One Year In: Michael Hogue's Crusade to Transform Pharmacy | Michael Hogue, APhA

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

[00:00:08] Michael Hogue: I'm Michael Hogue. I'm the CEO, Executive Vice President of the American Pharmacists Association in Washington, D. C. We're the national professional association for all pharmacists, pharmacy technicians, student pharmacists, and pharmacy scientists. And uh, today, I hope we can talk a little bit about our profession, some of the challenges that we're facing in the profession, what I'm doing and APHA's doing collectively to try to fight those battles, and on behalf of the profession and our members and then maybe talk a little bit about some of the things I see that are hopeful out there in the environment.

[00:00:46] Mike Koelzer, Host: Well, Michael, speaking about challenges, the last you and I spoke, you were just lowly dean of pharmacy at a university, and now you're here in Washington. How has the transition been? Is [00:01:00] it okay? Are you pulling your hair out? Do you wish it never happened? Give us an update on that.

[00:01:07] Michael Hogue: Well, I have to tell you that I'm pretty passionate about the profession of pharmacy. For people who know me I eat, breathe, and sleep at pharmacy and just love our profession and love the. Folks in our profession. And I love being able to talk about our profession to people who don't really know what we do and don't understand.

So, there's an awful lot of people in Washington, D. C. who have no idea what pharmacists do on a day to day basis. And for me, it's fun to just get up every morning and come to work and try to tell that story. I think we've got a great story to tell.

And For me, it's really fulfilling to get up every day and get to tell that story on behalf of 340, 000 pharmacists across the country.

[00:01:49] Mike Koelzer, Host: When I picture politicians, that a group that Is a sponge. Do they seem receptive to information? [00:02:00] Do they seem like they don't want to be bothered? I've heard before some politicians in town here, they say they want to stop at county government because that's the purest and so on. What is your take, Michael, living and breathing now in Washington?

[00:02:15] Michael Hogue: I think one thing that's really interesting, Mike, about DC is that there's really two groups of people here in Washington. There are elected officials and appointed individuals who are appointed by those elected officials and those folks are what I call short termers, even though some of them wind up being here for, a few decades, like some of our senators.

 but for the most part they're generally here for short periods of time, especially the appointed people. So think about it for just a moment. Secretary of. Health and Human Services. The Commissioner of the FDA. Those are political appointees and they tend to be there for a very short period of time.

The other group of people in D. C., are [00:03:00] the career federal servants. The federal employees. They're career employees of the government. It doesn't matter which administration and which political parties in power, they're here. They're doing things in and out. And so, I think one of the, probably the lesser known things about what, APHA does is that we have to connect in both of those realms.

We have to really work hard to make sure that The career folks, those career federal employees who are really the ones writing the policy and making sure that policy happens. They understand pharmacists. They need to understand. So there's a lot of relationship building that I do. On the hill with politicians, of course, there's so much turnover.

You've got to find the wins and you've got to find the way to make people, make connections, and so it's just a different skill set, but again, it's all about relationships and I think that's the thing that you just got to do when you're here in Washington. You have to essentially learn how to be [00:04:00] apolitical.

You can't favor one party over the other, and you've got to learn how to get your message across to both those politicians who have something they're trying to accomplish in a very short period of time. And those career government employees and servants who are trying to just help our country run. 

[00:04:16] Mike Koelzer, Host: Michael, parcel us out a little bit. When we talk about a politician and then the Rules that are put forth.

Is that sort of right? Where the policies and the laws sent through, but on purpose, they're a little bit nebulous or they just can't even get that structured until it goes down to the lifetime organizations that are there, the FDA and all that, and then they put all the minutiae together to make sense of what that bigger law said.

[00:04:48] Michael Hogue: Well, so, politicians set direction, and employees, the long time employees of the agencies then are faced with enacting [00:05:00] those directions and carrying out the instruction manual. and every administration has different priorities, different things that they find important and so they give direction.

And so maybe Mike, what would be good is just to kind of give a bit of an illustration, and maybe illustrate just a little bit for you what that might look like. So, I probably hadn't been on the job about four weeks, and I got an invitation to come to the White House for a briefing with Secretary Becerra and also attending that meeting was the administrator of CMS.

Of course, CMS is hugely important to pharmacy. and so that was an important meeting. And also attending that meeting was the White House domestic policy advisor, Neera Tandren. And so if you can imagine this, sitting in a room at the White House with political appointee, the HHS secretary [00:06:00] and the administrator of CMS, also a political appointee, and then the policy advisor for the White House also a political appointee.

 you realize you're sitting in a room with people who have an objective and a very limited time to accomplish their objective. And if I can be effective at helping communicate to them what our key priorities are, then I've got the support of those. political appointees so that when we go meet with the long term staffers of CMS, hopefully they're then running things up the flagpole and getting support from those political appointees.

And so that's kind of an observation of how you get things done. You've got to work behind the scenes to make that kind of change happen in those conversations. And, the other thing that we do in DC, you have a meeting, And you try to just get another meeting. You just try to, you try to continually have face time with these individuals.

So when you get your [00:07:00] first meeting, you have another meeting. And then that meeting begets another meeting. Which, it seems like it takes forever. But we have seen positive change happen even in just the last few months because of these discussions. 

[00:07:13] Mike Koelzer, Host: those all, I'll have my people call your people? It's not two of you pulling out your phones.

[00:07:21] Michael Hogue: Well, I mean, we have staff present from the organizations. I always have staff present with me. My, my government affairs folks are highly involved in those meetings. And sometimes the follow up, depending on what the follow up is, happens with APHA staff working closely with the staff at those agencies.

So, yeah, I mean, people may not know this, but APHA has a full time staff person who just works with the federal government agencies, and we have two full time staffers who work with Congress and the administration and are registered as lobbyists to work with Congress on getting bills passed.

[00:08:00] We have additional support personnel that we use with the state legislatures and work with the state. Pharmacy Association. So, we've got a pretty big team that are working just on health policy at APHA trying to address some of these issues. 

[00:08:15] Mike Koelzer, Host: Michael, what is your physical day? Paint that picture. You're living in Washington, driving in. Are you at your desk? Are you meeting with your people? Are you going to lunch with some of these politicians? Are your tied up with all this meetings and stuff? What does a typical day look like for you?

[00:08:33] Michael Hogue: Well, a typical day is hard to describe because there's not just a typical day, but I'll tell you, I usually get up every morning about 5. 30ish. I make my own cup of coffee every morning, I scramble my own egg, and, uh, and I live 1. 6 miles away from APHA's headquarters. APHA's headquarters is on Constitution Avenue across the street from the [00:09:00] Lincoln Memorial,

and I live in, if you're familiar with D.

C., I live in the Penn Quarter. my condo is down just near the National Portrait Gallery for those who've done the tourism things. And so it's 1. 6 miles in. After I've had my toast and eggs, I'm hoofing it in and walk to work. I'd actually walk the 1. 6 miles and it's a time for me to clear my head and to think about the day that's in front of me.

And then by the time I get to the office the sun's usually up or coming up and I just think carefully about the day. So then I have some time in my office to kind of prep and usually have my first appointments around 8 But Maybe the best thing to do is just tell you about tomorrow.

Tomorrow is an interesting day. so tomorrow I come into the office. I have an 830 call that's a comms call to make sure we're getting the right messages out to our members and information going out to them. I then have a one on one with one [00:10:00] of my direct reports just to talk about the things that they're working on and advancing that work.

Then later in the morning, I'm headed up to Silver Spring, Maryland to meet with the FDA commissioner and having that call, talk and discussion about drug importation. That's one of our key issues. We're going to talk about the DSCSA implementation for this fall and what that looks like.

And we're going to talk a lot about drug shortages and how , Pharmacy needs to be working more closely with the administration on addressing drug shortages and protecting the rights of compounding pharmacists and making sure that pharmacist compounding is still seen as a vital way to help solve drug shortages.

So, that's the FDA Commissioner. Then I travel back here to Washington and go down to Alexandria for an afternoon 3 o'clock meeting with all of the other Pharmacy Association CEOs. We have a joint commission of pharmacy practice organizations and the CEOs get together for about [00:11:00] an hour and a half, talk about what's facing the profession and how we work better together to make sure that we're leveraging resources and accomplishing the profession's goals.

That meeting ends, and then I'm headed over to the White House for the retirement of a party for a longtime staffer in the area of HIV and AIDS policy who's been vital to helping advance the cause of pharmacists prescribing and providing HIV pep and prep therapy. So I'll go through that, and then I have dinner with a group of colleagues from the other pharmacy associations tomorrow night.

So tomorrow my day starts at pretty early and ends at about 9 o'clock tomorrow evening, so. And I, that's not an unusual day. That's fairly typical. Heh.

[00:11:47] Mike Koelzer, Host: Are you

[00:11:47] Michael Hogue: Yeah.

[00:11:48] Mike Koelzer, Host: all those or Uber or what?

[00:11:49] Michael Hogue: I have a car here, but I hate driving in D. 

[00:11:52] Track 1: C. 

[00:11:53] Michael Hogue: And so, I ride the Metro, or I take an Uber.

[00:11:57] Mike Koelzer, Host: Michael, what was the biggest [00:12:00] surprise in Washington? What's something that you didn't realize that was going to happen with this new living arrangement and so on.

[00:12:08] Michael Hogue: Well, I think I knew there was a lot of travel involved in the APHA CEO's job but I think the travel has been even more intense than I thought it would be. I find that fortunately or unfortunately, I know a lot of the staff at Reagan National Airport. I spend a lot of time in them.

And especially in the Delta Sky Club.

 I spend a lot of time trying to fly through. But, yeah, no it's a lot of travel. And, I came from Southern California and had a routine, you can get in a pretty good daily routine of exercise and diet and so forth 

when you're traveling from one city to the next and, sometimes I'm on a plane every day, going to a different place It can get kind of hard to get in a good routine, so I've had to pay really close attention to my physical health and make sure that I'm doing the right things, eating the 

[00:12:56] Track 1: right 

[00:12:56] Michael Hogue: foods and exercising, and keeping myself [00:13:00] healthy,

[00:13:00] Mike Koelzer, Host: You look good, by the way.

[00:13:02] Michael Hogue: I appreciate that.

[00:13:03] Mike Koelzer, Host: Way to go. 

[00:13:04] Michael Hogue: not where I need to be, but I'm getting there.

[00:13:07] Mike Koelzer, Host: What do you miss physically the most about your job, you miss having doughnuts in the morning with your professors or you miss, visiting the campus, whatever. What do you miss most about the actual physical location? 

[00:13:20] Michael Hogue: Well, being at Loma Linda University in Southern California, it was such an interprofessional collaborative environment. I mean, I was around physicians and nurses and dentists and other health care providers all day long. on the campus, and I miss that day to day interprofessional collaboration, although we have some of that at APHA and working with other organizations, I mean, it was just a constant part of every day at Loma Linda and I really valued that team environment.

And then, Students have so much energy, and they are so creative and come up with so many great ideas. Just, I don't have [00:14:00] that day to day with, with pharmacy students, and so I kind of miss that, after being attached to academia for quite a long time. 

[00:14:09] Mike Koelzer, Host: don't fly very much, let's say once every couple years or something. let's say I fly down to Arizona to see my brother in law or something and within about three or four days I realize I haven't seen a child. Anywhere and it's just amazing the different areas you can go and things are just kind of different.

[00:14:27] Michael Hogue: I had the opportunity back in September when the pharmacists from CVS Caremark made the decision to walk out of the pharmacies and protest working conditions, to visit Kansas City, I am so thankful that they allowed me to come and meet with them and have those conversations and discussions.

It was helpful for me on a lot of levels to be able to connect with them and really hear from them and their front line. I was a chain pharmacist back in the day, but it's been a long time and Things [00:15:00] have changed it's helped me stay in touch and then two Fridays ago, I flew down to North Alabama and met with a group of independent pharmacists in their pharmacies, went behind the counter with them and I needed to get in touch with what was really going on with DIR fees and the cliff that's, that we're facing and the reimbursement challenges that pharmacists are facing.

I had the chance to meet with about six different pharmacies with, 12 or 15 different pharmacists and hear their stories and see in real time what was going on understand that and I did the same thing a few weeks ago, went up to Delaware to meet with a colleague who owns a pharmacy and, uh, uh,in smaller town had the chance to kind of just Be with him and see what was going on and experience it.

For me personally, Mike, I think it's just vital in my role that I Connect with [00:16:00] pharmacists in their practices that, I can be much more effective in Washington as an advocate for the profession if I'm standing with the professionals, shoulder to shoulder with them and I'm speaking with their voice and amplifying their voice, not my voice, but their voice.

So that's what I really enjoy about the travel and I try to make that a part of everywhere I go.

[00:16:26] Mike Koelzer, Host: when you were saying that, Michael, picture the president of the U. S. having to talk to families who maybe their children died in service and the president has to go up and talk to them and both give their sympathy, but maybe take the brunt of why the service person died and they're mad at the U S because of this or that. that solemn event made me think about when you're visiting pharmacies and I'm wondering if you get the red carpet sometimes or you get the, like, why we're mad at the world kind of thing. and I'm picturing [00:17:00] that scenario. I You get some of both probably because you are the pin cushion 

[00:17:04] Michael Hogue: yeah, no, actually I love getting both parts of that feedback to understand frankly where the frustrations really are, where the rubber meets the road. It's really important.

And I've said this many times before, folks that have read some of the blogs I've written and other things, I've said this, but talk is cheap and,

 We can talk all day long about the changes that need to happen.

But the reality is that action needs to happen , and it's not enough to just talk about what changes need to happen in our profession. We've got to take real action, most of these issues that face our profession are not just simple issues. They're very complex, and I kind of it, it's kind of like a knot in a rope, You start with a rope, you've got a strand that has two ends and it's straight, right? end A goes to end B and it leads somewhere. But then you tie the first knot through and now you've [00:18:00] made that. Transversal from point A to point have to go through a loop. And what's happened in our profession and the complexity, particularly in the reimbursement around pharmaceuticals and how pharmacies get paid and how they staff and hospitals too.

This is not just community pharmacy. This applies to hospitals and outpatient. There's another not, and there's another not, and there's another not, and then what I'm discovering is that the nots are so complex that, we think that if we just say, we need PBM reform. Voila, that's going to untie all the knots and solve all the problems.

But it isn't. It's much more complex than that. Will it solve a problem? Yes, it could solve a problem. It will get to a portion of the issues that need to be solved. But as I get on the front line and I talk with pharmacists who are in practice and engaged in this struggle every day,

I discover another strand in that [00:19:00] complexity of that rope that I didn't know existed. And that I think we illuminate that those things are there and we begin to see that these knots were tied over 40 or 50 year period of time. They weren't tied today, just in one moment. So that's the beauty of getting out and getting into pharmacies and into hospitals and into practice environments and really seeing what's going on and hearing from pharmacists.

[00:19:30] Mike Koelzer, Host: On that not analogy one of the people on my team was excited when Michigan was coming out with some of their PBM reform and saying this and this was going to happen. It's going to be good. I'm like, yeah, don't hold your breath. I think one thing that some of this reform is bringing is it's clearing up a little bit of the mess that I think was put in there on purpose by organizations.

I'm thinking more the insurances and PBMs to kind of cloud things [00:20:00] up so that when you and I would go and speak to a legislator and tell them about DIRs, how Well, you have to understand Mrs that, we do get paid this, but then seven months later, this big comes out and we don't know what it's from or what prescription it was from, 

and I almost think like their eyes like go back in their head because they're so confused.

I think that some legislation, even though it may not move the ball forward. At least it clears up some of these games so that when we talk to politicians, they can maybe understand it a little bit better.

Let's say when the DIR retroactive things are gone, that kind of stuff. I don't know. Do you think Michael in your career, it's. to explain the problem to somebody now because they know about it more or is it just as 

[00:20:59] Michael Hogue: well, I [00:21:00] think as I've talked to people who are outside of healthcare about our industry I hear people say that. The pharmacy segment of the health care industry is probably the most convoluted and confusing of the entire system. And I hear people in other industries say that, while their industry might be complex, they would never begin to hold a candle to the complexity of the pharmacy payment system in the United States.

there's no question that we have complexity to it. I recently had the Good fortune to be able to sit in a session with Walter Isaacson. Walter Isaacson was the author of the biography on Stephen Jobs, and, of course, it's sitting here on my desk Elon Musk's biography.

And Isaacson has lots of experience in media and in writing and so forth, but he made the observation The thing that these giants in tech have been good at doing is taking [00:22:00] very complex information that the average person can't understand and explaining it in such a simple way that it becomes understandable and actionable.

his advice was figure out how to tell the story of pharmacy and pharmacists in a really clear and understandable, simple way so that anyone can get it anyone can see what's going on. it's just been the nature of our industry that we speak in.

Acronyms technical jargon and, and we use this on Capitol Hill and in other places and people, like you said, their eyes roll in the back of their head and they're like, What the hell are you talking about? And, uh, and so, so, we've gotta tell a better story. So 

every time I spend another day in practice with a pharmacist on the front lines and understand what's going on in their practice, or I spend a [00:23:00] day in the hospital and I'm working with the pharmacist there to see what's happening on rounds it helps me understand the story and understand it right I'm a pharmacist.

I've worked in a lot of pharmacy settings. I have real practice experience so I have my own ideas but things change so quickly it's very helpful for me to be able to just get more of this story and see more of it I think we're just gonna have to learn how to simplify this story in order to be able to untie the knots and that's the critical piece.

[00:23:30] Mike Koelzer, Host: You see it all the time with the Media, where they don't want you looking in this figurative corner and so they have some fuss going on in this corner, so the story goes there and it hides this story.

And I think that the PBMs, I hate to say in their wisdom because I don't want to say they have any, but yeah, here I am talking about the obfuscation of all their language and so on. I'm waiting for them and the law to clear it up. But in fact. [00:24:00] They're doing that way to get me in that conversation where can, as pharmacists, despite the messy corner of acronyms and abbreviations and all that, we can lift it up and make it simple, but often we get caught in that trap.

[00:24:21] Michael Hogue: Let me also say another thing I've learned aboutPBMs, just something that, may be a little surprising to your listeners that that I've discovered and learned over the last few weeks. First of all I mean, pharmacists know this.

PBMs are not insurance companies, and that's a big point of confusion in the marketplace. The marketplace thinks that PBMs are insurers, but they don't insure anything. They actually just administer a benefit,

usually owned by either an employer or a health plan. And so, either an insurer's or an employer.

And so, so first thing is, you [00:25:00] just gotta understand that the people who are purchasing health care are confused about what PBMs are supposed to do. So that's very important.

Second thing that I've learned that I think is really critical to know is that Pharmacists understand that oftentimes PBMs cost our system tremendous money.

I think recently the Kentucky State Government realized that in their Medicaid program that the PBM was actually costing them over 250 million dollars a year. They eliminated their PBM and went to a self administered pharmacy benefit, saved over 250 million dollars. I don't remember the exact number, but It was a huge number, and I'm sure my friend Ben Mudd, the CEO of the Kentucky Pharmacists Association could give you the details.

but how does that happen? well it happens because of this rebate scheme. And, so what employers hear is we'll get you more rebate money, and we'll guarantee you the rebate money. And boy, that sounds really [00:26:00] attractive to a self insured employer or even to a state government that you're going to produce this rebate money?

Wow, I like rebate money. That's cash coming in. if you're a state government. Think about it. You get a budget from the state legislature that's based on cost, right? And if you're the state Medicaid agency and you can get rebates That's free money. That's money that didn't have to get counted in the budget.

Now I've got more money to be able to do things with. So I don't care that I overpaid. I don't care that the taxpayers of the state of Kentucky overpaid 250 million dollars. I'm just happy as a Medicaid agency that I got 25 million dollars in rebates because now I can use that money to do whatever I want to do.

That's the big game that we have to play with is this rebate scheme. and Gosh, Mike, we could dive deeper into all of these things. There's so many of these learnings I've come across with PBMs in the last few weeks that just these are [00:27:00] things that pharmacists need to understand.

How is it that employers and consumers and purchasers of health care are seeing the PBMs? We better understand it from their vantage point because Those are the people that have got to have this clarified. And pharmacists are not good at it. What do we say in pharmacy? We're underwater.

They're not reimbursing us fairly. , to the outside world, to those outside of pharmacy, that just simply sounds like a contracting problem to me. And you've got a problem with your contracts, that's your problem. And consumers just want the cheapest price for the drugs. But when you can show these bigger picture things about how the false pretense of rebates can actually cause programs to spend excessive amounts of money on administering their pharmacy benefit because of this quote unquote free money that comes in through rebates.

Gosh, you can just really change the whole perspective.

[00:27:56] Mike Koelzer, Host: Michael, that's fascinating because I've always thought [00:28:00] that, first of all, I've been in this business for whatever, 40 years, and I've always wondered how can everybody get the wool pulled over their eyes by not realizing that they're getting a rebate, but they paid too much. And I'm always, how could they be so blind?

But what you're saying is. Fascinating to me because I never thought of it that way, where it's a shell game, even with the company or the municipality, government, whatever. With that comment, do you think that's also true in corporations where there's some part of the corporation that says we know we're getting screwed on this original price, but we're going to get this rebate back and it's going to look great and we're going to have cash and all that.

I can see it in a government thing, but do you think it's also in a corporation that, that game?[00:29:00] 

[00:29:00] Michael Hogue: Well, I don't know to what extent employers really truly understand what's going on with pharmacy benefit managers and so forth. there are some employers out there and some health insurers that are starting to get wise to this. I mean, recently in the news was the decision of Blue Cross and Blue Shield of California, or Blue Shield of California to jettison a portion of their PBM contract and actually self administer a portion of it.

Not the whole thing, but a portion of it.

And in talking to the chief operating officer of that company, or CFO of that company and what they're doing, They are beginning to get the light and they're trying to help other Blue Cross plans across the nation understand it.

one of the things I've learned in having conversations in the last seven months of this job is that health plans actually, by and large, don't really like the PBMs either. The health plans find [00:30:00] them to be expensive and difficult to deal with and that they're challenged each and every day by how they do business.

So, it's an interesting time that we're in right now in that there's this big cacophony of voices on Capitol Hill from both sides of the aisle who are saying it's time to pass PBM reform. And I think probably when the budget.

passes here in March you will see a PBM reform bill as a part of the budget deal that's coming through Congress. So, I fully expect that's going to be the case and the House has already passed their PBM reform legislation. The Senate has a much more robust version of that and I think it's going to pass.

And I think it'll be a step in the right direction to began to untie a few of those knots but the downside is for pharmacists is that the implementation date that's been proposed in Congress is January the 1st of 2028. So that's not going to do anything for the current problems in the current situation [00:31:00] that face our profession, but you know, I think everybody realizes that.

There has to be change. That change has got to occur. So, that's important. And, Mike, 

 I want us to talk just a little bit about the pharmacists. who work in I'd like to just unpack something related to pharmacists that work in all these places.

[00:31:21] Mike Koelzer, Host: Sure. I want to ask, if you're willing, a few more of those things that you said we'd be surprised about with the PBM.

more of

And then what I'll do is I'll ask a question and I'll leave it with this that it's the pharma, and I'm not sure if this is where you're going, I always tell people the pharmacists are, they're my cohorts from different places, it's a lot of time it's the upper echelon, that pressure that they're getting, but the pharmacists are fine people.

[00:31:46] Michael Hogue: Yeah, I think just to say, we talk about all these organizations and aren't there pharmacists in all these organizations and how does APHA work through that? Since you're representing the entire profession, how do you work through that? That'd be a good [00:32:00] way to tee up the question.

[00:32:01] Mike Koelzer, Host: be employed by Optum

[00:32:03] Michael Hogue: That's right. Yeah. I want to talk about that because I think that doesn't get any airtime. There's no airtime or discussion of that.

[00:32:10] Mike Koelzer, Host: That would be who is the, in the C suite, even of a PBM and their pharmacist and how, what is their relationship kind of thing?

[00:32:23] Michael Hogue: Yeah, we can talk about that. Right.

[00:32:25] Mike Koelzer, Host: All right. Let

So, all right, Michael, now you brought this up. Give us some more dirt that you've learned on the PBMs. Because that was fascinating right there that some people want that rebate because it's

their pocket. What are some other ones?

[00:32:41] Michael Hogue: Well, another thing that I have learned that I think is just really fascinating to me is the relationship that the PBMs have with the pharmaceutical manufacturers. So, January 1st every year, the pharma companies change the pricing on their medicines. And, it's pharmacists, I'm sure, largely listening to your [00:33:00] podcast and everything is centered around AWP.

So, what gets reported in the press is the AWP of XYZ drug has gone up by X percent and so forth. What I began asking the question, why is that happening? What's going on? Is it just market forces? I mean, to what extent can you explain the AWP pricing of a drug simply to cover the costs of research and development?

What's going on here? And so I started just doing some digging into this and asking a lot of questions. of pharmaceutical companies and asking them how this worked and what I, and I won't mention the name of the pharmaceutical companies that I've talked to because I don't want to break confidences, but I'll just give you an example.

Before states started passing transparency in PBM laws and started regulating PBMs, which thank goodness the Supreme Court allows now, the [00:34:00] states to do some regulating of the PBMs, PBMs would just simply require some sort of a rebate structure from the manufacturer in order to have that drug listed as a preferred product on their formulary.

So it was all about rebates. Well, now you've got these transparency and pricing things going on with the pharmaceutical companies. So the PBMs changed their tactics. And so now instead of demanding, let's say a 60 percent of AWP rebate, okay, they now maybe only require a 25 percent rebate from the pharmaceutical manufacturer, a 30 percent rebate.

And instead now they've put into place. 14 or 15 or 16 different fees that they charge the manufacturer in order to have that Pharmaceutical product put on the formulary. Okay, so now the rebates the manufacturers are the [00:35:00] PBM will say to the health plan. Oh, yeah We are a hundred percent transparent.

We pass on a hundred percent of the rebates Well, the amount of rebate they're collecting is only 25 percent of AWP, and it used to be 60 percent of AWP, and they keep a bunch of it for themselves. So the employer or the health plan is still getting about the same amount of rebate they always got.

But the PBM is instituting all these fees and those are still invisible because none of the state regulations and laws require the fees to be reported. So the PBM gets to keep all of the fees and what I discovered within my conversations with some of the manufacturers is that they may have a list price, AWP, that's, pretty substantial over a thousand dollars on some of these drugs.

But they're having to, just to have that drug on the formulary. And adjudicated that they're paying the PBM oftentimes 60%, and I even heard, although I [00:36:00] haven't seen data to support it, up to 70 percent of the list price of the drug is getting paid to the PBM just to have that drug on the formulary.

So if you see a drug that has a price of 1, 000, you can imagine that the PBM is probably keeping 600 to 700 of that Isn't that extraordinary? I mean, so the, you can understand why a pharmaceutical manufacturer then wants to find a way around the PBMs.

How do you get around the PBMs? Pharmaceutical companies, pharma they're lobbying organizations on Capitol Hill supporting these PBM reforms too, just like We're on the hill supporting these reforms because they're getting taken to the cleaners and then the American consumer winds up paying higher prices in their co pays.

And I'll give you one specific example of how that's actually even, this is another aha, another gotcha, and this won't be too big of a surprise to a lot of pharmacists, but, and [00:37:00] pharmacies, but it might be if your listener's a hospital pharmacist and doesn't understand the community pharmacy side. So, let's just take a product, an insulin product.

Novolog, okay? Let's take that product. Novolog has a generic available, so there's a branded insulin, Novolog, and there's a generic insulin that's available as well. There are scenarios that we've, that are actually happening today, where a consumer will be forced at the pharmacy counter to purchase Novolog at a 60 brand name copay.

These are Medicare Part D plans who have a 60 copay for the brand name drug. There's a generic available, but the generic is not covered by the plan. It's off formulary. And so, they can't get the generic, now their generic co pay would be 10 because that's what their normal generic co pay is, but because the generic's not covered, because the PBM's getting all these rebates on the brand name insulin.

[00:38:00] So, and then a pharmacist says to the patient, look, I've got a generic for this product. It cost me 30, and I'll be happy to sell it to you. And we just have to reverse the claim, and then They get in trouble with the PBMs for having gone off contract or violated the terms of their contract by helping the patient get something that's far more affordable.

That is a perverse system where you've got PBMs being able to get away with that. It's just crazy. It shouldn't be happening.

[00:38:30] Mike Koelzer, Host: In our pharmacy, Michael, I don't carry any brand name prescriptions for all the reasons we're talking about here. And I will tell that quite often to a patient. I probably have this conversation, or my staff does, a few times a week where they come in and they say, does this Inhaler have a generic, so can I get it at your pharmacy? I say, believe it or not, ours costs a hundred. The brand name costs 500, but they're not gonna let you [00:39:00] get the a hundred dollars one because they want to keep the $500 in the system to it

[00:39:05] Michael Hogue: Yeah,

[00:39:06] Mike Koelzer, Host: And

[00:39:06] Michael Hogue: that's right.

[00:39:07] Mike Koelzer, Host: it, the only thing it has done really is it's allowed our business still to, function because people that we talk about conversations. That's a pretty easy conversation when you say, Nah, you've gotta, they want you to buy a 500 one instead of a 100 one. It doesn't take a scientist to

[00:39:28] Michael Hogue: anybody sees that doesn't work. Yeah,

[00:39:30] Mike Koelzer, Host: Yeah.

[00:39:30] Michael Hogue: see it doesn't work. And, a last little aha moment is you realize that employers and health plans but employers particularly, they're buying the 40 percent of folks in the U. S. who are covered under employee sponsored health plans.

Employers don't understand our industry. They find it very convoluted and confusing. So, they rely on brokers. to be able to advise them and brokers make hundreds of millions of dollars a year in kickbacks from [00:40:00] PBMs who incentivize them to steer people toward their PBM. So,

Pharmacy, pharmacists have got to break free from this system because it is destroying our ability to practice and take care of patients. it's creating. incredible downward pressures on the finances of pharmacies, on hospitals, on the entire system. And that downward pressure financially leads to less money to be able to hire people with.

 when you don't have enough people, you have incredibly intense, bad workplace conditions that are not just bad in. one environment. They're bad in lots of environments. it is one problem stacked on top of another that has to be unwound. And it's incredibly complicated, but I will say this, every day we are educating people in Washington about this and we're working very closely with our partners at the National Alliance [00:41:00] of State Pharmacy Associations and our state association partners to really get.

The people who make the laws to get them to understand, and they're getting it. They're starting to get it. It's really mattering. And I think what's caused that to happen is pharmacies are closing. And when you lose the only source of health care in your local community you start asking, why did that happen?

And when you ask the whys, it always comes back to this complexity of our payment system for pharmaceuticals. And everybody's asking the question, how do we get better? How do we make this easier?

[00:41:36] Mike Koelzer, Host: One of the reasons why our business has been able to continue despite only selling generics is because we're getting squeezed. The chain pharmacy's service has gone way down, maybe because of reasons and so on. I always tell our people that come in, I say, yeah, I know you got crappy service [00:42:00] over at such and such pharmacy, but you know what those pharmacists are my former colleagues, in school and around the city, they really mean well, they're getting pushed from on top, all the levels, all the vertical integration, pushing down and so on. But, and Michael, you and I. We kind of talked about this in an earlier conversation, the APHA is not only representing the, worker pharmacist, but you also have to keep in mind other pharmacists who you're Might start to be in this integration, whether it's a manager at a chain or an owner of a smaller chain, or, someone who's sitting on a PDM board, they're a pharmacist.

And so you talk about the knots and I think of where I always want to paint [00:43:00] everybody that's one level above me as evil, and that's probably not fair across the board.

[00:43:08] Michael Hogue: Well, Mike, herein lies the most difficult challenge that I think the American Pharmacists Association has to think about, is that, our tagline is For Every Pharmacist, For All A Pharmacy, and I think the most important word in that tagline is the word For. We support. We are for you.

We are in support of the pharmacist. We believe that it's regardless of where you practice as a professional, we're an individual membership association. So I think there's this kind of belief out there that APHA is this grandfatherly type organization and that we're going to do the right thing for the profession all the time and we do our best to try to do that.

But our real purpose is to support pharmacists individually. [00:44:00] So, I could get pretty wound up, as you saw, on the PBM issue. Why am I wound up about that? Well, I'm not a trade association, so it's really not so much the dollars and cents themselves that I'm worried about as a business part, but I'm worried about what this is creating for pharmacists individually as professionals, and how we are able to fulfill the oath that we took when we graduated from pharmacy school to care for human beings and to do that to the best of our ability And so we're into the PBM discussion because we see that it's harming patients access to pharmacist patient care services,

[00:44:41] Mike Koelzer, Host: Michael,

[00:44:41] Michael Hogue: it's

[00:44:42] Mike Koelzer, Host: on a second.

[00:44:43] Michael Hogue: Yeah,

[00:44:43] Mike Koelzer, Host: I was thinking, and let me make sure I got this, because I don't want to have to steer you down the wrong track. I was thinking that you were still concerned about pharmacists who work in the PBMs and

[00:44:55] Michael Hogue: oh I'm coming there. I just haven't gotten there yet.

[00:44:57] Mike Koelzer, Host: Keep going. I

[00:44:58] Michael Hogue: going there

[00:44:59] Mike Koelzer, Host: I want to make sure [00:45:00] I asked it correctly. So, sorry. Keep going.

[00:45:02] Michael Hogue: I will get there so

[00:45:04] Mike Koelzer, Host: take your time, too. To send you down the wrong path.

[00:45:06] Michael Hogue: no, it's okay. You're good. so when I think about this, I try not to make assumptions. You know the old saying about that, and I won't repeat it since it's a family show,

I want to just say that, there are pharmacists working in every aspect of our healthcare system.

I believe pharmacists, all of us took the same oath, and I believe we get up every day With a desire to be able to fulfill our calling to take care of people from our perspectives. And so I think about, the pharmacists that work in management for corporations. I've interacted with a lot of great pharmacists that work for Walgreens and Walmart and CVS and Kroger and Albertsons and Publix and HEB and you name the company.

 They're wonderful people, and [00:46:00] they get up every day trying to make a difference in the lives of patients who their task was serving, and they're given a responsibility to do that on a macro level. And so they do that, and as I talk to them, I sense that's their heart, and that's what they want to have happen.

And yet, I see a disconnect happen down here at the store level when you're on the front lines with the patient and you don't have enough staffing to be able to safely provide the medication or you don't have enough staffing to be able to handle the immunization volume or to counsel the patient on the new prescription for methotrexate or whatever we're talking about.

And so there's a disconnect in there and so what I've been thinking as APHA is how do we help? that communication improve? How do we create systems and help facilitate better communication between the pharmacist here and the pharmacist here on different levels? How do we get that communication going and improve it?

[00:47:00] And then I think about the conflict that exists with PBMs, and I know that we've got, thousands. Of pharmacists that work in PBMs there are pharmacists within the PBM assigned to step care therapy programs.

There's pharmacists that are hired specifically to help patients. Get the best use out of their specialty pharmaceutical, and so they're working with patients every day, I'm sure those pharmacists get up every day With in their heart saying fulfilling professional to help patients get the best use of their medications.

And the same thing's true across the spectrum and we could go on and on. so it's real easy wherever we're at in practice to just sort of generalize, Oh, I'm against PBMs.

And then when we say that the pharmacists that work within PBMs begin to cower just a bit and say, well, Is the rest of the profession against me?

[00:48:00] Does pharmacy not support me? Am I not a part of the profession? and I'm sure that there are listeners that are hearing me say that and they'll say you're blank right. We're not happy with those pharmacists and I can understand that. so what's APHA's role here?

I think as an association we have to help our colleagues who are in PBM practice to understand what's really happening at the front store level because they probably don't have visibility to it. They probably don't see it. They don't know. They just know there's something painful going on, but they don't know what's happening and they may not even have any visibility on the contracting side of their corporation to know what the contracting folks are doing to the community pharmacist.

Be. Appalled to know all of the details of what that looks like. So, I think we have to help everyone in our profession understand what's going on in the rest of the profession, so that we can bring pharmacists together, locked arm in arm, to solve these big problems.

And, the [00:49:00] people in these organizations, the pharmacists in these organizations, I don't think intend, get up every morning with a plan of how can I put more community pharmacists out of business. I don't think they get up every morning saying how can we squeeze the profits out of hospitals so hospitals can't make any money.

I think the pharmacists that get up in the morning. with their job on their minds of the work that they're tasked to do to help make people's lives better. And they don't even think about the downstream consequences of what their corporations are doing to tear down the rest of the profession.

so, we've got to be a place at APHA that brings people together, that convenes people from across the profession to have crucial conversations and lists each other's support to be able to fix the problems. what I want APHA to do is convene people together and begin to solve big problems by getting people to talk and develop relationship and have discussion because that's [00:50:00] the only way we're going to overcome these problems.

Non pharmacist folks that are way up at the top, that sometimes don't understand our issues and drive pressures downward. The stockholders, the investors and so forth that are way up in these publicly traded companies that are just looking for a dime on the bottom line. we've got to have forces higher up in organizations saying stop.

we know what's going on in our profession. We've got to bring these pharmacists who are in these great positions in as advocates and get them to help change the narrative within their corporations, at the PBMs, all these places. That's what we've got to do. I want to facilitate that conversation and be the safe space where that can happen.

I want APHA to be the safe space where pharmacists can come together around the dinner table at home and have tough conversations. And be okay with that, because we're all part of the same family. that's what I'm trying to do.[00:51:00] 

[00:51:00] Mike Koelzer, Host: That's really interesting, Michael. I was just listening to a podcast this morning and talking about some studies that some professors have done in human nature and so on, and some groups don't want to even look at the study because it might paint them in the light and so on. it's like let's at least talk about it, even if you don't agree with it, it doesn't do any good to, it never hurts to listen. I don't know if I'll keep that in there, but I'm agreeing. That's fascinating well, let me approach it this way. Whoa. So, Michael, that's got to put you in a little bit of a bind if you've got one group that is not going that direction. In other words, let's say you have a group that says talking is good, but we're going to do a national strike, or we're going to do this, or we're going to embarrass this group in this organization and so on. [00:52:00] That's got to be a little bit of a struggle for you. Not necessarily to decide whether to do it or not, but to communicate in the middle of that process. Yep.

[00:52:15] Michael Hogue: open communication and relationship building are really key, but I was very, strong and continue to be very strong in support of pharmacists who felt as though they needed to walk out and take that position because ultimately at the end of the day, pharmacists have got to be able to fulfill their professional obligation to safely serve the American public in their environment.

Pharmacists have got to be able to be in a situation and when something's not going right and there's a potential for patient safety issue, the pharmacist has got to call time out. And you've got to be able to do whatever is necessary to make sure that prescription that you're filling or that shot that you're giving or whatever it is you're doing, that it can be done safely, [00:53:00] effectively and to the best of your ability.

we owe it to our patients to do that. So, I hate it that things have gotten so bad, unfortunately that pharmacists are in the position of having to take those extreme actions. I really do. I hate it. And I will say, Mike, to be honest pharmacists that were in Kansas City particularly they created a conversation.

They helped us create a conversation and I'm proud of those pharmacists for doing what they needed to do, but I'm proud of those pharmacists because they caused a conversation to start and we needed a conversation. I've stayed in touch with those folks and they have a really good dialogue with their corporation.

And their corporation has been listening and been fixing problems and those pharmacists have explained to me that they are. They're quite satisfied and much more satisfied than they were previously about what's [00:54:00] going on in their practice. And I think they see real change happening and they've seen that positively impact their practice.

That's what you want. You want dialogue. Unfortunately, sometimes it takes something festering up to the point that it has to explode in order to get attention. But, my hope is that in the future, we can have better dialogue sooner. That we can pay more attention to these details as we're going along.

And just, again, realize that It's better to deal with these issues before they get to that level and before they fester out of control And so that's what I'm hoping for

[00:54:39] Mike Koelzer, Host: I think the group that walked out a very good argument on their side to say, Look, we can be doing more damage than good in a situation. Maybe sometimes it's better for someone not to get their medicine than to get the wrong medicine or not have time to counsel somebody and things like that.

So, there is a time where it's better just to stop, I think.

[00:54:59] Michael Hogue: [00:55:00] Yeah, I think I Agree with you there. I think we just have to think carefully about how we move forward and what our approaches are going to be Realizing that some of what we're experiencing in the workforce, in the workplace could be solved by corporations who have strong bottom lines in their overarching corporate structure and they could redirect funds from some other portion of the business to be able to support the pharmacy business and the patient care that happens in pharmacy.

But then on the other hand not all of the companies have that vertical integration. Not all of them have all of the revenue sources and streams that others have. And those companies often function a lot like independents 

See the same challenges, and I mean, Winn Dixie was a grocer that had big pharmacies, and understanding what happened there was that the pharmacy was a drag on the grocery business, which already has thin margins, [00:56:00] and that was an implosion that in part had a lot to do with pharmacy, Winn Dixie's staffing had gotten down pretty bad because they couldn't afford to have 

People in the pharmacies and, it's unfortunate that things get to that point. those external forces, which is why, again, APHA has to be fighting. I've been criticized early on in my tenure at APHA about Fighting the PBM fight and trying to get pharmacists paid for their clinical services and provider status why doesn't APHA just shut up about provider status and PBMs and instead focus on workplace conditions, but that is not a good view because all of these things are inextricably linked.

Yes, there's a certain amount of the workplace issues that could be directly addressed by the corporations. But there is a much larger picture here that has to do with the revenue streams. Follow the money. If you don't believe that pharmacies make a good bit of money from [00:57:00] vaccines, Ask yourself, why is it that we're being asked to do, tens of thousands of vaccines, and pharmacies are now the number one place for adult immunization in the United States.

It's because the money follows that and flows for that and the corporations and the independents and everybody has said we'll do that because we can earn revenue that's meaningful from that. If we can create similar revenue generating opportunities for things like HIV, PEP and PrEP and so forth, 

improve the utilization of technology in pharmacies to help lift some of the burden of the dispensing off of our shoulders, improve the professionalization of technicians, and improve the pay of technicians to be a working wage, a living wage. Then we create revenue streams, and if the revenues there and the margins there I promise you the corporations are going to be happy to free up the time of the pharmacist [00:58:00] to be able to provide those services because the margins there they're going to want their pharmacist doing that You know, it's a both and it can't be an only one thing approach to being able to solve the issues that are going on in pharmacy and that's, every day that's what we do at APHA is we work hard to try to find all of those things and we've got teams of professionals here at APHA both non pharmacists and pharmacists that pour their heart and soul into making sure that patients have access to the care services of pharmacists wherever they interact in the healthcare system and we try to do that all across the system.

[00:58:37] Mike Koelzer, Host: Yeah, so cool the things you're saying, Michael. I mean, it's so easy to look at situations in this world. Unfortunately, I think the sides that are often against it, try to simplify it too much. Try to bring it down to one single issue and hardly anything is a single issue.

It's easier to pick it with that and fight with that and complain with that, but [00:59:00] rarely are things a single issue as you very well elaborated there.

[00:59:05] Michael Hogue: Yeah, and the other thing just to say we are a member organization and I do think that in the past There may be pharmacists who have said, well, I don't feel like APHA is representing me or I don't feel like I understand what the value is in being a member of an association. And, estimates are that as many as 50 or 60 percent of the professionals in our line of work are not members of any professional association, state or national, because they don't see the value proposition in doing so, and, I just want to help pharmacists find that connection and find value.

I want pharmacists to see that they as an individual are important to APHA and their career advancement and their career development is important to APHA [01:00:00] and that we are going to do whatever we have to do to fight for them but to also provide that tangible benefit to the individual pharmacist so that they can see how being involved in our profession matters and why it's an important part of the whole system.

 to say we're on Capitol Hill fighting is nice but for most pharmacists, they don't feel that or see that on a daily basis. To say we're at the FDA talking about DSCA implementation delays and so forth, that's important to some but for most pharmacists, they don't get that on a day to day basis.

It's not meaningful to them. But to help pharmacists be able to connect with ways to advance their personal career, and to find their way, for being what they want to be, and being in the environment, and fighting for that. Now that they value, because they want to be able to see that.

And we've not always done a good job as an association of helping pharmacists connect and see that. [01:01:00] But I can't change that unless I have individual pharmacists who are willing to tell me what's going on and be transparent with me. And I appreciate when I get emails and telephone calls from pharmacists to say, Hey, I'd like for you to see what's going on here in this part of the profession.

That's how I wound up in Alabama two Fridays ago. It was a pharmacist member of APHA who said, Hey, you're in Washington. I'd love to be able to show you some of the complexities of what's going on in our practice. And that led to me making a trip down a week later to Alabama to visit with a whole bunch of pharmacists about these issues.

It's important. I want pharmacists to see that we're there fighting for them individually and making sure that they have the practice that they want no matter where they're at.

[01:01:49] Mike Koelzer, Host: Michael, I'm going to sign off. And then when I stop, I'll say goodbye to you

So Michael, certainly have put your money and time where [01:02:00] your mouth is visiting these people because it's. Easy to lose touch even though you've got current letters coming to you and zoom and that kind of stuff, but to get down there and hang out with the people go to lunch and see the customers coming in it Truly shows in our conversation that you've done your homework and spent that time.

So really cool. And Michael, I just want to thank you for your time. You have a hell of a lot of different things you could be doing than sitting here with us. And I sincerely appreciate your time.

[01:02:38] Michael Hogue: Oh, it's a pleasure. I really do believe strongly in our profession. I think there is a really bright future ahead of us. I think I'm more hopeful today than I've ever been. There's lots of signs of that give me real hope that the brightest days of our profession are in front [01:03:00] of us. And I know there's a lot of pharmacists out there that believe that the brightest days have already happened and that they're behind us.

But I don't think that way, and I don't believe that at all. I see some Beautiful opportunities on the horizon for our profession, and if we'll push through this really tough time, and we will just continue to work together, I am very confident that pharmacy in the future is going to be so bright, and there's going to be such a positive working place for us in the whole healthcare system.

So, let's just keep the faith, and keep walking forward, and keep moving on. And we'll fight the battles together and I think the outcome is going to be good.

[01:03:42] Mike Koelzer, Host: Well put. Thank you, Michael. We'll talk again soon.

[01:03:45] Michael Hogue: Thank you.

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