. Like can't we just negotiate, can we just settle for a lower cost and not have these artificially inflated costs and then charge the employer directly or something like that? Um, because to me that seems like the best, like it's.

It sounds like drug companies. Don't like PBMs just as much as we don't like BDMs and the PBM model has forced them to have such high copays. If I can get a coupon to make my insulin granted as a branded generic, but it's still a Lilly product, but if I can get a coupon to make that insulin $35 for an uninsured patient, why.

A hundred plus dollars for a Medicare patient, right. It doesn't make sense. So, no, I don't have anything against brand name medications. I have, again, I have everything against the model that exists in pricing, brand name medications, 

Mike Koelzer, Host: right. Here's one for you. We do not carry any brand names in our pharmacy.

And I haven't shared that with anybody before. This is like a confessional with you. We don't carry any brand names, 

Kyle McCormick, PharmD: any So like Synthroid 

Mike Koelzer, Host: period? No, we don't care about anything. That is what they would call a single source. 

Kyle McCormick, PharmD: Yeah, 

Mike Koelzer, Host: We don't carry any period. Now you and me, you and next week's guests. And my dog are going to know this now in the future, 

Kyle McCormick, PharmD: When did you make 

the change 

Mike Koelzer, Host: about four months.

ago If I'm wrong with this, I was just an old guy [00:35:00] that went out of business because I couldn't put up with the changes. If I'm right, I'm a genius, but it wasn't a decision between brand and generic. It was a decision between locking our doors for good or just going all generic. So that's what we are. So the reason I'm bringing this up now is because we're starting to converge on a closed business model.

Now here's the difference: we did it while we were still having insurance. So we still have a full gamut of insurance in our pharmacy and you know enough about the insurance game and our listeners do where I can't decide what medicine I'm going to sell to what person, if I don't carry the medicine, I can decide if I'm not going to sell it.

You know, we don't care about contraceptives. For example, we don't care about any brand new medicine. I don't carry the specialized $10,000. There's a lot of stuff we don't carry. We've just been talking about that. So, it so happens that we don't care about any brand name medicine. We were forced to do that, but our paths are not that much different because the generics are getting so low in price.

People's yearly. What is deductible in all that is getting so high. That it's almost become close to similar. You know, we're seeing a lot more cash. They're not cash patients, but they're paying basically cash for it because it's their deductible. They don't even give a crap if they hit their deductible, they know they're not going to hit their deductible.

So it really comes down to almost our businesses merging even though we're insurance and your non-insurance at least that's kind of the way I'm seeing it. And someday I might end up doing what you're doing and 

Kyle McCormick, PharmD: say, why not? What's holding 

Mike Koelzer, Host: you back. I don't know. That's a good question. I haven't had enough time to think about it.

Well, I haven't enough time to think of this is going to be successful and what I can tell right now it has been because our numbers are. A lot higher than I thought they would be without carrying a brand name. And I think he goes to what we've been talking about with people already in polypharmacy and the specialized medicines, and they're already going places and things like that.

So the important part is I'm not deciding between customers. You know, I truly don't have these medicines in my store. I truly don't have any brand name medicines except a couple that haven't sold all the way down yet. 

Kyle McCormick, PharmD: The reason I see specialty brands going mail order, generic, staying local, I can help.

Pretty much all generics into less than 250 square feet and at an inventory cost of less than 8,000. And so I can run a pretty efficient process here to where my cost to dispense is less than it costs to mail, basically. So why have things mail order? Whenever I have a closer relationship with a physician, like.

The things that add time and probably are the most inefficient with mail order is communication with physicians, communication with patients, all of that. I have a close proximity. As a retail pharmacy, a community retail pharmacy. So 

Mike Koelzer, Host: Here's the thing that is efficient or not efficient. It 

Kyle McCormick, PharmD: is for me, it's efficient.

It's inefficient at a male 

Mike Koelzer, Host: inefficient for the mail because they're not face to face and all that kind of stuff. Yeah. I don't 

Kyle McCormick, PharmD: have relationships. I can, I can even text some doctors, um, to say, Hey, what do you think about this? 

Mike Koelzer, Host: We have the value of using any of. Technology. They do. We don't have to though, 

Kyle McCormick, PharmD: right?

Yeah. So I can do a lot of the communication between patients and physicians. A lot more efficiently to where there's no point Mel ordering generics, the way mail order views, community pharmacies is we're going to the community. Pharmacy of the future is just going to be for acute antibiotics and for pain medication.

Well, you can't keep lights on with just antibiotics and pain medications. But we know that it has to exist. And so I think that there's a place for a community pharmacy for playing a bigger role in the medication management side, dispensing generics, and, you know, sticking with the antibiotics and acute stuff.

But the brand, why it doesn't make sense for us to carry the brand is what you hit on it's expensive. Is that. I don't blame insurance companies for wanting to put narrow contracts. They can actually pick up better negotiation whenever they control something so expensive, they can negotiate better prices if they're doing their jobs, not just hiding money at themselves, but they could negotiate better pricing if they controlled all of the dispensing of that.

Higher cost medications for a 

Mike Koelzer, Host: while. They can try to control it just by screwing people who are able to be screwed, but that's not going to last forever. Once the pharmacy shut down out of this, you know, for 

Kyle McCormick, PharmD: like a thousand dollars, right. A new medication, it's a lot cheaper to have five of them on the shelf in a mail order versus one on five different pharmacy shelves, because you don't know if the patient that ends up needing that $1,000 brand name medication is going to be in your community or the community over.

And then they'll have to order a thousand dollar product. And then all of a sudden you still have the five sitting on the shelves, enough, five individual pharmacies, but mail order, they can just [00:40:00] say, you know, we'll just send it out. Basically gets there in two days and most brand name medications.

Aren't the acute medications. They're chronic, or they're not something that's needed. Right. I can't think of a single brand new medication that's urgently needed. I've never wanted to be a dispenser of specialty medications. The only incentive there was that at one point had a high profit margin.

And I don't think we ever want to view ourselves as going after high profit margin medications 

Mike Koelzer, Host: anymore. Let's even say that you make something a percent matter when you're dealing with stuff that is expensive. Let's say you have a medicine that's $10,000 and let's say you're making. Some minuscule amount, a hundred bucks, but you look at the hundred bucks and say, yeah, but you know, that would buy Chinese or KFC for my family for the weekend or whatever.

Maybe I'll do it. But that $10,000, even if you get paid right away, even if you're not carrying the inventory, there's a ton of other issues, you know, being an audit or giving the wrong medicine to someone and then walking out the store. You can take it back. I mean, that's why you have to have the percent involved in those expensive ones.

You can't just go buy a pretty good looking fee. 

Kyle McCormick, PharmD: I agree. Um, but I, I, I don't think that's the role of a community pharmacy. I've never thought that yet our 

Mike Koelzer, Host: businesses look very close. I'm taking insurance. You're not, but gradually my customers are using truly less of their insurance, right. Because the deductible is not being hit and it's really coming out of their own pocket.

However you slice it for me. I think it comes down to a marketing thing, and also slack. What do cities look like where I am in the country? And so on now, I haven't had enough time to think about this because we're into it about four months now. It's looking pretty good, but the next step would be something like you've been talking about services and doing this and membership and that kind of thing.

If you could give me advice, what would that advice be about the insurances about saying scrump don't you 

Kyle McCormick, PharmD: already want to say that though? Oh, for sure. I want to do that. What is holding you back? 

Mike Koelzer, Host: What's holding you back is that let's say that we've got a regular flow of people coming in or servicing them or doing things similar to what you're doing.

Not the same, but. A little bit closer, but in their mind we still take their insurance. I don't want to say we're a bait and switch, but it's almost like a comfort level. Like, well, Mike's pharmacy is not doing our brand name, but they still take our insurance, but they might sometimes help us with the cash and the deductible and all this stuff that we're talking about.

My thought, even though I love marketing and it's intriguing to me, is, and don't get me wrong. I also know that by narrowing something by saying, we're doing what blueberry is kind of. Huge value in that of setting yourself apart in this kind of thing. I just haven't figured that out in my head yet. So to your point, yes, I do hate it.

What's your next 

Kyle McCormick, PharmD: poll? To some extent, it's actually freed me up to have better conversations with people about the role of insurance and why, like, I can't think of how many people I've shared the example of, you know, you don't, you don't buy car insurance hoping to get your guests. Um, I can also expose PBMs pretty regularly.

And a lot of people are just shocked that the medications cost less or just as much as their insurance would. And then it opens up that conversation about, well, is your insurance really what you think it is? Or is it, you know, is it doing what it's supposed to do? Positive marketing. I guess to your point of view it is like, as a marketing tool, in a sense.

Um, but from the opposite perspective. Yeah. So like your marketing tool with insurance is that it's kind of the, the baseline for pharmacy is like every pharmacy accepts insurance. So that helps get patients that way. For me, it's like, well, um, it definitely has been a challenge because it requires education.

It requires education on the provider. It requires education on the patient. But it definitely leads to some interesting conversations. Um, and word of mouth is a great marketing tool. 

Mike Koelzer, Host: And I would say that for the first time in history as each week goes by in fact, your stuff's making a lot more sense because a year ago I hardly even thought about this.

I'm like, well, there's no way I'm going to not do insurance, but now it's like what the deductibles and with the communication and all that kind of stuff, it started to make more sense. 

Kyle McCormick, PharmD: Yeah. Once I heard the idea of you don't buy insurance for low costs, known private things, like something that I've never thought about it this way, but whenever you think about the drugs on our shelves, that cost a penny [00:45:00] to 10 cents, it is silly to buy insurance for this.

And I have conversations with, uh, Medicare patients who say, well, you know, I love my insurance. It makes my co-pays. And I'm like, well, if you think about it, it's probably not doing what it's supposed to do then, because if it's actually paying out for things that already would be five, $10. Um, is it actually, if you were to go on something high cost, unknown, is it actually going to do what you think it's going to do?

Um, because it's probably not, I don't know when that transition happens. I don't know how it happens, but I think that that is kind of the future. Pharmacy in that, uh, the generic and brand specialty divergence. Oh 

Mike Koelzer, Host: boy. We really have almost identical customers except that mine, mine are from reject insurance customers, helping them out with.

Costs plus stuff we were talking about earlier and so on versus you coming right out front, I've never been afraid of doing some marketing and I guess there's no time better right now than to get out the stuff that you're talking about and becoming the second pharmacy in the nation are doing, 

Kyle McCormick, PharmD: You know, I do think it's hard.

I think it's hard to transition from an, uh, a traditional model to a model like this. I was asked by a colleague once, do you see the future of Lemuria pharmacy being more blueberry pharmacies or just a transition? And honestly, I see it being more blueberry pharmacies than I do a transition. It's very hard to 

Mike Koelzer, Host: transition people, starting as blueberry versus changing from a traditional, 

Kyle McCormick, PharmD: the startup costs are so low.

Yeah, the conversion costs are difficult. 

Mike Koelzer, Host: This gave me a ton to think about one of the things I like. I think there are some transition values here. One of them, like, for example, with us now is I could set up some kind of name, brand consulting, something, you know, now that it's like, I've washed my hands of it.

Now it's like, Hey, we're going to give honest answers for everybody. Who's got name brand questions and maybe needs to save some money on them and stuff like that. So that's a fascinating thing right there. 

Kyle McCormick, PharmD: My friend, who's actually going to be buying into the pharmacy shortly. He, um, regularly challenged me.

That challenges me. It's a question of, is it all just about cost? Um, because we don't want to just be, you know, race to the bottom. And my response is it's initially about cost until we have a change of mindset. So pretty much every conversation I have with a patient, whether they're clinical or cost, it all starts around costs.

But it quickly becomes clinical. So thinking back to that story, I shared about the husband and wife. They initially came to me regarding the cost of their medications, but it became a full-on 

Mike Koelzer, Host: CMR, absolutely 

Kyle McCormick, PharmD: MTM session. So, that's the other thing. Um, from a clinical perspective, we have adherence metrics.

We have, um, quality of care metrics. Um, to some extent, those are. Cost questions as well. And so I'll highlight a couple. So like people ask me about, what about adherence? What do you do about adherence? And my response is, well, I care if the patient is taking the medication, I don't care how many fields I get.

Um, because especially around the membership model, right. Not driven by refills. My goal isn't to get to Murray, Phil. My goal is to make sure they're on the right therapy and actually taking it correctly to get the benefit from it. But I don't need that refill, so I don't need to be chasing refills.

So, um, so yeah, I do care about their adherence, but it's more from a, is this working for you? And if not, why not? Like what side effects are you having? A lot of what I do comes down to the philosophy that healthcare is only effective. If the patient can afford it, And so any other thing I thought about recently is we have a lot of power to improve a patient's health as health care providers, pharmacists, but we also have a lot of power to financially burdened patients.

And so I think about a lot of what I do from those perspectives, um, just dealing with a patient that has three quarters of a million dollars in medical debt. And still has high cost prescription drugs. And so, um, I'm driven a lot by financial status as a health indicator. So we have the, you know, the vital signs and I view financial ability as one of those vital signs.

If a patient can't afford the medications that are given, they're not going to take them where they're going to take them incorrectly. And so we as pharmacists have to play a role there. Yeah. Uh, even [00:50:00] valuing CMRs MTM, I've always been curious. A lot of the studies use our impact or our recommendations and put a dollar sign on, you know, cost of hospital visit avoided or exacerbation of asthma avoided.

I've not actually seen studies that actually take into account direct cost savings for a patient. How much could we save a patient directly? Even before those actuarial numbers, like I'm, I'm convinced that we can actually save a lot more. Uh, whenever I work with patients to get them on manufacturer assistance programs and I immediately limit, uh, eliminate, you know, $6,000 a year medical spend and not to mention that they're actually now taking the therapy, they might now have avoided a hospitalization.

So that's on top of that. So I think there's a lot that can be said about the clinical side of things. Whenever you start focusing on the patient's financial side of things as well, 

Mike Koelzer, Host: Maybe the average pharmacist who's making the average pharmacist amount of money has surpassed Maslow's hierarchy and they're making above 60,000 or something.

Maybe 10 bucks doesn't matter quite as much because it's like a savings, like, well, okay. Download on Kindle or whatever, but for the people who are talking between eating that day and medicine, while eating is going to come first, their needs are way different from ours. I don't think a lot of our listeners can appreciate it.

I can. I think a lot of people can't really appreciate that. 

Kyle McCormick, PharmD: No, it's true. Yeah. I mean, it really opened my eyes. Whenever the wife basically said I can't afford insulin. Uh, two, four months later when she had a whole different outlook on her diabetes. 

Mike Koelzer, Host: Exactly. The 

Kyle McCormick, PharmD: focus is different. A complete, like asking what made me say, oh, it's more than just costs.

So cost is what brings them into the door. It's how they hear about us. But it's more actually about what all we do beyond that it's even resonated with doctors, uh, now as well. So doctors refer patients, not just about cost, but also, you know, what's the best insulin for my patient to be on. What's the best GLP one for my patient to be on?

It's first about costs, but then it's also about, you know, well, which is actually clinically the best one for their patient to be on. So I've gotten a lot of referrals from positions, uh, and possibly more to come on the physician side of things for, from a service standpoint, um, for this type of model. Um, and so, uh, whenever I say, will it be successful?

From a number from a monetary side. Um, I like it, I'm pretty sure. Uh, but from a, like a feeling like it's the right thing to do, um, like definitely what I had to remind myself from the money side of things too, is like, this is recurring. And as long as I don't lose a member and I'm averaging. Uh, daily, I'm averaging a new member a day.

And so even if I have like a low attrition rate, 20% or something, I have to remind myself that even though I'm only averaging a new member a day, that we're coming up on a year now. So memberships will start renewing. It feels like not much money right now. Like as that compounding effect takes a hold.

Uh, and as long as I am committed to providing the best care for the members and they don't want to. It has to be sustainable at some point. And 

Mike Koelzer, Host: Here's the thing I'm looking around at. Like everybody's looking at me, but I'm just so used to the PBMs, you know, on your back. No, one's trying to kidnap them from you really and forcing them to go somewhere else.

Kyle McCormick, PharmD: It's the other payer and healthcare that is often forgotten about that I'm dealing directly with, this is the true payer in healthcare too. If you make a connection with the true payer of healthcare and as long as you're not ridiculously priced, Right. There's no incentive to necessarily leave because even if they could at my prices, even if they could get a dollar less somewhere else, It then becomes more about the service.

Mike Koelzer, Host: I just gotta tell you this last thing about your height. We get broken into about every two years or so. And actually they caught three guys out of Detroit and the DEA I met with the other day and they happened to have caught these guys, but our last burglary, these guys didn't get in because.

When they were stopped by the DEA about a month ago, not apprehended, just stop. They stole all their saws and stuff out of their car and our windows. We've got this special glass, you know, this got this like shield in it that you can't break it. You have to actually see through it like a Hacksaw kind of thing.

In this last one, the day made these guys start over. So they were like going old school with sledgehammers, you know? So we have a video of this guy talking like 32 hits at the back of our window. The glass company comes out and this glass takes a long time to order. Apparently it's been a few weeks now already because it's specialized.

You know, so thankfully the glass company said, Hey, listen, instead of. I would like a panel up [00:55:00] here. We can just put on like a covering on this, so you can still see your window, but it's going to be safe because the window is shattered, but it never fell out. Okay. Because of the special glass. So they've got these shields up there and so you can see this beautiful broken glass, you know, on two windows.

When you come up, it looks like God's frost painting, you know, on a cold winter morning, except that it's broken glass from some convict anyway. It's been like three weeks and everybody comes in and asks about the damn thing and I never thought something like that would bother me. So I've got my story down already and I kind of switched it a little bit.

Then I throw the DEA and I decide who I want to tell what to and all that, but it's just, you know, you kind of smile and you know, it's a little conversation piece. And then I was thinking about you, Kyle, I knew you were a tall gentleman on your actual website. You have something that, yes, I am talking about.

I played basketball, things like that. And I'm thinking. I've put up with this for three weeks now. And I said, thank God. I'm not Kyle. Yes. Yes. 

Kyle McCormick, PharmD: How tall are you 

Mike Koelzer, Host: because of your height? I can live my life answering about the window for another week or two. I 

Kyle McCormick, PharmD: really want to say whenever somebody says. Did you play basketball?

I want to say, are you a horse jockey? 

Mike Koelzer, Host: Yeah, you should. Or switch categories. They're first thought of you as tall, but your first thought of them might be, they're kind of a Squatty fat lady and just ask them how much they weigh. Well, Kyle, my gosh, the whole world's watching. You're like the Truman show. I mean, every pharmacist who has a bad mouth, the PBM, and so thus, every pharmacist is watching you and learning from you.

So thanks for being on the show. Oh, 

Kyle McCormick, PharmD: Certainly thank you for having me. I'm a big fan of the show, as you can tell. So I appreciate all you do and you get some great guests on here. So I hope that I can live up to some of them. Uh, episodes as 

Mike Koelzer, Host: well as you will. Hey, do me a favor. If you can maybe even pay someone for this, go through all the episodes and, um, listen to them again.

Try to get at least one quote from me. All right, guys. Well, thanks 

Kyle McCormick, PharmD: again. Bye bye.