Breaking Down PBM Legal Battle | Harini Bupathi & Lucas Morgan Attys at Frier Levitt

Speech to Text:

Mike Koelzer, Host: Harini and Lucas, for those who haven't come across you online, introduce yourself to our listeners.

Harini Bupathi: my name is Harini Bupathy. I am a attorney at Frier Levitt. I primarily focus on defending actions that are initiated by PBMs and similar payers against a variety of different providers, including retail pharmacies, mail order pharmacies, specialty, LTC, dispensing physicians, et cetera.

And any of those issues or adverse actions could include. Audits, network access, terminations, wrongful recoupments, et cetera. So essentially the Z that you can think of when it comes to any sort of adverse actions and that are initiated against providers by PBMs. [00:02:00] Okay.

Lucas Morgan: My name is Lucas Morgan. I'm an attorney at the law firm Frier Levitt. And similar to Harini, I work heavily in the healthcare life sciences realm. But I am going to kind of step in when a dispute has become adversarial in nature, unfortunately, and has moved to either a litigation or an arbitration setting.

So, like Harini, I'm going to be working in the best interest and on behalf of pharmacy providers, usually independent pharmacy providers, in many different types of operations. Could be retail, mail order, specialty, compounding, and there's various others as well. And then on top of that, I would say those tend to be private contractual disputes, but I also do a large percentage of work in the administrative realm the federal, but also Especially at the state level, which would involve Board of Pharmacy work and other relevant health care based administrative agencies. And I would describe that as being kind of a quasi litigation proceeding that involves the government as opposed to dealing under [00:03:00] private contracts with private corporations.

Mike Koelzer, Host: One thing that really grinds me, you guys, is I think that we independents are more sitting ducks and here's why. We're kind of the dog that gets kicked by the board of pharmacy because they know that some of these bigger operations have a full legal staff and 

if they bring something up, it's going to be more of a fight against them because they got the dollars behind them and so on. And I think sometimes we little guys and gals, we get picked on more easily because we're an easier target that we don't have the big legal firm behind us. And when I say big legal firm, we don't often have any legal firm behind us they're also dealing with the uh, old farts like me, who maybe are not as good on some part of the law or have been a little bit more lax and so on, 

is that [00:04:00] true? Are we the sitting duck? Or are there easier ducks than us even? the physicians or some other group, the compounding something or other because for whatever the reason, there are more sitting ducks. 

Harini Bupathi: I definitely say that independent pharmacies. are more of a target compared to other providers when it comes to their relationships with PBMs. And to some extent, you can put compounding pharmacies in there. Most of them are still under their retail terms and conditions and their agreements with PBMs to the extent that they're even able to process claims of the compounding pharmacy with those PBMs. But to your point, Mike, about whether independents are sitting ducks, it's not so much that they're sitting ducks versus there is more of a target on their backs. There are less resources probably available to them or that they're willing to spend on being able to defend any sort of actions against PBMs.

There's many instances of where pharmacies will come to us [00:05:00] and say, hey, we're being terminated because of an audit that happened. Last year, or the year before, or a compound of, multiple audits that's kind of built up over the time and they didn't defend them at the time because they said, okay, it's X amount of dollars. I can't imagine taking X amount of time out of my day. Or staff stay to spend the resources on defending those audits. It's probably just cheaper if we just pay the PBM off, whatever amount that they're looking for versus us taking time out of our busy day to be able to, address the smaller audit.

But again, the problem is that those audits build up, they can become more aggressive in nature, especially if there's ones that have been left unresolved or not appealed. And because of that, PBMs become more likely to take action against those pharmacy providers, mostly independents, who might not have appealed to those findings in the past, or to your point, don't have the legal sources or resources to be able to spend to defend against those audits [00:06:00] or any sort of actions as well.

And that's why. Lucas and I both find it very beneficial for our clients to defend against any audit that they receive, whether it's small or big, it's always really important for independent pharmacies, especially to have what I like to say the last word in any sort of conversation with the PBM.

Mike Koelzer, Host: It's kind of the whole Michael Jackson thing. Who knows if he should have fought off those child, abuse charges against him and things like that, because you're always wondering, well, why did he pay this off and this and that?

But if you've got millions and millions, why not pay off some of it instead of being dragged through stuff, but a point well taken or any of that in, pharmacy. Even if it's not a real expensive fight, at least, don't know, maybe state your case at least something like I'm going to pay this because I don't have the money to fight it, but I'm not guilty.

 You have to have some pushback. It seems.

Harini Bupathi: That's right. I've [00:07:00] actually seen a PBM in the past say pharmacy do not appeal it. So they accepted the findings as true.

They might have paid off the amount and they might not have said a single thing to the PBM. And in response, the PBM says, okay, you didn't say anything to us. So that means you must have accepted the discrepancies as we found them to be true.

 the PBM's position, if anything.

Mike Koelzer, Host: It's kind of my kids when, mom will tell them to take out the trash or something like that. And then she'll say later, you didn't take it out. And they're like. never told me to take the trash out, the meantime, they're like dragging the trash out to the street and it's raining on them and stuff like that.

But the whole time they're barking back. And that's not a bad way to go to take that guilt off of you and have a track record that not the guilty one 

Harini Bupathi: and that's what PBMs are doing too, right? They're creating a paper trail whenever they initiate any. Action, or they raise any issue against the pharmacy. By saying, Hey, we told you that we have this X, Y, and Z concern about the pharmacy in the past, and in the [00:08:00] same way, a pharmacy should be doing the same thing in response to a PBM audit or any other notice from them.

Mike Koelzer, Host: The PBM doesn't really answer to anybody.

Could the PBM though, kick you out just because they don't like you for any reason? Let's say it goes to the attorney Harini.

Does the PBM have to show cause or can they just say, yeah, we don't like the guy. We're just going to get rid of them. We just don't like his attitude. Is that in the contract where they can't do that? They seem to be so powerful. What backup do they need?

Harini Bupathi: So, several different PBM agreements they generally have a provision that say that they can terminate with or without calls. , so 1, when a termination get letter, get sent out, they're usually identifying whether it's with or without calls now as to whether or not a PBM can legally do that.

That's really where the law comes

into For example, any willing provider laws whether a PBM's [00:09:00] termination is wrongfully being made against the pharmacy, and that's really important to understand the reason as to why the termination is taking effect and whether or not the pharmacy has any benefit of the law to be able to utilize and leverage.

Mike Koelzer, Host: So sometimes the law will step in and say, you cannot them out of the agreement. You cannot get them out of the PBM relationship.

Harini Bupathi: Yes, that's correct. Again, when you look at from a contractual perspective, most PBMs do have the ability to terminate with or without cause, but then when you look at it and you understand what the reason is. Whether, again, with or without cause, you should look at the law to see whether or not it's proper for the PBM to terminate you, either with or without cause.

And that comes not just from a federal perspective, but also many states have any willing provider laws as well that offer additional protections to the pharmacy that's being terminated.

Mike Koelzer, Host: it [00:10:00] seems like the PBMs could take all the bad eggs. Let's say they call me a bad egg. I'm not saying they do, but just pretend I'm a bad egg with them. They could pretty much put you in a limited role with maybe not a certain network or something like that.

They might have a network 

for bad eggs who no corporations in town are ever going to sign up for the bad egg network. Network because it's a lot more money or something like that. So I'm sure they have ways to screw you, even though legally you get through the system.

Harini Bupathi: Yeah, I don't know that I've heard of a bad egg network versus all of them might might be bad egg networks Thanks. 

Lucas Morgan: Would just say to add to that point, Mike, is that to Harini's point, the idea of federal and state law coming into play, those any willing provider laws, I think when you really read the totality of them, require two things. One is participation in the networks, [00:11:00] but also the idea that participation be legitimate, actual participation and not kind of like superficial, like,

well, you're in a network

because as you read through these laws, it says, you're And the terms and conditions need to be fair, reasonable, and relevant. And so it wouldn't be fair, reasonable, or relevant to say, don't worry, you're in our bad egg network, for example, and there's no participating payers in that network. And the terms and conditions of reimbursement are horrific. So I think you could challenge that.

Mike Koelzer, Host: Lucas, speaking about challenge, I'm gonna challenge you. Is there truly the word fair in any of the PBM contracts? I don't think I've ever come across it. The word fair.

Lucas Morgan: So, I can't say definitively that the word fair is or is not in the contracts, but I think that's really when it becomes so important to have an understanding how federal and state law interplay with the contracts.

and on top of that, it's not just about, necessarily, we talk often about Medicare's Any Willing [00:12:00] Provider Law protections. We talk often about states that have Any Willing Provider Laws. New Jersey is one of them, Texas Tennessee, the list goes on and on. But keep in mind, and I'm a big fan of keep it simple and go back to basics, good old fashioned state contract law. Because there's a lot there, and that has been established and cultivated over hundreds of years. And there you see a lot about the importance of good faith, fair dealing,

and those types of concepts.

Mike Koelzer, Host: I gotcha and I kind of backtrack on that. I haven't seen FAIR done with pricing. It might say FAIR in terms of who gets to participate. But I think what getting at is perhaps that it doesn't matter what's in their contract. Contracts, in general, have to be fair. Somewhat fair 

Lucas Morgan: I think that's right. Generally speaking, the notion is the idea of fair and reasonable contracting. But keep in mind also that under the terms and conditions of the contract, [00:13:00] the conduct also needs to be reasonable.

Mike Koelzer, Host: the conduct written in the contract Lies on top of the contract relationship that you've got to be fair in dealing with the partner who has signed the contract

Lucas Morgan: The party's conduct in terms of their contractual relationship needs to be reasonable.

Mike Koelzer, Host: In the contract.

in the 

Lucas Morgan: no, I'm saying how they go about interpreting

or applying the contract to their relationship.

I'm just going to make up an extreme

example. Let's say you're in a state where there isn't any willing provider law, and you also have Medicare, any willing provider law, so there's kind of a, you know, perhaps an understanding that you really, to terminate that relationship, would need to have cause.

Just making something up completely preposterous

and then saying, we're terminating you for cause. And they're like, why? Because you sold peanut M& M's and we can't stand peanut M& M's. That's not going to

cut [00:14:00] 

Mike Koelzer, Host: You can't slide in a contract that looks good, but then if there's any decisions in a contract of some of these words that are strong as they can be, but a little bit nebulous, as far as fairness and this and that always come down on the side of your own company versus the provider kind of thing.

Lucas Morgan: I think that's well said. It's kind of always interpreting the contract to your own best interests and kind of self serving ends.

Mike Koelzer, Host: Hey, speaking about contracts and M& M's. you guys ever you know how they've got these riders for bands? Like, the bands, they want the temperature at so much in the dressing room, and you have to have fresh watermelon, and it's gotta be, these kind of bottled water and stuff?

Van Halen they would put in their contracts that they didn't want any green M& in there. And [00:15:00] if they went into the dressing room they had M& Ms there, if there were green ones in there, That means they didn't read this thing closely enough. And so they got a bad rap for saying that they were that picky, but that's the only reason they did it just to see if they got down to the minutia of the green M& Ms.

Lucas Morgan: I appreciate your effort to make my peanut M& M comment sound, sound relevant and reasonable.

Mike Koelzer, Host: not made up. 

Lucas Morgan: I've heard that exact story,

so I'm, I'm familiar with that. And I've also heard that part of what informed that too was starting to see those people that would read it and wouldn't read it and starting to see what else could we put in here to see if they read it.

Mike Koelzer, Host: yes. 

Lucas Morgan: wasn't just to be difficult.

Mike Koelzer, Host: it wasn't to be difficult and I'm the same way here. I write a few things that are helpful for the guests, you know, 90 percent of them don't really read them or maybe they're just not as focused, but maybe I'll put something in there about green M& Ms. [00:16:00] All right, you guys

something that really grind PBM law. And it was basically. Based on the license. Which is even, I guess, stronger than a law, because you don't have to everything under the sun against somebody, you can just say, we're just not going to sign your license.

So you're not going to have it to work in Michigan. Well, first of all, the law was really watered down from what we saw the year previous when it was being drafted, it came through really watered down, of course. And now the PBMs are like, it doesn't even exist in the States.

Got this one person who was supposed to be the point person for this. And I think this person's just overwhelmed. They've never dealt with the likes of the PBMs. And I used to say the loopholes and all those things. Now it's just [00:17:00] blatant I just have to say it's depressing to see what's going on because you feel like, Oh, damn it.

They got another one and hopefully I'm being premature on that, I don't even know where you go on this damn thing when you got this behemoth of the PBM because here's the thing.

 Let's say that the oligopolies of the three PBMs in Michigan control, I don't know, 90 percent of the pharmacy market. I cannot picture the state. giving one of these places a license.

Can you imagine overnight that a third of the Constituents now can't get their pharmacy stuff. So just feel like it's another kick in the head to us that are on the ground, but I'm just kind of a negative So when it comes to that, what are your thoughts on that, Lucas? How long do those things take to come to fruition?

New laws and [00:18:00] that whole thing,

Lucas Morgan: Mike, I think your frustration is fair under the circumstances, and I can tell you you're not alone in feeling that way. But, let me tell you why these laws should still be a cause for optimism. First of all These new laws being enacted reflect a new sense of awareness about PBM issues that was just not there 10 years ago. And people are just becoming more aware. And important people, like Board of Pharmacy Representatives, arbitrators, judges, attorneys that deal in this

space. The second thing is the licensing.

I hear you loud and clear. What is the likelihood that a state is going to deny one of these PBMs a license? The answer is very low, but what it does do is it gives them authority and regulatory oversight directly over the PBMs so that once they have that license, they have to fulfill certain duties and obligations. And I would say in the short term, that's not going to look like much, but a lot of these [00:19:00] state laws come with reporting requirements. on an annual or every other year basis.

That's going to start to give these states more direct insight into exactly what PBMs are doing.

Mike Koelzer, Host: interesting. 

Lucas Morgan: and So

also failure to comply with those reporting obligations could become a basis to suspend the license, revoke the license, or take other sort of disciplinary action or punitive action against the license.

Mike Koelzer, Host: that's interesting to me because two things, one is. Some of the links in the chain are gone. The links get closer where they can say, we want to see this and that. Where before maybe you couldn't get that unless there was some investigation or something. Now they have to put it forth.

Secondly is complaining to this overwhelmed person about something, now I've been hurt. This person's the go between, and I say person, maybe it's a small team. This person's the go between, and then you've got the PBM, but if they [00:20:00] don't turn in these reports and they just ignore this or that, now I'm not the go between now they've been hurt because the PBM is not doing what they want them to do. One more link in the chain is missing. It's closer.

And now that they've been disregarded, they don't have to fight on my behalf. They can fight on their own behalf.

Lucas Morgan: And just keep in mind, the private sector tends to move much faster than the government sector. And so these laws are gonna take some time to really action and start to get some momentum in terms of enforcement. But before that happens. These also can still be used by independent providers to help inform the discussion as between and a PBM in a dispute that Harini might be handling or if it gets to me in a litigation or arbitration setting between me and a judge or me and an arbitrator the existence of the laws in and of itself show that there's clearly a problem. We can usually show for, from like the committee [00:21:00] notes from the various state legislatures that enact these, the different concerns that existed in that state that led to these passing. Just a quick example off the top of my head I think if we go back to 2021, Texas had a new set of PBM laws, rules and regulations that passed unanimously in the state of Texas. I mean, just being able to say that. and of itself shows like, well, there must be a concern there

if, if you have unanimous passage. but a point that Hrinian made earlier about the importance of having the last word. I just can't emphasize enough how important that is, even in instances where you may know in advance that the PBM is not going to agree with you.

Because want to really emphasize the distinction between the very strict terms and conditions of a PBM contract that is drafted by the PBM versus compliance with state laws, rules, and regulations. And this becomes especially [00:22:00] important in instances where a PBM might make a referral over to a board of pharmacy. to be able to have that written record that says, first of all, we fought this every step of the way. Second of all, we vehemently disagreed and let us explain to you why, and by the way, here's exactly what we submitted. As you will see, we never agreed that this did not meet the terms and conditions of the contract, but it absolutely met and complied with all of the laws, rules, and regulations governing us as a pharmacy in our state.

So this complaint that's been lodged with the Board of Pharmacy should be closed without any fanfare because we can show you our written record of everything we did to combat this with the PBM. And that same written record becomes very critical in a litigation or arbitration setting.

Mike Koelzer, Host: As I sit here and bitch about all the stuff going on to this kind of nebulous, state person, I think it is, who is getting all this. Influx [00:23:00] of complaints from a pharmacy like ours. Where is this stuff really going to? Who's in charge of this kind of law when it comes down? I'm thinking just board a pharmacy, but once you get licensing in and laws and all that, I don't know how much power a subgroup like that has.

Where is all this in a state?

Harini Bupathi: So there is a distinction between. The entities that generally regulate PBMs versus those that oversee and regulate pharmacies.

We talk about that, Michigan law, we're probably, we are referring to the Department of insurance in Michigan as well as most departments of insurances. pharmacists in many states That then regulate PBMs versus boards of pharmacies. And Lucas can speak better to the missions, the mission statements, and those board of pharmacies, but board and pharmacies are the ones that are overseeing and regulating and licensing pharmacy providers.

Lucas Morgan: I think you see a lot of different players at the table in terms of who regulates the various entities, [00:24:00] but I also think there's an evolution happening right

now I have long been an advocate that boards of pharmacy should take on more of the direct oversight responsibilities of PBMs. And it's because I think their personnel are more equipped understand the minutiae of the PBM pharmacy relationship and also the plan sponsor PBM relationship. One of the questions I've most commonly been asked is how is it that PBMs gone unregulated for so long. And I think the answer to that is some version of the fact that PBM is neither an insurance company, and it's also not a pharmacy. so, laws that were written to apply to insurance companies, oftentimes, if you read

them, Really indicate that they would apply to a PBM. And then laws, rules, and regulations that govern the operation of a pharmacy certainly don't govern a PBM unless those laws [00:25:00] explicitly say so. Now, you're starting to see a lot of these laws be amended and modified to have language that would make them apply to PBMs, but that's taken a lot of time. I think that departments of insurance and insurance commissioners have historically been better at regulating more kind of traditional insurance issues.

For example, bad faith denial of claims for homeowners or auto insurance. And even in the health insurance

realm. But the pharmacy benefit space comes with a whole host of additional complexities where I really think that pharmacy and pharmacist background is crucial to understanding it. this is starting to have some legs.

 There are examples of states where boards of pharmacy have direct Oversight over PBMs. Mississippi is one example where the Mississippi Board of Pharmacy, you can file a complaint with them about PBMs, and they have some other remedies available. There's currently a bill, I know this was recent and accurate as of the end of February of [00:26:00] this year.

I do need to check in on it, but there was a bill put forth where the California Board of Pharmacy would take over oversight of then this is a little bit of a different structure, but I think has the same intent. In New York, we saw, under the Department of Financial Services, creation of a Benefits Bureau.

And the idea there was to have a specialized bureau or agency that was going to be experts in overseeing PVMs. So it's that idea of making sure you have the right people in charge of it, but is 100 percent correct that it's various entities and agencies throughout the various states and at the federal level.

Mike Koelzer, Host: It's kind of weird in a way when you mention that the same board that maybe is making. judgments on whether someone made a good medical decision or a pharmacist wasn't outside their area of expertise and things like that is the same one that's trying to fight some of this, insurance [00:27:00] contract stuff that does seem like it's a lot more in the realm, but the problem is you get some slick tongued, person to say, well, you don't understand because that's insurance, but you don't understand the pharmacy part of it, you know, and each side can kind of say, you don't quite get it.

And that's where I think a benefit of these laws are in a way too, because Lucas, like I believe you said, it's like when it's a unanimous decision by somebody then you can at least say, look, we might not understand all this, but it was a unanimous decision. And so somebody is understanding this.

 my good friend Alrighty, he's my best friend if he listens to this, but what the hell is he gonna listen to this for? He's not that good of a friend. best friend he's in the tool and die business. And like he's making in his little shop, 

 he makes the gas pedals for Tesla trucks, these new [00:28:00] semis coming out. And it amazes me that a big company like Tesla. Part of the truck is made from this two man operation in Grand Rapids 

when you guys are dealing with the PBMs are you dealing with corporate lawyers that are part of the PBM, they're like in their buildings from wherever, or you dealing with the local attorney that hired? There's some relationship and you all have to be licensed in the same for it to be legal and stuff like that. 

Harini Bupathi: It depends on the PBM. Most PBMs that we deal with have their own in house legal counsel, which we'll deal with directly. Some PBMs will have a 3rd They'll hire an outside firm to handle, for example, pharmacy specific PBM related issues, and we'll deal with their counsel. For all [00:29:00] intents and purposes, they're almost acting as their in house counsel there as well.

So we're generally dealing with in house counsels when it comes to dispute related issues or anything before it escalates to that of a litigation or arbitration. When that gets to that level, Lucas is usually dealing with outside counsel. Isn't that right, Lucas?

Lucas Morgan: Yeah, that's right. If it gets to the point of like a litigation or arbitration, we would then be dealing with that firm's outside legal counsel of choice.

Mike Koelzer, Host: now wait a minute on that, because it would seem to me that.

firm would handle the little stuff and when it gets to be the big fight that it would go to the in-house firm. But it sounds like you're kind of saying the opposite.

Harini Bupathi: Different PBMs have different operations or legal operations, but generally, yes we're dealing with the issues with their in house counsel initially. And if it escalates and becomes [00:30:00] something bigger, such as litigation or arbitration, that's when it's usually referred to their outside legal counsel.

Mike Koelzer, Host: talking there because of geographical locations. I take it because it gets bigger, you have to have a in-person. and those people are more local in the or something like that in the pre stuff even though you're with the Attorneys that are right with the firm That's probably a lot of phone calls and zoom and stuff like that.

Is that right? A lot of it has to do with just geographical locations because it seems when you're in a big fight You'd want the attorney that's in house. That's really gonna fight things out.

, I often think of the in house legal counsel at these companies serving as kind of a filter.

Lucas Morgan: Looking at what are the disputes and issues that we are best positioned to resolve and what are those that require some sort of heightened focus and perhaps expertise that we're going to be better positioned if we would [00:31:00] hand this off to an outside attorney who might be more well positioned from a resources standpoint, but also to your point in some instances, geographic locale. Now I will say that one of the realities of 2024 is that A lot of these proceedings, whether you're in court, arbitration, or anything of the sort, are going to be handled virtually, utilizing Zoom or Teams. And that's really just, in many cases, to everyone's benefit because of cost efficiency. But I will say, the big stuff is still in person, usually.

Mike Koelzer, Host: Okay. So it sounds to me like when it's a big case, the outside firms might even be more specialized than the average attorney that's in the PBMs and so on. Is that the case?

Harini Bupathi: It's not necessarily that they're more specialized versus their roles are different.

Mike Koelzer, Host: Oh, 

I see. I gotcha. 

Harini Bupathi: in house legal counsel is more in an advisory

[00:32:00] position or more of a, in a, let's seek a resolution type of a position versus when it goes to outside counsel, that's usually when there's no, a point of no return in the sense of it's been escalated to the litigation or arbitration.

In house legal counsel, serve as counsel to their client, the PBM, , and they make recommendations as to whether or not they think issues should be resolved

with the pharmacy, or if they think it should be escalated. And if so, it's going to get bumped out to the outside legal counsel, to Lucas's point, who probably has more resources in the sense that they have probably less matters or cases that they're dealing with in a different forum than, say, in house legal counsel. I don't see a lot of in house, I mean, at the same time, I'm sure there's a lot of collaboration

between outside and in house

legal counsel when it comes to these issues, because again, the level of involvement that they, they both have respectively.

Mike Koelzer, Host: It's a better way to manage because you're using them for something that's going over and over again the constant trickle of legal matters that come in, but bigger ones are gonna take more resources and you might have, [00:33:00] X going on at once or 0. 2 X and no sense having those people around. 

Harini Bupathi: Another way to look at it, in a way, is you could see myself being an in house legal counsel

Harini Bupathi: for a lot of our pharmacies, in the sense that we're trying to resolve the issues without having it to escalate to that of litigation and arbitration, and Lucas would be our outside legal counsel in the form of, if it does escalate, Lucas and his team are looped in to be able to handle the litigation and arbitration aspect of those types of matters.

Mike Koelzer, Host: All right, Lucas. You've got the Hollywood looks, but I'm not sure if the story's going to be strong enough for Hollywood. So give me the best you got. If there's going to be like a trailer of one of these stories and what would that be, what would you be, fighting against and who would be the players and don't make it fantasy, but.

In real life, what would be the biggest suspense that we're [00:34:00] dealing with in your cases?

Lucas Morgan: Well, to me, the most compelling stories or narrative surrounding the type of case I might get involved in is, typically, the movie Aaron Brockovich

Mike Koelzer, Host: Yeah.

Lucas Morgan: town

comes in to fight a huge corporation, to challenge, horrible things that have happened in this small

town. 

Mike Koelzer, Host: Lucas, hold on just a second. I did say you have the Hollywood looks, but I'm going to take Julia Roberts on this one.

Lucas Morgan: I can't fight with you on

that one. 

Mike Koelzer, Host: continue.

Lucas Morgan: And Aaron Eckhart, I think, is also in there. He'd beat me too. 

Mike Koelzer, Host: That's a guy?

Lucas Morgan: Yeah, 

I think that is her love interest in that movie.

Mike Koelzer, Host: Well, I'm not gonna judge that. Harini, you can tell us if that's 

true or not. 

Harini Bupathi: Isn't that the guy in Dark Knight? 

Lucas Morgan: Yeah?

Mike Koelzer, Host: isn't Dark Knight the one with the guy that died? The Joker guy?

Lucas Morgan: Where have

you 

Harini Bupathi: out, Mike.

Mike Koelzer, Host: like number two on the IMDB, movies of all time. I just haven't seen it for some reason. I've [00:35:00] seen clips and stuff, 

Harini Bupathi: You're missing out. Dark Knight is, I'd say, almost a classic at this

point 

of our generation. 

Mike Koelzer, Host: I think it is. I don't know why I haven't watched it yet, but there's a decent looking guy in there too, apparently, 

Lucas Morgan: But Mike, to answer your question, I think one of the most compelling narratives that we see comes from, we've seen in the headlines, this notion of pharmacy deserts, areas where there's very few independent pharmacies. that notion is easy to overlook. And that story is easy to overlook when you're located in. outside of New York

City or near Philadelphia or any other big city, and the city doesn't have to be that big, but there are absolutely places in this country where there's very few pharmacies. The ones that are there are truly independent. many times family owned operations. And on top of that, they often serve as the first line of healthcare defense.

Meaning, there may not be another real healthcare [00:36:00] provider in the area. They may rely on their pharmacy for a wide variety of services. Now, I'm not suggesting that pharmacists are engaging in the practice of medicine, but they may be the first place they go when there's a health

issue. And seeing those types of pharmacies try to combat a PBM termination. And you add more to it that with a highly consolidated marketplace where you see three PBMs taking up 80 percent of the marketplace, and you round out another 15 percent of that with three more, so you've got six comprising 95 percent of the marketplace, and all of a sudden they find out that a PBM that makes up 40, 50, 60, 70 percent of their business to move to terminate them and they're one of the only if not the only pharmacy provider for a radius of 10, miles. That starts to take on a very compelling narrative.

And then I think it becomes that much more compelling when the basis of the termination [00:37:00] is not a valid

basis. 

Mike Koelzer, Host: Lucas. Gimme some setup who's there? Like one attorney from each side and then maybe the pharmacist?

Are there like three people in court for this 

Lucas Morgan: well, it really depends on what stage of a litigation or arbitration you're at. say at the inception, and I will say that a lot of times these proceedings are conducted, at least at the initiation, on a highly expedited basis, because you usually will have terminations that are set to take effect in very short order, relatively speaking. a pharmacy might have 2 weeks, 30 days, 60 days, 90 days notice, and guess what? All of the above. are short in terms of court

proceedings. so given that, usually what you're going to see at the inception of a is usually a judge or an arbitrator and typically one to two attorneys on behalf of each side. There might be one or two more depending on the [00:38:00] circumstances and then, if you were to move to a trial or hearing where there were witnesses, that's where you would usually see the actual direct representatives of the pharmacy come in. And that could be for purposes of observation, but also potentially to give testimony.

But that's definitely getting way ahead of the game,

Mike Koelzer, Host: one attorney on their side?

Lucas Morgan: No I would say it varies in It might be one, two or three attorneys, but I think it also, it just depends. I would say it's typically two and two.

Mike Koelzer, Host: Two and two.

is the judge taking pharmacy deserts into account because let's say that a pharmacy has, I'm just going to say done something wrong in quotes, whatever that is if you're in my area, I've got thirty pharmacies within, 10 miles, Are they taking into account the results of their decision?

Or is it just based on the law? Because are they going to be more lenient on somebody that has one pharmacy in 30 miles versus me [00:39:00] who is not, Needed as much in the area the judge even legally take that into consideration, or is it all just about the wrongdoing itself? 

Lucas Morgan: There is so much to that, Mike, and that's such an excellent question. answer is that a judge or an arbitrator absolutely can take that

into account. And what I'm hearing you describe is a situation where there may have been some wrongdoing on paper that may, on paper, justify a termination. But what you're describing is something that might be a mitigating factor or an equitable consideration that

might say, Well, okay, we understand that technically there was an issue, but does it really make sense to terminate the entire contractual relationship? 

Mike Koelzer, Host: Because you're in an area that if we shut you down, they can talk about that they can say, what are the neighbors going to do that kind of thing.

Lucas Morgan: policy considerations impact on the public health and well being. If you terminate. the one local independent pharmacy provider for [00:40:00] the local population of X county or X town and they were, 65 percent of that business was comprised of one PBM. That would mean that a lot of those residents and citizens are relying on one pharmacy and one pharmacy benefit manager for their pharmacy needs. So that is absolutely something that can be taken into account, but the key is that has to be presented to the judge or arbitrator so that they're aware of it.

Mike Koelzer, Host: What's interesting to me is we started this off saying that the reason Michigan or maybe any state doesn't come down so hard on a PBM is because a third of the people won't be able to, buy their prescriptions because they don't have their insurance anymore. So it's interesting that guess when it comes down to it, it's like we all know, it's the patient, the consumer, that is real receiver of these legal decisions. And I suppose that's how it should be.

lucas and Harini, great having you guys on [00:41:00] again. Always interesting. Thanks for what you're doing on behalf of pharmacists nationwide and looking forward to see you guys again next time.

Lucas Morgan: Thanks, Mike.

Harini Bupathi: Thanks

Mike. 

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