March 22, 2021

Rare Pharmacy | Gordon Vanscoy, PharmD, MBA, RareMed Solutions, CEO

Rare Pharmacy | Gordon Vanscoy, PharmD, MBA, RareMed Solutions, CEO
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Gordon Vanscoy discusses rare pharmacy and the two companies he founded in that field.  

https://www.raremed.com/

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Transcript

Transcript Disclaimer: This transcript is generated using speech-to-text technology and may contain errors or inaccuracies.

Mike Koelzer, Host: [00:00:00] Hello, Gordon, how are you doing today, 

Gordon Vanscoy, PharmD, MBA: Mike? I'm doing well. How are you doing? I am fantastic. 

Mike Koelzer, Host: So Gordon, for those who haven't come across you online, introduce yourself and give the listeners a glimpse of what we might be talking about 

Gordon Vanscoy, PharmD, MBA: today. My name is Dr. Gordon Vanscoy. I am an entrepreneur, uh, who came from a blue collar family.

Uh, one of those individuals that was the first to go to college, went to the university of Pittsburgh, always been associated with the university of Pittsburgh as a faculty, actually for the last 34 years. But throughout that career of being a faculty member, I also started, I believe eight businesses.

The most recent one is probably the reason why you had invited me to be part of this was actually Panther, rare, Panther, rare. We built it. It grew at an incredible trajectory. Um, actually started a. Uh, a new segment of the industry. And, um, we actually passed it on to a company called Centine in December of this year.

But as part of that process, we did not divest another company that I started. And I'm also CEO of, uh, which is called rare med. And that's really where I'm focusing most of my attention, my entire career for the last, uh, since 2011 has been, uh, dedicated to helping. Patients with rare diseases, um, find these extraordinary medications, 

Mike Koelzer, Host: Gordon.

So I'm listening to you. And I say, boy, that guy's smart. He sold a business. He still has a business doing the same thing. Where am I off there? 

Gordon Vanscoy, PharmD, MBA: Well, actually there are different parts of the business. Um, Panther rare is a, I mean, it was started as a specialty pharmacy, but it became so specialized. Um, we actually created a new sub segment of the industry called rare pharmacy.

Um, and its primary responsibility was, um, we entered into these unique relationships with these small emerging biopharma companies that have, you know, what these aren't the, Pfizers the Amgen's um, the Genentech of the world. What we're seeing in the FDA pipeline is innovations coming from these small to midsize companies that have really delved into, um, understanding.

Uh, gene mapping and understanding these very small entities that are intended for patients with rare diseases. And, um, that's really Panther does two things. It really, um, links these manufacturers with the patients. So we are the ones responsible for providing drugs for patients all over the country. Um, and two, uh, not only do we provide the drug, um, but we also provide some services around that drug and making sure that the patients are healthy because, um, these individuals go many miles to get diagnosed, but then they go home.

So we're kind of a bridge to their, uh, treatment. Um, not only in terms of their drug, but a link to their specialist. So that's Panther and that, that entity, because. Uh, you know, managing the drug, um, was a pharmacy, but while we were building and growing Panther, we found out that Panther's primary business model was developing exclusive relationships with these biopharma manufacturers.

Some of the manufacturers wanted not just one choice, but may have two or three, two or three choices of what specialty pharmacies. Gotcha. So not just one. So. 

Mike Koelzer, Host: They wanted more than just going with 

Gordon Vanscoy, PharmD, MBA: Panther in the rare sector, there was a, uh, industry created, which was called a pharmacy hub. And the hub basically is an entity that receives the prescriptions, um, and basically makes sure that the patients, um, have insurance, make sure that they can afford the drug, and find resources for them.

Then we, um, basically separate the prescriptions and send them to the various specialty pharmacies, um, which we call a clean script. Um, and that specialty pharmacy or rare pharmacy then fills the prescription and sends it to the patient. So rare med, um, provides those pharmacy hubs and extended service.

So think of a spoken wheel Panther, 

Mike Koelzer, Host: Rare being the one pharmacy and the best pharmacy, of course, but also you're a hub for other rare pharmacies. Now let me ask you this then. Gordon, why would somebody want to go to a different pharmacy and not just Panther rare? Is it because it's more in their area? Or why did these manufacturers want to go with other ones than just say the one and only Panther rear 

Gordon Vanscoy, PharmD, MBA: Y you [00:05:00] know it, it's a function of time and.

You know, as first of all, Panther just started in 2011. And, um, you know, we got our big break in 2014 in the rare market. So we're, I mean, it was a relatively new entity. So as manufacturers, many of them wanted that new innovative approach, but some of them, you know, there's a lot of other pharmacy, other national pharmacies that, that are out there and they took a little more conservative approach and said, you know, Hey, let's, let's try Panther, but let's try these others.

Um, so they just wanted to give, uh, you know, their patients and prescribers options and our goal wasn't to look at, you know, creating a monopoly. It was to, to, to try to create something where, you know, we fit every business model out there and that's why the two were done, but it's interesting. The more we go along, um, the more people become very comfortable with, you know, the exclusive model and, and that's all good.

Mike Koelzer, Host: When you talk about these new manufacturers popping up these biomeds and stuff, does any of that have to do with the new ways that computers are used for tests you hear, but almost like these garage, I know they are actually made in a garage, but these smaller companies have computers helped that. Or if not, why are there so many small ones, small compared to the big boys?

Gordon Vanscoy, PharmD, MBA: Yeah. And, and I think that goes back to quite frankly, the FDA, um, you know, the federal government, as part of the orphan drug act, created financial incentives for entities to actually do research in the rare segment. Think about this rare segment, Mike, as you know, there are over 7,000 rare diseases, right.

Um, but only 5% of 'em have a treatment. So if a disease, if you put them all in the same bucket, okay. These 7,000 rare diseases would be as common as diabetes. Okay, but there are these small pockets. I mean, and sometimes it's only hundreds of patients in this country, sometimes it's thousands, but it's these small pockets.

And this incentive that the FDA, um, created, um, actually stimulated research and the research, um, gave advantages to the manufacturer, both in terms of patent. For protection, as well as giving them, you know, if they're in the pediatric sector, these vouchers, which actually accelerates their approval, or they can actually tell this, take this voucher, um, and actually sell it to another manufacturer and, and get a lot of money for that.

So it actually can financially capitalize the organization, but it was really the government's intent to try to help patients with rare diseases. So what we saw happen is that this, you know, this act and, and some of these subsequent legislation. Caused the FDA pipeline of new drugs to be filled with these new, rare that we call them orphan drugs.

Um, and these orphan drugs, um, because it was, you know, financially more advantageous and, you know, we, we could actually do the research with them. Um, we saw a plethora and actually, you know, a significant percentage of the FDA pipeline are orphan drugs now. And yes, it is because of computers to an extent it's also due to gene mapping, it's due to, um, understanding genetics.

We started a long time ago with these big molecules that we would find from natural sources like aspirin. Yes. You know, from a Willow tree, the bark of a Willow tree. Exactly. Now we have the science and sophistication to know that these targeted molecules, um, actually can be safer and more effective because we know exactly what patient is opportune for this and what disease works.

So it ends up being a safer, more effective approach to treating these patients than just trying a cholesterol drug in millions and millions of patients and seeing which ones determining which ones work, why the 

Mike Koelzer, Host: extra speed for children's medicine. Is it the heartstrings or is there a reason that children get quicker access?

Gordon Vanscoy, PharmD, MBA: Well, it's not just, they get quicker access than it, I think that it was an underserved population for a long period of time. And, and so they said, you know, let, let's try to fix it. um, so 50% of warfarin drugs now are in the pediatric realm and 50% are now in the, uh, adult realm. So it was just trying to correct a problem.

And that's why, you know, you put money associated with it. Yeah. Suddenly the research dollars 

Mike Koelzer, Host: follow. [00:10:00] How do you ask this in a way that doesn't tear your heart out, but basically are some of these diseases for the young children that they die before the disease can even be so old. I mean, like everybody dies before two years old and thus there are no older people with this.

Gordon Vanscoy, PharmD, MBA: Exactly. And in fact, our, you know, our, the first orphan drug that actually helped launch Panther was designated for a, a disease where these babies, if they made it through childbirth, um, 80% of them would die before year one. Wow. And in fact, they're born without an x-ray. You can't even see a skeleton. Wow.

Because they're lacking an enzyme that calcifies the bone and makes the bone heart. Hmm. So the majority of 'em would just die and, and it, it was just you're. Right. They, you know, a lot of these patients that, you know, were born with this in the pediatrician that had the dominant gene. Yeah. Um, never made it now we know based upon.

Understanding the disease and proper diagnosis. Um, we can actually allow them to have a normal 

Mike Koelzer, Host: life. Wow. So the government started pressing this a little bit further in about what year? 

Gordon Vanscoy, PharmD, MBA: Well, the, uh, pediatric vulture act, uh, which again, on the, on the children's side, you know, was right around 2012. 

Mike Koelzer, Host: Okay.

And then you saw that coming by starting this in 2011 Panther rare, 

Gordon Vanscoy, PharmD, MBA: actually. Yeah. And, and the, the reason why I saw it coming is, there was a professor at duke. Um, who actually was one of the biggest advocates of trying to get children, um, access to drugs where they, they were just, um, did not have access before.

Wow. And this professor, um, actually petitioned con Congress, and he was the reason for the pediatric voucher act. The orphan drug act had been there for years. Um, so there were some incentives, but the voucher act actually provided more incentives. And so, you know, the rest is history and now we have, um, again still only about 5% of these, uh, These incredibly terrible diseases.

Um, only 5% have a treatment, but we're doing, but we're making progress. 

Mike Koelzer, Host: And Gordon, you had your ear to that though with the professor. Did you know him personally? 

Gordon Vanscoy, PharmD, MBA: I didn't believe it or not. My son was getting his MBA at Duke and, uh, you know, he was telling me about this incredible professor he had. And, um, back then when we started Panther, um, I realized it would be very, very difficult to try to compete with the big guys, um, in traditional specialty pharmacy.

What were you 

Mike Koelzer, Host: doing? Like in 2009, like two years before you even opened up pan, I knew you were a pharmacist, but did you have a pharmacy 

Gordon Vanscoy, PharmD, MBA: ever or yeah. Oh, well, we, no, I never owned a quote unquote my own pharmacy. Um, I was a faculty member in the school pharmacy. Gotcha. Uh, for 30 some years and was actually involved with the very first specialty pharmacy in the country back in the late eighties.

Wow. This company is called Stat Landers out of Pittsburgh. Um, but to answer your question directly, let's say in 2009, um, I actually owned a company that did, um, medical education. Gotcha. Um, and we were teaching doctors, um, the appropriate way to use medications. So I was in different areas. 

Mike Koelzer, Host: So walk me through that, where your son says, Hey dad, here's this idea.

Should we do this? Do that, was it kind of like it came together with that information or was that freak that it happened right before 

Gordon Vanscoy, PharmD, MBA: that. Both of my sons were strictly business in nature. Okay. That was their focus. And you know, many times me being in medicine, we would talk about the business of medicines quite often, you know, what was unique about that?

And it just happened over dinner that, you know, he mentioned this and I was trying to find a niche for Panther where we could create something new. So that's when, uh, you know, the idea came and, you know, we had to create a traditional specialty pharmacy that wasn't doing orphan drugs for three or four years prior to our first break.

Why 

Mike Koelzer, Host: did you get into that though? Why did you get into specialty before this big break came? 

Gordon Vanscoy, PharmD, MBA: Specialty's always been, you know, in my blood, we were involved in that first specialty pharmacy back in, um, in the eighties, in the late eighties. Yeah. And actually I published the first paper that was published on specialty pharmacy.

Really. And that was, that was published in 2000. 

Mike Koelzer, Host: You're in a conversation with the average Joe, and they say, Gordon, what do you mean specialty? I think the pharmacy listeners have an idea, but how would you capture that for the average person? What specialty 

Gordon Vanscoy, PharmD, MBA: is, you know, specialty are expensive medications that have unique [00:15:00] requirements either.

Um, you know, the dosing of them, you know, the adverse effect profile of them. Um, but it's a building that they all have in common. So think of drugs, like drugs on television, uh, you know, the drugs that we see all the time for rheumatoid arthritis. Yeah. Or for Crohn's disease. Yeah. Or for, um, you know, that's think of those drugs, um, as specialty drugs, not your drugs for high cholesterol.

Sure. Hypertension or headache or things like that. A 

Mike Koelzer, Host: A lot of the pharmacists think that the PBMs kind of call the shots and run the world. In my mind, I'm thinking about a specialty, I'm thinking PBMs probably have a part in this. And I'm guessing that one is that there's maybe less waste because you guys handle these all the time.

And secondly, there's maybe financial things. How did the specialty market come up knowing that probably the insurances I'm guessing had a lot to do with this and maybe I'm 

Gordon Vanscoy, PharmD, MBA: wrong. No, you're right. Um, you know, the PBMs do have a big part of it, and that's what, you know, the David and Goliath, when we started stat lands, the country's first specialty, um, it ultimately sold to CVS.

Um, so that, you know, that became a significant part of the approach. And while that, when we made that sale also, um, a credo and, um, Walgreens and others were realizing that in the FDA pipeline, weren't just your traditional drugs that you find at your local pharmacy. These drugs are expensive to inventory.

They were difficult to find. So a different distribution model was needed. And that's what the specialty distribution model was created for. But you're right. The PBMs, it became such commonplace though, that when we sold stat lenders, uh, back years ago, um, specialty wasn't special anymore, it became almost like a mail order pharmacy.

It was all about efficiency. It was all about making money. If, if you would. And that's when I left the industry, I left specialty pharmacy God, um, decades ago, uh, because quite frankly, that wasn't what, uh, I was interested in. But when we got back into rare, um, we brought specialty back because it was not just about, you know, the efficiency was about getting people appropriate insurance coverage.

It was about, um, teaching them how to use their Medicaid. It was about linking with their physicians. It was much more complicated than just mailing a product out. 

Mike Koelzer, Host: It's almost like. There was specialty, but then the big guys got their hands on things and then specialty, you started cutting corners and things, and then you almost had to say, okay, they're specialty, but now we're specialty specialty and then, right.

And, and then you say, well, if you were specialty specialty, what would need specialty specialty? And that would maybe be the rare drugs, because those are the ones that are really special. 

Gordon Vanscoy, PharmD, MBA: Exactly. And I think about 40% of the rare drugs are cancer drugs. Okay. So that's a whole sector of these, you know, these life saving drugs that you don't get from your local pharmacy.

Right. Right. Um, and that's where, you know, where we came in, not only on the oncology side, but also on, you know, the 60% of non cancer, um, rare diseases, 

Mike Koelzer, Host: what would you call those like genetic things or are some flukes. 

Gordon Vanscoy, PharmD, MBA: Well, most of them have some genetic, um, component to them. There's no question about that.

And, and that, I would say the majority of them do. And, and it's interesting when you identify, if somebody gets diagnosed in a family with one of these rare diseases, you actually, they they'll actually do, um, you know, they'll go and genetically test every member of the family because many, many times they'll find that generations ago somebody died or had a disease that they couldn't diagnose.

Yes. And now the person knows so that their offspring, they, they now know that carry this risk. And now we have an option to manage them. Are any of those drugs 

Mike Koelzer, Host: given in utero? 

Gordon Vanscoy, PharmD, MBA: No. No, not none yet. No. They're all after. They're all they're all after. Yeah, because you don't, we, we, haven't got to the point in terms of sophistication to know if in utero, um, that that child is, um, is carrying the dominant or recessive or carrying it at all, when 

Mike Koelzer, Host: the baby's finally born, then most of these are going to be not just like, here's a shot and you're done, or a lot of it, like repeat drip 

Gordon Vanscoy, PharmD, MBA: stuff.

Well, you know, the one disease state that I've talked to you [00:20:00] about, um, where the babies are basically born with a soft skeleton, right. Um, they've gotta take this enzyme, the rest of their life. Oh. And, um, and, and here's the, here's the complexity when we would, the drug itself, um, uh, if you have to ship it cold chain.

So you get it, you know, between at, you know, four and eight degrees. Okay. And it has to actually go to the patient. You know, at that same temperature. Gotcha. Um, so it's not like you can just ship it with ups or FedEx in a regular box and everything's fine. So it's a very, you know, injectable drug.

Um, it's injected three to four times a week. Um, we have to teach the parents how to, how to do the injections. And then as the baby grows, they require more of the drug because it's weight based. So we have to do all, you know, constantly changing doses. And then once the baby thinks about it, when, you know, if we started in 2015 with this drug, you know, those, maybe a baby that was one year old is now six years old.

Um, and they will need it. The rest of them. In our 

Mike Koelzer, Host: city there's IV center or something like that. It's not quite a hospital, but it's like an, what would you call that injection something or I forget the word infusion site or so on. Yeah. Do they ever have the drugs go there or is yours mainly house 

Gordon Vanscoy, PharmD, MBA: based?

Ours are mainly house based. Um, and, and they're not all injectable. Um, ours are mainly house based where, you know, sometimes we'll send a nurse into the home and actually do the injections. Sometimes we would, um, ship it to the house, teach the family if it's a, you know, subq injection and, and the family, you know, does it then, but to get back to your former point about, well, do the, is it a one time shot?

The really, really exciting thing that's on a horizon is called gene therapy and gene therapy. The hope is that you can inject what's called a CRISPR into a patient and, and you can actually modify their genetic structure. And, you know, the hope is for cures, you know, we probably have three or four gene therapies that are out in the market.

They haven't come out as fast as we hoped. Uh, one is for a certain type of blindness and, and there, there are several others, but you know, the problem with these that we're. We're dealing with, if it costs so much to develop these drugs and for a one time or a short course of therapy, the folks who created it have to recover their cost with it.

So there are millions of dollars. Some of them for a, for a, you know, maybe a one shot deal, is that where 

Mike Koelzer, Host: You'd say a good society takes care of the most needy. If you did like an insurance thing, like car insurance, they would say, no, we're not gonna pay for this. Let so many people die because it would cause this much more to do this to the cars or something like that.

You know, the car manufacturers and all this is this something though where the government says. Yeah, it saves a life or two, but we're gonna spend extraordinarily amounts of money to do this, or who pays for 

Gordon Vanscoy, PharmD, MBA: this is still the insurance companies now. Okay. Um, and one of the insurance companies is the government.

Okay. Think about Medicare and Medicaid, Medicaid, primarily for the babies. But here's the unique thing about this. If you can cure somebody of a devastating disease, maybe you're saving a lifetime of hospitalizations, the direct cost associated with some of these devastating diseases can eclipse what the cost of the drug is.

And these are small populations. When you think about when you get insurance, right. Think of the bell curve. Okay. When they're, you know, if you're an average person, it costs them, you know, the same amount, you know, as the next person. Well, there's some people that don't use any insurance, right? That doesn't cost them anything.

Then on the other end of that, you know, they actually have actuaries. It's already embedded in your premiums. They already know that there's these gene therapies out there. They know that there's orphan drugs out there. They know. So it's part of it and we've never, and this is the honest, the goodness truth have had a situation where we've had an insurance provider turn us down for 

Mike Koelzer, Host: coverage.

I'm an insurance company. Mm-hmm and I only care about money. Let's just say, let's just say I'm, I'm this insurance company that it's only about money. I'm not even allowing anybody in my company to tell me any sad stories. You know, it's all money. Can an insurance company say, we'd rather have this person die because that's cheaper because Gordon says that we can.

Pay this million upfront, or it's gonna cost 2 million to have this person live out, but we're hoping they die. Is that what they're 

Gordon Vanscoy, PharmD, MBA: thinking? I'm not sure what they're thinking, but I will tell you this, that scenario isn't far from, you know, some realities and I, and I know that [00:25:00] there have been patients denied certain cancer chemotherapies and you've, you've probably seen it in the paper where they've had a petition and you know, those are, those are warfarin drugs.

So, I mean, there are situations where that's occurred, but I, I tell you there's a failure here that the manufacturers, if people can't afford it and they don't have insurance, the manufacturers actually will provide free drugs for these people. And, and we've, and that's one of the things that rare med does.

We handle their free drug program for people that just don't have the ability to, to, to handle it. There's certain criteria you have to meet. But again, where we've had situations where the patient hasn't been able to afford it, or doesn't have healthcare, I've never had a situation where the manufacturer didn't have the compassion to provide the drug for the patient.

And it 

Mike Koelzer, Host: might even be something that the manufacturer and the insurance almost like, Hey, we're gonna buy this, but we're in this together almost, you know, to help this out. And so let's come up with something here besides throwing in there, let the person die as the best scenario, 

Gordon Vanscoy, PharmD, MBA: the PBMs and, and the insurance companies love rebates.

Right? You've heard of this whole rebate fiasco, you know, rebates haven't hit so much in the orphan drug. It's much more transparent. Oh, it is okay. Yeah. Oh, it's much, much more transparent. However, you know, when. PBM agrees or an insurance company agrees to pay for something. And let's say they're acting on behalf of, um, an employer.

So sometimes, you know, insurers for self-insured employers, you know, sometimes we don't know what number goes back to the employer. We just know what we get paid. Yeah. So there's still that intermediary. Gotcha. 

Mike Koelzer, Host: So the manufacturer. and rightfully so you said that they have maybe a heart, but it also might be a heart because there's some workings in the background that you don't know all the things that are going on, even between them exactly.

We know they're gonna come out ahead somehow on this or else they wouldn't be in business. They wouldn't have any stockholders. Exactly. So Gordon, I'm always a big fan of something. That's called something like Panther and it's not called something like American health, blah, blah, blah, people. We all think we're getting so creative, but all those names sound the same.

So yeah. Walk me through it. Origins of Panther the naming. Were your sons involved? How did this come to be? And how did you make the bold move of doing a non-medical name in the age of everything, either being a medical name or being some made up name that you're hoping is not a, uh, a name from a different country language.

That means something different three years down the road, you know, like some of the drug names. Yeah. We had a company in grand rapids, it was named kind of a derogatory name for one of the ethnic groups. And they didn't really know it because it was associated with their product and, uh, they ended up changing the name to something that was, um, you can't go wrong with, so why was that the naming how'd you come up with that versus this oddball name or, or something that sounded too 

Gordon Vanscoy, PharmD, MBA: medical?

Yeah. You know, it was interesting. I had, um, just semi-retired. At a relatively early age, um, I had just sold a company, the medical education company, and I was taking care of my wife and, and, you know, we were down in Florida and, uh, got a call, um, from a couple former students. Remember I'm always associated with pit university.

Um, and I probably have taught. Thousands of people. And, and that's why I love dealing with, uh, teaching the youth, um, because that's where I get all of my drive and ambition and hope for the future. Right. You know, it's just, it's contagious. So get a call. And the, and the, the student, the former students said, um, they were in practice and they said, Hey, we know you started this, you know, you were involved in the starting of this company, you know, at the very beginning.

And we'd like to, to create a specialty pharmacy and as, and I kind of chuckled a little bit and, um, but they were brilliant students. And at the time, you know, back then and 

Mike Koelzer, Host: pharmacy students, or business students, 

Gordon Vanscoy, PharmD, MBA: pharmacy students, and, um, three of them. And I said, uh, you know, send me your business plan because that, I mean, that's one of the things I taught was business plans in medicine.

Yeah. So I, you know, I got their business plan and it was about, and, and it was a different twist, but I read so much passion in their business plan that I said, you know, I'm gonna fly back to Pittsburgh and we're gonna, you know, we, we met at a, a little breakfast place called Eaton park in a place called squirrel hill [00:30:00] and we had breakfast and, uh, I listened to them why they wanted to get back into the business, into this business, the 

Mike Koelzer, Host: business of specialty specialty drug, which they know you had sold one 

Gordon Vanscoy, PharmD, MBA: in the late eighties.

It, well, I was in, and that's when I started in it. We sold it in the nineties and 

Mike Koelzer, Host: they remembered that company. Yeah. Because I taught them. You talked about it. 

Gordon Vanscoy, PharmD, MBA: Gotcha. Yeah. Yeah. So they knew it. So. Had breakfast with them saw just the sheer talent and passion that just made me feel alive again.

And, um, so I said, let's do it. You know, you guys, we're gonna bootstrap this company. We're gonna try to find a niche where it's not gonna be the David and goly situation, because remember, you know, what's going on in the market out there. You know, the big guys are, you know, the payers are reducing how much they're paying pharmacies.

Um, when you're buying from wholesalers, if you're not big, you're paying the highest price for everything. Yeah. Right, right. So, you know, every, the, the little guys just getting squeezed out completely, I said, we've gotta find a. um, to, to create a unique business model, 

Mike Koelzer, Host: Even in specialty, you need to be unique.

You couldn't just say we're specialty. We have to be unique in specialty even 

Gordon Vanscoy, PharmD, MBA: more. So 100% because the margins were just driven out, um, you know, by the big guys, when you're both the payer, as well as the pharmacy that doesn't 

Mike Koelzer, Host: work out well, 

Gordon Vanscoy, PharmD, MBA: it works out for them. Yeah, it does. And you know, God bless 'em.

And so we started this, um, you know, we bootstrapped this company. One of the, one of my, uh, junior partners had a garage, if you would, up in, uh, beaver county, Pennsylvania. So it wasn't even close to an. But it was, you know, pretty much free rent because it was, uh, it was the BA it was downstairs in this building upstairs.

A nun lived, um, who would gather our mail, whether we knew it or not. Um, and give it to us about every three or four days, but that's where we started. And we bootstrapped, I personally lent the company money to get it going. You know, I promised them from the first day I started working with them. I would never dilute them, whatever they're in on day one, I would ensure them the day we walked away from the company, they would have the same percentage ownership and could have done that.

Countless 

Mike Koelzer, Host: times, if you were shift, how could you have done 

Gordon Vanscoy, PharmD, MBA: that in the operating agreement, right? The rules of how you run your business, because I was the majority owner I could have. We need 5 million more dollars for a capital call. Right? Well, if the guys don't have 5 million, I own a higher percentage of the company.

It's 

Mike Koelzer, Host: Almost like they would have first rights of refusal or something, but then you would say, Hey, if you don't have it, we gotta do this. So, 

Gordon Vanscoy, PharmD, MBA: and, and that would be the, that would be the unethical thing to do, but it happens all the time. Right? Yeah. Gotcha. Okay. These guys, you know, treated them like my sons and they, uh, they worked their butts off.

And the first employee, um, who's currently the president of Panther now learned every position in a company. He was the only employee for months. And, and you know, myself and another partner volunteered. We haven't taken a salary for years. And, and, you know, we grew our business regionally on the specialty side with very small margins.

Right. Um, it's not what we wanted to be, but we had to get payer contracts. We had to develop a relationship with the wholesaler to buy 

Mike Koelzer, Host: drugs, kind of just kept you moving in the right direction, but you knew it wasn't your thing yet. Exactly. 

Gordon Vanscoy, PharmD, MBA: Then comes 2014, a friend, um, who I had from the medical education world.

You know, we did some very good things in terms of education for them. He was in the, uh, pharmaceutical industry. He left a big company and went to work for one of these startups. It was me who called him. And I said, you know, would you be interested and arrest his history? He took a chance on us. We had never distributed an orphan drug before that.

Ever, but he knew, um, through my reputation and, and integrity, he was willing to trust us and we knocked it completely out of the park. 

Mike Koelzer, Host: You sort of knew this was coming from the other professor, had your eyes in a little bit. And then this person from the west coast, he was coming up with the drug. You called him, you said, 

Gordon Vanscoy, PharmD, MBA: yeah.

I called him when he left big pharma and went to work for a rare 

Mike Koelzer, Host: pharma. And then you're. Okay. I know he rarely went to work. I also know that this pediatrician went into effect. So this is kind of all coming together. It's coming together. Things don't happen by chance. I mean, you had to have Panther RX going for a few years without much profit for this quote chance to come along, right?

Yeah. We 

Gordon Vanscoy, PharmD, MBA: were in a red for, for several years and then the [00:35:00] chance came and what we saw, if you look in the FDA pipeline at phase one, phase two and phase three clinical trials, there were an emerging number of new orphan drugs coming in phase one and phase two, alls we needed was the opportunity. So you kind of had 

Mike Koelzer, Host: your eye 

Gordon Vanscoy, PharmD, MBA: out.

Absolutely. This was an opportunity. See, I had a, I had a, um, relationships in, in this industry. Not only from state lands from before, but from many of the other companies I had and trust me, the world of medicine is a very small world. Okay. Um, and, and, you know, the key is, is, you know, if you've got a great reputation, which, you know, thank God I had, um, you know, people remember that.

And that's what happened with this gentleman. And, and, you know, he gave us our break and the rest is history, but Panther came to answer your question. Um, the three students, they were all pit Panthers, 

Mike Koelzer, Host: pitt Panthers that came when you said the Panther pit, you know, then I'm thinking about that then. 

Gordon Vanscoy, PharmD, MBA: And Panther was perfect because it was, um, first of all, it had the feeling of a living thing.

It, and it could be aggressive, but, you know, it was still a cat. And, and, you know, it was one where we felt that, you know, we put a little X after the R at the end of Panthers, which made it. RX. Um, and we felt it was unique in the industry. No one else was doing that. And that's what we 

Mike Koelzer, Host: did. You mean having like a name versus one of these American medical something or other, or, or this name that no one's heard of 

Gordon Vanscoy, PharmD, MBA: before?

Exactly. Exactly. And that's how the Panther. So Panther was born outta the commonality between the four partners, which all went back to, uh, the university and, uh, you know, the fact that, you know, we were all pit 

Mike Koelzer, Host: Panthers. So you started this and then you were in the red. Did you think that break was gonna come?

More specialty specialty, like orphan, or did you not know what that break was gonna be? What else would it have been if it wasn't orphan? Well, 

Gordon Vanscoy, PharmD, MBA: we actually tried a couple different avenues. Right. Really? So yeah. If you think about it, who runs, you know, who manages all of the specialty pharmacies? It's these big players, but there's another loosely knit group of people who could be a big player that never was, and that's this network of community pharmacies.

Mm. So our thought was one of the thoughts that we tried was could we create this spoken hub model? Yeah. Where Panther would be the back end to all these community pharmacies, where we could, we could make every community pharmacy, a specialty pharmacy. Um, but you know, we tried it and, um, it just, let's just say, um, It didn't work because we just couldn't have the magnitude of purchasing and the margins.

Weren't there to have two people in the business, taking a cut from it and trust me, it wasn't until Panther, because think of this, the unique thing about Panther and remit is we don't go through wholesalers anymore. It's direct from the manufacturer. 

Mike Koelzer, Host: Is it because these companies are too small to go with the wholesaler or they just don't need the wholesaler 

Gordon Vanscoy, PharmD, MBA: anymore.

Don't need a wholesaler anymore. If you only have one or two or three pharmacies distributing the product, you just don't need it. Why 

Mike Koelzer, Host: send it to a big distributor to distribute it to everybody, but they're only gonna turn around and send it to one or two, exactly. Two or three 

Gordon Vanscoy, PharmD, MBA: pharmacies. Exactly. So, you know, when I was thinking about the rare market, I said, not only did we need to change specialty back into specialty, we need a new business model.

And the new business model was working directly with the manufacturer. Okay, where we're cutting. We, we're not dealing with a wholesaler because remember if you're a small purchaser through a wholesaler, you're paying the highest prices right now. If you're dealing with the manufacturer, it's a different story.

Right? The second thing is when you're dealing with payers, um, if, if you're dealing, if you have a lifesaving medication and you're the only place you can get it, um, it, it's not in their best interest to turn patients down. Um, and so it is, we changed the business model. 

Mike Koelzer, Host: What other model you've talked about, the independent pharmacy one, not working out.

What other, were there any other ideas that you or say RA, we gotta, we gotta come up with a few of these now. 

Gordon Vanscoy, PharmD, MBA: Yeah. And, and you know, one of them, it's called three 40 B. I 

Mike Koelzer, Host: know enough about that, but not enough to tackle it in the show yet 

Gordon Vanscoy, PharmD, MBA: for the listeners, you know, three 40 B is, uh, where the manufacturers are required to give special pricing.

Heavily discounted pricing to institutions that have what's called the disparate population, which means that, you know, they're they're, um, financially disadvantaged, right. Manufacturers are required to almost, you know, sometimes up 60, 70% discounts on [00:40:00] drugs, um, to let's say this hospital, um, to serve the underserved, it's a financially right thing to do.

And this is by legislation. Sure. So here, our thought back then was, is, well, okay. Let's get into this business. But then all of a sudden we actually did get into the business and, and actually we're doing financially well, but I'm telling you, Mike, it just didn't feel right. That's 

Mike Koelzer, Host: my reason not for doing it yet in the end.

Yeah. 

Gordon Vanscoy, PharmD, MBA: It just, you know, we, we were making money on something that was intended for just patients that were disadvantaged, but you're making money on other people mm-hmm um, which, you know, we just said, we didn't want our names associated with it. Right. Um, and we thought it was gonna be a short lib business.

It still exists out there and people are still making money on it. But I tell you, um, you know, it's kind of like rebates and PDMs, you know, someday transparency will come where, um, you know, I don't know if everyone's doing. with what the intent of the lies. 

Mike Koelzer, Host: Yeah. That's as deep as I got, because I was actually gonna have three 40 B people on the show that helped companies, you know, set up and things like that.

Yeah, yeah. Yeah. And I, I wrote her back and I said, you know, thanks, sorry about this. But I think if I have this on the show, I'm gonna have to do like both sides of this. And I think I need somebody who is more, maybe on the political side, than somebody who is trying to make their business work for this.

And I said, I don't think I can do you justice? You know, I don't know enough about it, but I know there's some controversy about it. 

Gordon Vanscoy, PharmD, MBA: Yeah. And, and that controversy. Caused us, not only to do away with that business, we could have actually sold the business, but we didn't even feel that we, we should profit from selling the business.

We actually gave the business away. Let's 

Mike Koelzer, Host: get this out under our name and give it to someone, someone else. Yeah, exactly. Exactly. Yeah. 

Gordon Vanscoy, PharmD, MBA: And, and actually there were some community pharmacists, um, that we knew that we thought were legitimate ethical people that would do at least a good job with, and we still thought it was gonna be short term, but they're still doing the business, which is, you know, good and God bless them.

But, um, you know, there's a day of reckoning coming for three 40 B2. Great intent intended for all the right reasons, but there's just too much money being made. 

Mike Koelzer, Host: Are there some pharmacies that maybe can get these drugs to the underserved where the hospital couldn't and that's why they're getting those prices.

Is there like a good there's like a good, like there is an idea behind it. There absolutely. That got 

Gordon Vanscoy, PharmD, MBA: abused right there is when it becomes a business yeah. And, and, you know, business people get their hands on it. Suddenly the intent. Get lost, there's loopholes and things. Yeah. And it's all about taking a product that they can purchase for very little.

Yeah. And selling it to as many people as they can was the 

intent 

Mike Koelzer, Host: of that kind of distribution. Was it to get it disadvantaged, but yes, but now it's gone further than that. It outlived or out extended its true purpose kind of thing. I, 

Gordon Vanscoy, PharmD, MBA: I think there are instances of that and there are also instances of people, the right people benefiting from it, but we don't know, we just knew it wasn't us.

So we tried the three 40 B things. We tried the, um, Specialty what we call that retail. Um, and there, there were several other things, but it wasn't until 2014 where we saw this game changer coming. When you 

Mike Koelzer, Host: said you went in the red Gordon, did that take longer than you thought? Or were you prepared to get in the mix?

Because like you say, you knew you needed the associations, you knew that this wasn't something you could, what is it turnkey? You couldn't do this overnight. You needed the background. How long were you willing to, how many years did you think you needed of background? And when would you have said, all right, guys, we've been doing this for 15 years now.

and we don't need this much background. When did you need that break to happen? Was it like two or three years? You knew you something better come 

Gordon Vanscoy, PharmD, MBA: up. Well, you know, we were probably in it several years, um, before we turned to black and. It was because of the, you know, the hard work of my partners and, you know, the, um, people that we brought on, where we were able to build a regional business.

But I, you know, I'll tell you, you know, when, when do you call it quits? Um, you know, I haven't always been associated with businesses that made money. Um, you know, any entrepreneur, um, you know, it's not about all the successes you have, it's, you know, sometimes about things that just didn't work out. And, uh, you know, with this one, at least, you know, we had the inkling even after year one, That regionally we could do.

Um, we seemed to be doing okay. My, [00:45:00] our primary goal was to pay the one pharmacist salary and, and, you know, break even. And I think we did that in year two and a half, something like that. 

Mike Koelzer, Host: Gotcha. And so it's not like you were in the red with like 30 pharmacists that you were trying to like, like these companies, like Amazon takes losses on no, no.

You were losing, but you knew you needed to do that a little bit to get your, to get your base on this. Exactly. If you and your acquaintance got together from the west coast and said, let's do this. If you started at that point, you would've had to wait another year or two for you to get your pharmacy in gear.

Gordon Vanscoy, PharmD, MBA: Oh, you needed to be there. Well, it's not only the pharmacy and gear. Keep in mind. To do anything on a national basis. You've gotta get licensed in all 50 states, as well as DC and Puerto Rico. Right? First of all, it's not inexpensive. And secondly, it's a regulatory nightmare, but it's a barrier to entry. So during this, during this three year period, we are in the process of getting licensed everywhere, right?

And that's a requirement for any national business you do. So that's what we did in, in many states, there is reciprocation. In some states you have to sit for the state board, even if you're in Pennsylvania. And let's say, um, Texas, you, you have to go down and take that state board to get licensed in Texas to distribute to Texas.

So we did that. We did that. Um, so it was, you know, it wasn't necessarily an easy process, but it was one we felt if we were gonna do anything of magnitude, um, this was some of the blocking and tackling that needed to happen. Someone 

Mike Koelzer, Host: had to take a test 

Gordon Vanscoy, PharmD, MBA: down in Texas. Oh yeah, really? Yeah. One of the pharmacists.

Yeah. Yeah. And most of them keep in mind once you're a pharmacist, you know, you're the basic, um, science part of that. Um, that's, that's called your Plex. That's the biggest part of the test. Gotcha. Yeah. The part of the test in most of these places you have to take, even though there's a couple exceptions, is the law part.

Oh, I gotcha. So we had to go down and get law 

Mike Koelzer, Host: licenses. Gotcha. Hey, note to self Gordon. If you're taking notes there, remember not to hire me for any of that for any of your companies taking the tax. this isn't a job interview for me, but just make sure you don't hire me for that. I can tell you that's gonna be a, that's gonna be a loser on your charts.

yeah. So when you got this going, you knew you might be in the red for a year or two, while you got these licenses going. Well, in fact, even if you had a national idea, it wasn't gonna come to fruition until you got all the license and all that stuff anyways, 

Gordon Vanscoy, PharmD, MBA: exactly. To get into insurance. Um, you know, you can get, you can enter into these agreements where you can get access to payers, um, not necessarily a good rate, but you can get access to payers.

Um, however, to get Medicaid licenses. Okay. Oh, you have to have a patient in that state and actually have a prescription in hand in order to get your Medicaid license. And it was I mean, it wasn't until we had this opportunity. In, you know, 2014 going into 2015 where you were distributing to all 50 states where not only did we have 50 licenses, but we had payer relationships everywhere, because think about it.

Why would a pharmaceutical, a biopharma manufacturer ever trust you, if you weren't able to handle everything right. Everywhere. And that's, that's what we had to 

Mike Koelzer, Host: have. You can't do one. It's like why now they gotta basically start over, you 

Gordon Vanscoy, PharmD, MBA: know, exactly. exactly. So 

Mike Koelzer, Host: we had to have that. That's interesting.

You said they had to have a script in hand, is that like, Medicaid's not gonna deal with you until we know someone needs it. We're not just gonna set these up for the hell of it. 

Gordon Vanscoy, PharmD, MBA: Exactly, exactly. And that's what they try to prevent. Now we'll get a letter in the mail that says, um, you know, your, your Medicaid status will be considered once you have a prescription mm-hmm

So we knew it was just a function of formality. Yeah. And once you get that prescription sent to the state, it all goes through and, and everything's good. So now you're a licensed provider in that state. So, you know, there's all these barriers. Um, and then you've got, you know, the big guys, you know, breathing down your neck.

Um, , you know, they're like at first, you know, Panther is a nobody. Yeah. Then it was the Panther. Right. Then it was, what is this thing? Panther. And then all of a sudden they were like panthers. You know, it just changes over time where your credibility becomes established, not only in the business model you had with manufacturers, but quite frankly, and the fact that, you know, we were kicking butt in patient satisfaction, PA patients loved us.

Um, and, and that's because, you know, we didn't have all the phone trees everyone else had where you called and pressed six for this and five for that, we had a live person, 90% of the time you dealt with the same specialist that knew your disease every time. Um, so our, we, there was an independent [00:50:00] entity that did, um, patient satisfaction and you had to pay to be part of this.

Um, we won three years in a row, the national patient satisfaction, um, award, um, and we had them called NPS scores. Um, we had, our scores were in the 90, some percent of patients loving us. 

Mike Koelzer, Host: You know, better than I do. But when we were at the first level of specialty, there was probably some of these things, you know, if, if you go back 20 years, you know, or 30 years, and all the big people come in, they start making cuts and we're gonna have a phone operator versus a specialist and all this stuff.

And then it's like, yeah, absolutely. We might have been doing this, you know, 20 years ago, but we're just repeating this, but now we gotta call it 

Gordon Vanscoy, PharmD, MBA: specialty specialty. Exactly, exactly. 

Mike Koelzer, Host: When this thing started then taking off, was there ever like a holy blank moment where you're like, wow, I mean, did, did this exceed your expectations?

Gordon Vanscoy, PharmD, MBA: Yeah, it did, um, by far and, you know, I call it, you know, you know, blessings galore. I was at a point in my career where Panther wasn't about money Panther was about creating a new, uh, model where we could actually. Where pharmacists could use what they know to benefit patients and nurses. Um, cuz we had pharmacist, nurses, doctors, et cetera, but we wanted do something where we can make a difference and rare disease is, is to have a company where you can make a difference where you give a lifesaving drug to a family that actually allows their child to live or allows their wife to live or changes their, it, it is beyond any words, uh, of, of value.

And that's, you know, that's what made Panther special. Um, that's what gave Panther a heart. Um, because everyone who came to work for us didn't come for a job. They came because they knew they could make a difference. And it was the coolest thing in the world. My junior partners, um, they had never been involved in a business on the national scale, so they didn't even know these roadblocks existed.

So they just, they just. Either crushed right through them or ran right around them. 

Mike Koelzer, Host: My wife's a teacher. I love teachers, but oh my gosh. Talk about a group of people that love to sit in the teacher's lounge and bitch about stuff. You guys didn't have that because no one knew what to 

Gordon Vanscoy, PharmD, MBA: bitch about. No, no.

And, and that's, that's what the beauty was, is, you know, we hired young, ambitious talent. Um, you know, what I didn't do for the first, um, seven years of the company was hire old executives that only knew how to do it the way they did it. Yeah. Right. Okay. Yeah. Um, if you look at our values, one of the ones that we embraced the most was, you know, disruption and, and these, you know, I give all the credit for Panther by the team that surrounded me.

I had such an incredible leadership team and, and it was about taking, um, N not putting the pieces of the puddle puzzle together the normal way, but sometimes, you know, I would bring in talent that no one El no one even saw the value in. And my God, they just paid off a hundred fold. Doesn't always work, but it was just incredible.

One of my, one of my executives, uh, probably the most recent hire that I had there. This individual was associated with university prior to that and had a career in, he was a senior member in the police force. And, prior to that had had some other unique things. He was one of the best leaders that I ever came across, but he never had an exposure to pharmacy medicine, specialty pharmacy, but I knew he was so bright.

He came on and just caught fire. And he today is, is one of the reasons why Panther, um, went from in the last two years, you know, we were probably, you know, doing, you know, in the. Eight $900 million range. And, you know, in the end we were doing several billion dollars and it was a, an incredible, uh, you know, it was because of talent like that and hiring to culture, not hiring a resume when you get your first national contract exclusive, it's, it's a blessing and luck mm-hmm when you get your second one.

Yeah. It's like, wow. You know, this, this is feasible. And quite frankly is when we got our third contract, uh, when I said, you know what, we've got a legitimate business here. Yeah. And we grew that to dozens of contracts. Um, and, and it 's when it occurred, you know, and, and we were pontificating back in 2017.

Um, and, and the guys looked at me like, I, I had four heads. I said, you know what, guys, by 2020, [00:55:00] we're gonna be a billion dollar company. And, and they were like, you are outta your mind. You are outta your mind. But if you think about it, these products are so expensive. No, one's doing what we're doing.

Yeah. Pulse we gotta execute. And, and if you do it, you know, it's gonna happen. And, and that's what happened 

Mike Koelzer, Host: When you took that little break and you kind of thought that maybe your career was maybe you would just be smoking a cigar and, and pontificating from, you know, your lounge chair. Yeah. On a personal level.

Was there any challenging stuff? Like, I didn't think I had to do this crap anymore or was it 

Gordon Vanscoy, PharmD, MBA: all okay, well, let me tell you the honest of goodness truth. I attribute Panther to one thing and that was my wife. I was, I was semi-retired for three years in Florida, three, not three years, three months in Florida, 

Mike Koelzer, Host: It felt like three years.

Maybe 

Gordon Vanscoy, PharmD, MBA: three months. It really did because you know, the whole concept was, you know, I'm gonna come down here, enjoy it with my wife. And we were going, you know, we were gonna boat and fish and all this, I suddenly realized that there was no peer group here. Right. Everyone that would, would've been a peer was, you know, two or three decades older than me.

Yeah. You know, most of them were golfing and you know, and so all of a sudden, you know, my wife came to me and said, you know, I think you have more to give to the world than you've given. How old were you at the time? Oh, wow. God, I would've been. like 

Mike Koelzer, Host: 50. Yeah. And they're, these guys are all 65 or whatever, or 60 or whatever.

Yeah. Yeah. I, 

Gordon Vanscoy, PharmD, MBA: I actually, I was 48. I 

Mike Koelzer, Host: remember. So she came to you and said you 

Gordon Vanscoy, PharmD, MBA: had more to give. Yep. And, there were two parts to that. Part of it was the giving part. The other part was the fact that I was giving too much to her. Um, so much of my time to her, she didn't like that too much of a good thing can be not a good thing.

Mike Koelzer, Host: So she wanted to get rid of you for some time, right? Yeah. 

Gordon Vanscoy, PharmD, MBA: Well, you know, she had her own life. Yeah. You know, she was, she, she had her own things and, you know, I was just constantly around and so she just gly encouraged me to go up and meet these, my former students. And she said, you know, let let's do this.

And, and I said, okay. And that's, that's the honest to God's truth. And it was because of my wife, Beth. Wow. Um, that I got back into this. And as soon as I got back into it, it was it I'm telling you, it was like, you know, I'm, I've never done drugs, but I imagine it's like the feeling of doing Coke. That's great.

You know, it's just this high you get off just, you know, putting a business back together and seeing people succeed. And the most rewarding thing aside from serving our patients was filling the parking lot. Yeah. Um, just seeing the cars fill the parking lot. Yeah. And Mike, we got to a point with Panther where we were, so we had, we had so many employees.

I had to hire a valet. Wow. Um, because either I had to transport people, um, from another parking lot and get buses and deal with insurance and all that, or I had to get a parking valet and double, triple park people. How 

Mike Koelzer, Host: many people were 

Gordon Vanscoy, PharmD, MBA: around, well, you know, a couple hundred, but you know, a couple hundred was a lot for what we were doing.

Um, It didn't require thousands of people. Right. Because remember small populations and yeah. High touch, you know, it wasn't, um, automated. That was all on one 

Mike Koelzer, Host: building slash campus. Right. I mean, you didn't have anything like something across town or anything like that. They were all right there. No, no. 

Gordon Vanscoy, PharmD, MBA: Actually, when we, when we expanded where we had this issue with parking, I did, um, get another building.

Um, and the building was, you know, five minutes from this current building and we built a brand new facility and then we got a satellite facility or duplicate facility in Ohio, so that if Western Pennsylvania was to blow up, you know, we had to be on a different power grid. So, you know, a lot of this wasn't.

Necessarily needing room, but it was about reassuring our partners that we had the capacity to survive. 

Mike Koelzer, Host: No matter what. Yeah. You gotta start thinking about 

Gordon Vanscoy, PharmD, MBA: that stuff. Yeah. Yeah. Cause there was, when COVID hit, we had no choice, right. That there is no such thing as shutting down, we stopped serving patients, people get sick and, and, and get harmed because they can't get 

Mike Koelzer, Host: their drug anywhere else.

Were you a CEO during this time? Was that your 

Gordon Vanscoy, PharmD, MBA: designation? Yeah, my, my, I was CEO chairman the whole time. 

Mike Koelzer, Host: And you went from there to selling? Yep. If you didn't sell, would there have been a time where you said I don't, I don't wanna do this day to day stuff or would that have been okay for another five years or 

Gordon Vanscoy, PharmD, MBA: whatever?

You know, Mike? I was so blessed because my philosophy in leadership, you know, was very much like Steve jobs. I hire good people and I expect them to do their job. Right. Um, I'm not a micromanager. So I was able to be CEO of two companies from Florida for a company in Pennsylvania, you know, it's commonplace now [01:00:00] with COVID and everyone being decentralized.

Well, back then, it wasn't, you 

Mike Koelzer, Host: we're still in Florida. Yeah. All The while bothering your wife down there. Yeah. Just having more to do so she could go out and have some fun just because you had no friends down there doesn't mean she has to stay home with you all the time. Exactly, 

Gordon Vanscoy, PharmD, MBA: exactly. So I was, uh, but I was traveling back and forth to Pittsburgh family still in Pittsburgh and, and friends still in Pittsburgh.

Um, but I was, you know, just being much more, um, engaged and, um, yeah. And it was a situation where, um, It just worked out perfectly, but it was one of, of being virtual and having a team on the ground that changed over time. I had, I had the most fluid organizational chart you'll ever see, and it changed very often.

Um, but I never had a president, never, I wasn't into giving people. I wasn't about people, titles. Um, I wanted people to, you know, to, to embrace the responsibilities that they had not grown into something they thought was going to be so gotcha. Um, I, you know, the whole time, um, it wasn't until December that we actually had a president and the president was appointed when I transitioned to less responsibility and it went over to the new company.

Gotcha. Um, but I had general managers before that I had executive vice presidents before that. Gotcha. Et cetera. So these people ran the day by day. I was a twenty four seven person. They could call me any time. I never, I hated scheduled calls, hated them. If something was going on, call. Tell me what's going on, text me that way at any point in my life.

I know everything's good. Unless I hear from something I 

Mike Koelzer, Host: did that, not from the best mental position, mine was always like, I don't wanna go back to a bunch of people bitching at me and have this bigger, no bigger thing, but yours came from a better angle, but you're right. If you have a problem, let me know if I don't hear from you, I'm assuming that we're doing 

Gordon Vanscoy, PharmD, MBA: okay.

Absolutely. And texting was my mode of communication for 80% of communication and short text. They had to get used to that. yeah. I mean like two word texts. Yeah. Cause you know, at first they thought I was, you know, I was trying to be intimidating or something. Um, but it was just, it's just a function of efficiency.

So, um, you know, they got used to that. Um, you know, we got in a manner of reporting where they actually began learning to just, they, they began being able to what I was gonna say so that it was just a. It was a self-directed group of incredibly talented people. 

Mike Koelzer, Host: Once they know your method, then they're almost checking off on you.

They're kind of looking at you and you kind of give a figurative wink, you know, or a head nod and they, and there 

Gordon Vanscoy, PharmD, MBA: they go. Yep. And if all, all five of them agreed on a subject, uh, I don't know if one time when I disagreed, because if you have five brilliant minds yeah. That understands something that's going on better than I do.

I'm not gonna question. Yeah, 

Mike Koelzer, Host: exactly. Exactly. So Gordon, I go on your, um, well, let me put it this way. I look up your name online and we have all these entrepreneur of the year awards. Congratulations on that. Thank you. Here's what I want to ask you. If you, or when you have your book come. What are the chapters that you would've written that you think are maybe a little bit, maybe you didn't invent those methods, but you don't see 'em in every book, like look people in the eye and shake their hand and call 'em by their first name and all that kind of stuff.

If you were writing a book, what things without repeating the cliches, what would your chapter say? Or what would your list 

Gordon Vanscoy, PharmD, MBA: be? I love this approach. Um, you know, we had extreme approaches, you know, the junior partners were all about getting the work done and I was all about, this was a poker game.

Okay. And let me tell you what the difference is between poker and poker tournaments. Okay. Poker is what most small entrepreneurs are about. It's about winning on a daily basis, winning that deal, winning just, just a confined, win a poker tournament. You're playing with chips that you're willing to reinvest based upon what's.

You know what your opportunity is to win the next. Right. That different approach made all the difference in the world. I had a very high risk tolerance. I, and, and since I was senior partner, you know, we made the decisions of constantly reinvesting in the company because, you know, I wanted the partners to do well, but it was all about building this company for something really big.

And it was the difference about playing a poker hand versus being in a tournament. And the tournament is having the long, having the vision of seeing that you can build something really big because 

Mike Koelzer, Host: a tournament, you can lose a game and still be back in the tournament. Right. Is that what that is? 

Gordon Vanscoy, PharmD, MBA: Exactly.

Exactly. Or, [01:05:00] you know, you could. You know, a hand, you know, you may be done a few chips, but you know, the next hand it's about the 

Mike Koelzer, Host: game versus a whole night of poker or the tournament. 

Gordon Vanscoy, PharmD, MBA: Exactly, exactly. You know, that was the story about approach and, and risk columns. A lot of 

Mike Koelzer, Host: people think entrepreneurs are risk takers to win the one game.

And if they don't they'll lose, I think a lot of people don't understand that entrepreneurs, they don't like UN uncalculated risks. They like risk, but it's gotta be calculated. And in the end you wanna win that tournament. You're not gonna throw it all away in one hand. And if it doesn't go, you're gonna go live on the 

Gordon Vanscoy, PharmD, MBA: street.

100% example, the three 40 B discussions we had. Right? Yeah. You know, it wasn't worth it. I'll give you another example. You know, the PPP. Yeah, we didn't know what was happening at the beginning of COVID we applied for the PPP money. We were awarded the PPP money and, you know, to the tune of, of, of a lot of money.

Yeah. Could I, in all conscience, keep that money, knowing that my business was still doing okay. No, we turned it back in. So that's the poker tournament approach of saying, Hey, I, I don't wanna just win this one hand or take this money off the table. It's about reputation and integrity. What's the next chapter on it being detached?

And what I mean by being detached is because I lived in Florida. I did not get involved in the daily drama associated with my team. Wait a minute. You're 

Mike Koelzer, Host: saying there's team drama. 

Gordon Vanscoy, PharmD, MBA: yeah. The thing I dislike the most 

Mike Koelzer, Host: about. Yeah, I'm sure you've had your fill of 

Gordon Vanscoy, PharmD, MBA: that, but being detached allows me to look at things more objectively mm-hmm allows me to look at if there's a squabble, if there's a territory issue, if there's, um, something that has more emotion than fact to it.

By being in Florida and not being there all the time. Yeah. It made a world of 

Mike Koelzer, Host: difference. You're weighing ideas, possibilities, directions, versus weighing that Sally looked at you this way, or Bob looked at you this way and you have this feeling of this net. It's like, no, you're still gonna weigh all this stuff, but it's gonna be detached into its objectivity.

Now it might be some subject and I mean, a little bit different for people and things, but you're not looking at expressions or relationships or all that it's just 

Gordon Vanscoy, PharmD, MBA: objectivity. No, no, you're absolutely right. And I think that helped immensely. Hmm. Um, you know, you have some issues with a business and I'll, I'll give you an example of this.

When you start with three young. Ambitious people find out that companies often outgrow talent. And what I mean by that is somebody may be a good general manager when you have, you know, 30 employees, but when you have 150 employees, it just might not be the right person. So we constantly, I juggled to find the right fit for where people are.

And, um, and it only was because of that OB objectivity. It also was the fact that, you know, I think if I had too much of an emotional attachment to people, um, I wouldn't go in and walk in and say, Hey, Joe, you're no longer the general manager today. You're gonna take over sales. Um, and, and because all of a sudden that emotion isn't there, um, you know, and they get used to that.

They did. And, and they ended up benefiting it in the long 

Mike Koelzer, Host: run. I use that in my store example where, you know, it seems like employees. Come in and they can make decisions for themselves when it's just like, Hey, this, this new job I might get, I'm putting my two week notice in because that's a 51% better.

You know, your pharmacy's still 49, but this is 51. Unfortunately managers and owners, we wait till something's like 95 crappy and 5% good. And we finally say, all right, we've gotta, we gotta do something finally. But yep. In, in your, in your mind, yours could be 49, good 51 bad. Or it could. 70 good. 30 bad, but you just have a hunch yeah.

That something's gonna work better. And by being unde detached, you can call those hunches out where you might not, if you just went to the baseball game the night before or something 

Gordon Vanscoy, PharmD, MBA: like that. Yep. Yep. And, and Mike, you know, the other two chapters, you know, one would be, you know, I did this before. I was there at the beginning of when the specialty launched.

This was again, specialty launching again. Right. Okay. So this, this wasn't anything new. Yeah. But what we had to do is to define this new industry. So we actually wrote the accreditation standards, got the accreditation bodies to recognize rare pharmacies, and published the articles to actually create something new.

But I'm telling you customer service and providing clinical care and good care for patients is nothing new. That's the recipe, you know, it was it's, it's all about. [01:10:00] I'm not an efficient guy. You know, the guys who, you know, who focus on driving every nickel out of something, uh, you know, I'm, I'm all about if your patients on a national level are telling you you're the best the manufacturers will come to you and the payers will work with you.

It's that simple. That was like the next chapter. And the final thing is focus. Um, once you find something that is going to be your bread and butter, detach yourself from everything else. So when we found out we were rare and we knew that this was gonna be an incredible opportunity for us, you know, we divested of all of the other business and just focused on.

Even though there were other opportunities that came, that could have provided margin to the business. We said, 

Mike Koelzer, Host: no, at first 2012, you weren't rare yet. You were just 

Gordon Vanscoy, PharmD, MBA: Panther. We were Panther specialty Panther specialty, 

Mike Koelzer, Host: And then you made an official name change at some point. 

Gordon Vanscoy, PharmD, MBA: Yeah. We made a name. Yeah. 2018 Panther.

Mike Koelzer, Host: Rare. Yep. You changed it right over to that. 

Gordon Vanscoy, PharmD, MBA: Yep. Yep. And, and that's when we relaunched our, um, you know, the website and, and then one year after that, um, we proposed to the accrediting bodies, um, a new designation for pharmacy and that was to ACHC and, and Europe. Um, and they, you know, we work with them to create the new standards.

When 

Mike Koelzer, Host: Did you officially launch rare meds? 

Gordon Vanscoy, PharmD, MBA: I believe it was 2017. We actually had a company like this in Panther. Um, but our manufacturer partners were nervous to use this hub in Panther. How do you send all these scripts to be sent out? It's kinda like our previous story about the P pay PBM, especially they said we can't do that.

So if you create a separate company, that's not named Panther, but has the same culture and has the same focus on you, do all that will come. And they came, it's growing faster than Panther did. How separate is 

Mike Koelzer, Host: Is it physical? Is it a separate building, separate business, separate area, all this stuff. 

Gordon Vanscoy, PharmD, MBA: Right? 100% separate.

Separate payroll, separate operating separate systems. Separate. Are they separate buildings? Oh yeah. Yeah. It's a totally separate location. So if you look at the websites, um, you know, we have rare meds, Provo, 10 minutes from Panther, the manufacturer said, 

Mike Koelzer, Host: ah, do what you want. We don't care. Would you have made it that separate?

Or would you have maybe cut some corners by not separating as much as you are? 

Gordon Vanscoy, PharmD, MBA: Y you know, I know in my heart, I would've, um, you know, followed all the rules for the appropriate. Um, separating of scripts. Um, but you know, there's precedence Mike. Um, I think it was, I believe it was, um, diplomat had its own hub internally and everyone questioned, and I didn't want that same stigma of, you know, that, what is it, the Fox in the henhouse?

Um, so we created it separately now for the first year we had shared services in terms of, you know, business things, payroll, accounting, that type stuff. But after the first year and a half, we, um, we transitioned completely over. And actually I took, you know, several of the talented Panthers who wanted a new challenge, brought them over to rare me, you know, Same culture, et cetera.

So that, that's what 

Mike Koelzer, Host: born there. Do you have much company swapping? 

Gordon Vanscoy, PharmD, MBA: No, it actually was, it became a problem about a year or two ago where we'd post a position at one company and not even, it's not even that it was a, you know, a career development thing. Um, it, it just became really, you know, the grass is always greener type thing.

Um, so it became very disruptive. So what, what we had is we required people to notify, you know, Panther that they were interviewing at rare, met, or rare. They were interviewing a Panther. Um, but today because they're separate companies, um, we literally have an agreement not to recruit and they have an agreement not to recruit from us.

Mike Koelzer, Host: How many people at rare med know about Gordon over a. wow. And that's growing 

Gordon Vanscoy, PharmD, MBA: faster. No, it's growing faster. I, if you compare, even in 2014, when we had our first orphan opportunity at the very end, it didn't launch until 15. So if you look at those three years, the growth of the first three years of, uh, of rare meds, even faster, 

Mike Koelzer, Host: forgive my forgetfulness here.

But when we were talking about rare med my distinction in my head was thinking that it was using rare med to get more distribution sites for the manufacturers. Right. But I forget where the commercial versus [01:15:00] non-commercial part 

Gordon Vanscoy, PharmD, MBA: came in. Well, think about this. Um, you, you're a manufacturer and you have decided you want three specialty pharmacies in your network, right?

Yeah. Um, so now you have to select a hub who basically makes sure that the scripts are payable. And make sure that, you know, the priors are done and it goes to, and it's separated to the pharmacies, but now where does the free drug come from? You know, cuz there is a free drug program with almost every drug.

So it, you, you give favoritism to one of the pharmacies, so we decided to make it Switzerland. And that's what rare med does. So we do nothing, you know, we do the free drug program for them. You know, we have all licenses, but we don't deal with payers, no 

Mike Koelzer, Host: payers, how many other specialty pharmacies are you associated with?

Rare 

Gordon Vanscoy, PharmD, MBA: me. Oh, prob I mean, you know, 10 or 12. Um, 

Mike Koelzer, Host: and you do the free stuff. Right? Right. 

Gordon Vanscoy, PharmD, MBA: And keep in mind the manufacturer selects what specialty pharmacies are gonna be in that network. They go through that same RFP process, but it's once they're selected and we are the. Then we are the ones who, you know, we work and set up rules of how the prescriptions get to these other pharmacies, you know, is it physician, you know, physician preference, patient preference, payer preference.

And then once there's no preference, is it, uh, we round Robin them. All right. 

Mike Koelzer, Host: So Gordon, have you learned your lesson? Is this in your blood now? Maybe for another, um, how old are you 

Gordon Vanscoy, PharmD, MBA: now? I am 

Mike Koelzer, Host: 59. Okay. Is this in your blood for under 20 years at this pace? Do you like this pace or will this 

Gordon Vanscoy, PharmD, MBA: slow down? No, I love this pace.

I, and as a matter of fact, um, we're starting a new business. Um, wonderful. You know, on top of remid it, it's kind of like throwing up, always having something else. And now, we're looking abroad, um, trying to take some of the things we've learned here and doing things in other countries. Um, it it's, it's just exciting.

I, you know, I love the thrill of seeing young people succeed. There's nothing more. And, Mike, one of the biggest thrills I have now, both of my sons I work with now and neither 'em are in medicine. They're both business people. They both work for Remen. Wow. That's awesome. I recruited one from wall street.

Um, he worked there for six years, um, and I recruited one who was running the, uh, Uh, he was the controller for the Miami hub, uh, for American airlines. One is running, uh, you know, business, the finance it, and the other one. The other one who came from wall street is running a business. And you still 

Mike Koelzer, Host: give them like two word answers from Florida.

Gordon Vanscoy, PharmD, MBA: Well, they have a boss so which isn't, that's not you , you know, and that that's the key key and, and never undermine their boss, who is the president? Who's the general manager of 

Mike Koelzer, Host: it. That is a huge key. That's 

Gordon Vanscoy, PharmD, MBA: that's a big key. It really is because, you know, I, I, I, I know what a talent they are and what the, but having sons report directly to, you know, have this family thing, it can cloud your judgment and it's not a good thing.

Oh, 

Mike Koelzer, Host: for sure. Yeah. You, that's a huge part of your belief there. Yep. I think you'll be doing this for another, as long as you foresee probably. 

Gordon Vanscoy, PharmD, MBA: Yeah. I absolutely will. Um, you know, bring your life. I tasted what it was like to be, um, you know, to have time on my hands. And let me tell you what happens when you have time on your hands, Mike.

Yeah. Even after three months, the phone calls slow down the emails, stop the text and, and suddenly you start wondering, you know, You start looking for your identity again and for that thrill and it's no longer there. Um, yeah, it's a part of my life that I'll never give up. 

Mike Koelzer, Host: My wife and I, we talk and I've had the pharmacy basically on my mind for I'm 54.

I mean, since I was 14, I haven't had the responsibility I have now, but basically for 30 years, I don't know what life is like without that, in my mind. Yeah. And so when I get away from this, I've never experienced even 24 hours in the last 30 years with this, not on my mind for better, for worse. And so I'm not making any plans when I sell someday, I would like to get away maybe for I'm serious, like three days or three weeks or three months like yourself.

Yeah. And my guess is after not having this on my mind for three days, I might be ready to jump into something. As soon as that I've just never had this off my mind. I've seen enough people do what you do to say. Give me three days before I make any, you know, three months I I'm, I know I'll need something or what I think, I don't know.

What do I know? I don't know. 

Gordon Vanscoy, PharmD, MBA: I'm telling you, it was one of the most refreshing. It's like rebooting your computer. You always have this idea of what retirement's gonna be. And then you're suddenly there and it's not [01:20:00] like what you thought it was. And I mean, you know, it's nice to be in a nice place and, and do nice things, but, you know, even when I go on vacation, I get bored, you know, it's true.

Um, I, I, I recommend the break, um, but I'll tell you once you do it, um, you realize that. The throw is, uh, what you live for. 

Mike Koelzer, Host: Thank God. There's a way to do that now. Right? I mean, 30 years ago, you couldn't do this. I mean, you'd have to move back up there and do this and then take vacations again and stuff.

So we're very fortunate that we're living in a time where you can find something that's valuable yet. Still do a lot of different stuff. You 

Gordon Vanscoy, PharmD, MBA: wanna hear something that's funny, Mike? Um, we, we actually, um, you know, how people kind of accumulate their PTO and, you know, it's, it's, it's almost, we actually, for our, for our senior managers, um, and above, um, we adopted what several other companies did.

We gave unlimited PTO unlimited. You know, our use of PTO went down 22% and, and it, people were never happier because they never had to, you know, think I have to use it or burn it or, or, you know, it, it, it just giving people the independence to do their job was the right thing to do and giving them the freedom of mind to say, if you need to take time off, 

Mike Koelzer, Host: you have it in a company like yours, it'd be kind of neat to say, you have to go, but you have to turn off the switch.

And unfortunately, we probably can't do that for people. If you could give the gift of switch, turning off to your guys, you would, because everybody's still kind of on, you know, even when they're gone and for better, or for worse for a company, but it'd be nice. We could turn all the, I don't mean the phone switch.

I mean, just the switch of your brain, you know, no question about it, but not for long, but not for long or else you go crazy. Right? You 

Gordon Vanscoy, PharmD, MBA: do, you do keeps you alive, you know? Well, it's the right challenges. And, and, and when you put together a team and you know, what they quickly realized, Mike is, uh, To not come to me with things that they don't want me, that they don't want me to intervene.

It, I, explain it to them. When you bring me something, I'm a solver, I'm a fixer. And, I try to fix things. Be careful what you ask for, because you know, I, I, will fix things. There will be bodies. There will be, you know, repercussions, there will be. But I, I use the analogy. I said, sometimes it's like using a sledge hammer for a Thumbtack.

So it takes time for them to understand what size of a problem to bring to you. And they learn that it's just my natural disposition to try to help. And, you know, I don't use, I cross, I cut across. Company lines. I don't follow protocol, you know, I, you know, and, and sometimes fixing the problem causes 'em more issues than not fixing the problem.

So they learn real quickly. Um, and it was a, it was a really, uh, it's a fun thing to teach people what problems to bring to you. Um, they, they quickly learn that process 

Mike Koelzer, Host: with 

my kids. We have a little cottage, 30 minutes from town and we go up there and I told them a long time ago. I said, guys, when am I here watching you?

Cuz sometimes we'd had some little kids out there too. We have to watch 'em. I said, when I'm out here watching you? If one of you screams that somebody's doing something to you. 

Gordon Vanscoy, PharmD, MBA: Mm-hmm mm-hmm , 

Mike Koelzer, Host: you're all coming out. You're all coming out for about 10 minutes. So you can sit and decide how this should have kept going.

So I'm not pulling one of you out of the water because you're, mm-hmm tattling on 'em. So before you decide to scream, decide if it's worth it. All of you coming out because it's gonna happen again and again . And so that reminds me of that. It's like, if they're gonna scream for Gordon, they better know they're all coming out of the water for a while, until things get settled out 

Gordon Vanscoy, PharmD, MBA: and they learn to solve their own problems.

Mike Koelzer, Host: They do 

Gordon Vanscoy, PharmD, MBA: it. 

It's amazing. It's amazing. Hey Gordon, great talking to you. Great talking to you, 

Mike Koelzer, Host: Mike. Thank you so much. Wow. Thanks for your time. That was a fascinating time for me. And so I really appreciate it and continue my best wishes. Thank 

Gordon Vanscoy, PharmD, MBA: you man. Anything I can do for you? Let me know. I 

Mike Koelzer, Host: appreciate it.

Thanks a lot, Gordon. Appreciate it. Bye-bye, take care.