The Business of Pharmacy Podcast™
Dec. 26, 2022

The FTC Awakens in the Fight for Pharmacy Competition.

The FTC Awakens in the Fight for Pharmacy Competition.

In this podcast episode, Doug Hoey, R.Ph., CEO of the National Community Pharmacists Association, bravely confronts the FTC's historically anti-pharmacy stance, inspiring 24,000 responses to challenge the decades-old consumer welfare standard and restore competition for consumers.

In this podcast episode, Doug Hoey, R.Ph., CEO of the National Community Pharmacists Association, bravely confronts the FTC's historically anti-pharmacy stance, inspiring 24,000 responses to challenge the decades-old consumer welfare standard and restore competition for consumers. Doug Hoey, R.Ph. is the CEO for the National Community Pharmacists Association, representing independently owned pharmacies in the United States. He is an experienced advocate for independent pharmacies and has worked to protect consumer interests in the face of anti-competitive practices by PBMs.


FTC Meets With NCPA | Doug Hoey, CEO at National Community Pharmacists Association

(Speech to text)

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

Doug Hoey, Pharmacist: I'm Doug Hoey. I'm the CEO for the National Community Pharmacist Association. We represent the independently owned pharmacies in the United States, and today we're gonna be talking about the FTC and its renewed interest in pharmacy competition and consumers

Mike Koelzer, Host: I'm an old fart, but there's even older farts in pharmacy. when you say a renewed interest, was it there ever in the past or are you just being kind to them saying, there's some rumblings? Was there a dip and are they back? Or is this pretty darn new for us as pharmacists,

Doug Hoey, Pharmacist: Well for most of my career, maybe all of my career, The FTC has not been considered pharmacy friendly by pharmacy friendly, I mean independent pharmacy friendly. in fact, was flipping through some old, N A R D journals. Not that old [00:01:00] really. I mean, not that old to me, from the early nineties.

And, it was talking about, a RD within a RD and NPA are the same thing. and our concerns with the FTC, our letters to FTC objecting to things they were doing. And if we look at the mergers that have been allowed over the last 20, 30 years, some of the unholy alliance between CBS and Caremark, for example, that was FTC blessed.

Actually, NCPA was able to get members of Congress to review that merger after they had approved it. And the FTC waived it at that time. This is now 10 plus years ago. Without saying it was wonderful. The FTC has said thatPBM owned mail order pharmacies, this is now over 15 years ago, that those are wonderful.

The FTC, again, years ago was sending letters to states that were introducing pharmacy friendly, consumer friendly legislation. The FTC was [00:02:00] sending letters to those states, telling them you shouldn't support that legislation. So it is renewed. It is a, I'd say even an awakening. and it's been incredibly refreshing to see the FTC really start to look into the lack of competition that has been happening, the impact of competition that's been happening because of the,the impact of PBMs on community pharmacies and the, and most importantly to the FTC is the consumer harm.

Doug Hoey, Pharmacist: that is taking place because of the lack of competition that PBMs have,have kind of sucked out of the system.

Mike Koelzer, Host: If you were given permission to, openly talk about the FTC before the current administration, would you say that. Focus was not as much on the consumer and maybe more on the deep pockets. And secondly, the little I know about it back [00:03:00] in the day, and I'm thinking, late eighties and so on, it wasn't necessarily the fault of the people on the ftc.

 That was sort of the push almost to, let's think more about just the big people and how they can reduce costs and not care about the individual needs of the consumer. 

Doug Hoey, Pharmacist: I get where you're coming from, Mike, and it's a good point because. What happened? And you go a little bit farther back and, and I've written on this and I, in my executive update, which is a letter I write to the membership, every couple of weeks. And so what happened?

And I'm not a lawyer, I'm a pharmacist. 

Mike Koelzer, Host: Thank goodness. When I have a couple lawyers talking here, everybody would tune out.

Doug Hoey, Pharmacist: Yeah. Well, any lawyers that are listening to this, forgive me for my, if I use imprecise or quite, not quite the language you'd use,

but, so in my pharmacist, interpretation of what happened, yeah. About 50 years ago, a smart guy, a really smart guy named Robert Bork, came up with something that evolved [00:04:00] into consumer welfare.

And Robert Bo, he was famous when I was in high school. I remember because he kinda looked like the Quaker Oats guy. and he was up for the Supreme Court nomination and there was all kinds of controversy around him at the time. but he, he's super smart guy. and this consumer welfare standard basically said that if a merger, an acquisition, shows it's good for the consumer by, good for the consumer, it's cheaper for the consumer

Mike Koelzer, Host: That was it. Yes. they said it was better for the consumer, but it was only focused on cost 

Doug Hoey, Pharmacist: I'm sure people would say, oh, that's not quite fair, that it was something more than just price. But, 

For horseshoe and hand grenades, it was basically the price. and that sounded good and that was a nice measurable standard that people could use.

And so it was adopted pretty quickly. The University of Chicago is famous for this standard. And I think some people even call it the University of Chicago doctrine again, my pharmacist language. So forgive me, all the experts out there. But that's that really [00:05:00] grew and like many things that grow, the pendulum in my opinion, has swung way too far.

So now everything that some economists, some super smart economists hired by a, multi-billion dollar company that wants to merge with another multi-billion dollar company, comes up with reasons why it's gonna, save consumers money, whether it's true or not, whether it can be proven or not, whether it's long term or not, it gets blessed.

and that's been the case it seems like for the last 20 or 30 years. Hence, we have things like CVS Caremark and ESI Medco, that's another one that we used to block. and it wound up being a tie vote at the ftc and in this case, the tie goes to the entities that are trying to merge.

Doug Hoey, Pharmacist: So, yeah, we used to block that I think back in 20 13, 14. So the FTC has been a nice haven for companies wanting to merge. Our [00:06:00] concerns have been What impact has that had on the competition? with independent pharmacies, where the PBMs, it's a one-sided, take it or leave it. There's no negotiations.

There's no real competition. It's a shove it down your throat, type of relationship as probably most listeners know very well.

Mike Koelzer, Host: Yeah.

Doug Hoey, Pharmacist: And then what's been the impact on consumers? and that's an important point because as we do advocacy, We often, our members often talk about how it impacts our policies, how regulations impact them, which are important, but even more important to policy makers and regulators are what's the impact on the consumer?

What's the impact on the customer, the patient? And so, the last couple of years or so, the FTC under the leadership of the chairman, Lena Con, has been interested, very interested in looking at the PBM in [00:07:00] industry and looking at its impact on independent pharmacies and other pharmacies and consumers.

And so that's been a, a wonderful breadth of fresh air to have,someone at the ftc, the chair of the ftc, Questioning this 50 year old doctrine or this 50 year old principle

that seems to have gone unchallenged for half a century, despite the world being a very different place today than it was a half century ago.

Mike Koelzer, Host: The optics on this were tremendous. I remember. D Doug Beck when we were kids, when Pope John Paul II was shot,

and I don't know, a year later or something after recover and all that, there was a picture of the pope in the jail cell with the guy that shot him. kind of like they were bending over talking.

 It kind of looked like they were,you know, mending fences a little bit. Now that was almost as powerful as [00:08:00] seeing you and Lena Conn sitting together at the last conference.

yeah, it's an interesting analogy. I mean, Lena Kon has not shot me, nor have I shot her. but 

Doug Hoey, Pharmacist: 

I would say the symbolism of the FTC being there and the chair of the ftc. And it was extraordinary when we invited her, I'll be very honest. I mean, so we've been reaching out to the FTC for many years and reached out to her office. I thought it was really a long shot that she would accept our invitation.

Mike Koelzer, Host: Did you reach out personally or your team did?

our team started it and then, they sent a letter. they essentially drafted a letter, from me, to her. and when she accepted. I was obviously very pleased,

Mike Koelzer, Host: Yeah,

Doug Hoey, Pharmacist: But it wasn't until we've had government officials who are infamous for canceling at the last minute.

Mike Koelzer, Host: They are. I didn't know that.

Doug Hoey, Pharmacist: They are, they are, especially when they have to come half a continent away, know? So she's flying from DC New York over to, to, to Kansas City where our [00:09:00] annual meeting was. and literally, even though I knew she was in the building, I knew she was in Kansas City. Because she, we, I talked with her on Monday, that Monday morning, and I knew she was in town, I think by Saturday or Sunday, and I talked with her people on Sunday.

It wasn't until I looked around the corner where she was coming up on stage and saw her that I was relieved. I don't know if people noticed or not, but I had all of my questions on a tablet, to ask her and my tablet froze.

Mike Koelzer, Host: No way.

Doug Hoey, Pharmacist: So that did cause a little bit of panic anxiety. So if anyone notices, I'm doing, I had sent a backup to my handheld to 

Mike Koelzer, Host: oh, I'm scrolling on my phone. 

 let the record show that you were not on TikTok at that time.

Doug Hoey, Pharmacist: No, no. It was about a 20, 30 minute conversation,with the chair and she was very gracious. And, yeah, I mean, to your analogy before having the [00:10:00] FTC the chair came to talk to an independent pharmacy, I was told by some people in that, some people in the audience had. tears in their eyes.

they were crying

Mike Koelzer, Host: Wow.

Doug Hoey, Pharmacist: as she spoke because finally someone was listening. Finally, someone with authority to do something was actually listening. so, it's off to a wonderful start again. I have to, remind myself, remind listeners, her, they, the FTCs interest is not in preserving or protecting independent pharmacies.

That's not their job. That they're not interested in that. Their job is to protect and preserve competition and to protect consumers. And so we have to continually give data, giving samples on how competition is being compromised and consumers are being compromised because it's not, their job is not to save independent pharmacies.

that would be more of N CPA's job is to try to save independent

pharmac. [00:11:00] Um, but it's heartening to see the FTC interested.

Mike Koelzer, Host: It's so true what you say about listening and I'm, I always grew up as a crappy listener. 

I would only listen to people that I thought I might agree with eventually, and that's wrong. And all the management books, that's wrong. But it's kind of like if I really listen to someone, I gotta have the guts done to say I listen and I disagree, or whatever. But that listening is so important. And to have her sitting there, you know, the optics of her sitting there and then listening on top of that, not coming with maybe this huge agenda.

That's huge.

Doug Hoey, Pharmacist: Yeah, it is. I mean, so she did have, She wanted to know some of the questions in advance. In fact, she knew. And that's kind of fair. I mean, she's coming out there, she doesn't want some kind of Jerry Springer show or something.

so she had some of those questions. I still went off script a few times. Plus we had the questions from the audience.

Mike Koelzer, Host: You didn't have a script. 

Doug Hoey, Pharmacist: Yeah, 

right, right. Yeah, I thought I did.

Mike Koelzer, Host: You thought you did?

Doug Hoey, Pharmacist: But, yeah, she was open. one of the things that she said[00:12:00] without prompting, 

 I sort of led her into it, but she willingly went. There was the impact, of independent pharmacies, physicians, consumers, So the ftc, one of the, one of the things they did that was new and different was they said, FTC went out to the public, not just to pharmacies, but to the public and said, Hey, if you have examples of agreements or contracts that can impact competition, tell us about those.

Send those to us. And so, of course they didn't have to ask us twice. And so we sent that out to the membership, made sure the membership knew about it, stoked the fire a little bit, gave them some, gave the members examples again with some emphasis on the impact on consumers and competition.

And,she mentioned that they got a lot of responses and where I kind of led her a little bit is I said, was that about 20,000 responses? and I knew what, how many it [00:13:00] was. And, she corrected me and said, no, it was 24,000

responses. Yeah.yeah. I was glad for her to correct me because that told me that one, it wasn't like she just got briefed on this right before she got on the stage.

This is something that is important to her, that she's thinking about. and too, that the 24,000 really stood out. It really made a difference. And then the third thing is that it wasn't only independent pharmacies. I think it vast majority were probably independent pharmacies,

but it was also consumers and physicians that talked about the impact of PBMs.

So, and I think that's important that we broaden our voice. So it's, it's, no one can say, well, it's, independent pharmacies, quote unquote whining.

Mike Koelzer, Host: Right.

Doug Hoey, Pharmacist: It's. The impact of the anti-competitive behavior of PBMs goes way beyond independent pharmacies. and it's now spread to consumers and physicians.

So, ah, for her to [00:14:00] understand that, know that, talk about it. She was great. She was wonderful.

Mike Koelzer, Host: It's very impressive. And when you think about it, it's gotta be that by this point. With her history and smarts. She probably knows the subject more than any of us do, and it probably is a point with these letters where it sort of becomes like a vote. Like the vote was 24,000 to something, she doesn't need to learn from 24,000 people.

It's almost like, it was impressive because of the numbers kind of thing.

Doug Hoey, Pharmacist: Yeah, no, I think that's right because those 24,000 I imagine centered around a handful of themes. So it wasn't like, there were 24,000 original new thoughts, but you know, this handful of themes, let's just say it was, I'm just gonna make up a number, 25 different themes in these 24,000 letters.

But because there were so many, it just hammered home over and over again. And I'd be interested to know [00:15:00] how many were in the PBM column, speaking up for the PBMs that weren't on their payroll. 

I'm guessing it's close to zero.

I think I've got more fingers than would be needed to count those.

That would be voluntarily

Mike Koelzer, Host: That's right. 

Doug Hoey, Pharmacist: guys.

know, one thing just to mention about Lena Conn, or a couple things. One, she's the youngest FTC commissioner in history. She's only 33 years old. so just her intelligence and it sounds like I'm. Kind of a gushing fanboy here. and, I don't mean to, but I mean, you get around smart people and the job I'm in, I get to be around a lot of smart people a lot of the time.

Her just, her intellect was the type that makes the lights flicker. I mean, just brilliant. so super smart. But the thing that stood out the most for me is that she's taken a lot of criticism by questioning how business deals have been [00:16:00] approved and looked at over the last 3, 4, 5 decades. She's taken a lot of heat.

people like the US Chamber of Commerce, they probably have her on a, like a dart board somewhere, a picture of her, US chamber, is all constantly criticizing her big business, constantly criticizing her. so to have the courage to question. , what's been the conventional wisdom for decades? Pretty gutsy. Pretty gutsy.

Doug Hoey, Pharmacist: So have to applaud that.

Mike Koelzer, Host: Does she travel with anybody? Does she have a, I don't think she has a bodyguard per se, but does she have, people or did you notice, a posse around her sort of, 

Doug Hoey, Pharmacist: Yeah, she has her staff, some of her staff members that come with her. So backstage,I talked with her on stage and then backstage, we had a few minutes and yeah, she had, I don't know, three, four people, that were with her other lawyers there was a meeting afterward where she met with,other independent pharmacies in [00:17:00] independent pharmacy owners, farmers, some other.

Groups affected by not just PBMs, but anti-competitive practices. So she had a meeting after this. and so while she was waiting for that meeting to start, we had a chance to talk a little bit, talk a little bit with her people, but as far as I know, she doesn't, travel with the bodyguard. and I hope we as a society don't have to have appointed officials like that, having to travel with the bodyguard because of the extremism

Mike Koelzer, Host: and you hope not, but you think back to the presidents, I mean, up through, I think Lincoln, didn't have a, well, I guess he had people standing outside his room at the theater, but old, history movies, reenactments of these guys just like walking outside, hopping in a car, bodyguard was a relatively new thing in the presidential history.

So hopefully it pretty much stops there.

Doug Hoey, Pharmacist: Yeah, the White House, I mean, it's been a while, [00:18:00] but I, and I, not a historian, but I wanna say it was into the late 18 hundreds that the White House, the President would have like an open house,

Mike Koelzer, Host: Doug, out of the people that you have met in your career, was there a handful of people that you have met that you sort of, uh, know you're in the presence of, power or importance or whatever? do names, come to your mind or are you like, we're on the same boat. We care about our employees and our constituents and all that. you feel about the same about them as you would talking to anybody else.

Doug Hoey, Pharmacist: I've had the honor of meeting three presidents,first Ladies. senators. just because of the good fortune of the, the position I'm in at, in CPA representing small business owners, she was one of the more intimidating just because I'd watched some of her, interviews before and I'm not a lawyer and she is, so if we're talking [00:19:00] pharmacy, I feel pretty,

pretty comfortable.

Doug Hoey, Pharmacist: But,getting into legal terms. So that was a little intimidating. I'll tell you as far as someone else who's just brilliant that I interviewed a couple years ago on stage was, Scott Gotley, who's a former FDA commissioner,

Mike Koelzer, Host: Yes. recently.

Doug Hoey, Pharmacist: yes, he stepped down, I think he was there for two years and he stepped down in like 2019 or

Mike Koelzer, Host: I know the name. I think I saw his picture one time on LinkedIn. That's about all I knew of him.

Doug Hoey, Pharmacist: Yeah, he's on, especially during the height of the pandemic, he was on, morning shows quite a lot

And I always felt like he took a pretty pragmatic view. but he was another, so he's a physician by training and another super, super smart guy.

 you know, the Bushes both HW and w w at least in the short time I spent with him, very short. But he came across like he did when he was out of office. sort of the kind of guy you wouldn't mind having a beer [00:20:00] with. Very homey, very different from how he came across, when he was president.


Doug Hoey, Pharmacist: Very similar, super nice, respectful, just, real patriot. so, yeah, I mean I think to your point, they're still people. They still put their, now, pants on one leg at a time. They have to eat, they have to have a place to live. And, there are some people I think, especially running around Washington, DC that I do worry about some of them losing touch with their constituents, losing touch with the real world.

but, yeah, these folks that we're talking about, they seem pretty.

Mike Koelzer, Host: Have you ever talked to the president about any of this stuff? I don't imagine you did. That's more of just a meeting, like a handshake.

Doug Hoey, Pharmacist: Yeah, well, the ones I'm talking about, they weren't in office at the time. A while ago, quite a while ago, I talked to, she was the first lady at the time, Clinton, Hillary Clinton was First Lady, and that was more of a meet and greet, so it wasn't a one-on-one. so N CPA did have some one-on-one meetings [00:21:00] with president Clinton,back in the day, 30 some years ago.

I think the complexity of issues has changed a lot though in the last 30 years and the number of people around the president have grown and grown. And so I think also the reliance of the president on his people has also grown because of the complexity of the issues.

So I think the target today is more on the key person around the president and congressionally. Cuz so much of what, 30 years ago when Clinton was president, that was before Medicare Part D back then the payment of prescriptions was still mostly commercial with some Medicaid.

This is a totally different world,

and now today over 50% of all the prescriptions are paid for by the government.

Doug Hoey, Pharmacist: , when I first started at ncpa, we sometimes interacted with cms. but today [00:22:00] everything goes, I mean, practically everything goes through cms. I mean, Medicaid, Medicare, it's to the discretion of the secretary of hhs, which is cms.

So a lot of the conversations that could have happened 30 years ago with the president or, are now over at cms and the way you get to CMS is directly, or you talk to members of Congress

who are talking with cms. So it's been a shift in the power center of who oversees prescription drugs and a big mind shift.

And I think a lot of our members have made this shift, but. It's not like it was 30 years ago when 50, 60% of the prescriptions were cash. most of your third parties were commercial. I mean, that's like far away. It's government controlled for over half of the prescriptions now.

And so 

Who you talk to is different.

Mike Koelzer, Host: Talking [00:23:00] about the president's, I'm in Grand Rapids and Jerry Ford was 

from East Grand Rapids, so, a few miles from us here. And, my dad, he was a pharmacist and he was, it might have been even the, um, ncpa, might have been like, uh, something against drugs, you know, say no to drugs.

 That wasn't quite that point yet because that was Reagan. But anyways, my dad's got a picture of him going to Washington and it's some guy I don't know, and then it's Nixon, and then it's my dad, then it's Ford. So it's the four of 'em. And he had it hanging up in our pharmacy. And I remember always in his later years, he would always go up and point at and he'd say, you know, this is after Watergate.

He'd point at it and say, which one of these guys would you not buy a used car from , or something like that. So that's interesting stuff. It brings up the point too that,not only is the FTC for consumers, but the government now is a huge customer. of what's going [00:24:00] on. As you mentioned years ago, the government wasn't really involved and now the government's like, one out of every two patients you follow the money is the government. And so there's more pressure on them, I guess, from the people because we're really the government, we're pressing them and they're the customer of these things.

So there's a lot more responsibility for the ftc, I guess, to get it right.

Doug Hoey, Pharmacist: Yeah, there is. and prescription drugs are a bigger deal today, just from a dollar standpoint, a revenue standpoint. But they're also, I mean, again, it's so 30 years, 40 years, 20 years, whatever point in time, they're more important now than ever because, just think about the outpatient procedures that take place today that never would've happened 10 years ago, let alone 20 years ago.

I mean, it's unbelievable things that are outpatient today. And how do you follow up with an outpatient? Well, you put 'em on prescription drugs that are gonna help that patient. And I mean, I think that's one of the reasons, [00:25:00] technology and, and advances in medical procedures, but also advances in drugs are why we're able to do so many things.

In the outpatient setting. So, yeah, I mean, not only ftc, but again cms, the importance is it's more important than ever. And that's something we say to Mike all the time and I didn't invent it. The first guy I heard say it was a guy named Sal D'Angelo, who was CPA's president from Louisiana, like in 1976 or something like that.

Doug Hoey, Pharmacist: And he said, you gotta get into politics or get outta pharmacy.

 he was saying that I heard him say it 30 years ago, 25 years ago. And it's more true now than it was then.

Doug Hoey, Pharmacist: If folks aren't, and I know, and it sounds, oh, politically active, I don't have time for that. I want to get it, and I want to do that.

You almost don't have time not to do it. You've gotta do it because it's such an oversized influence

on your 

Mike Koelzer, Host: [00:26:00] And you mentioned, outpatient, and I just read last week, the FDA authorized the most expensive drug. It was like 2.4 million for an injection, for some blood disease or something. And it was like a one time treatment and it was gonna save like 23 million or something like that.

But that's not even a savings of an outpatient, that's not a follow up. that took the place of anything hospital related.

Doug Hoey, Pharmacist: Yeah, I mean, we'll think about, the treatments we have for Hep C now,

 It's only been in the last seven or eight years that we can basically cure Hepatitis C. Yeah, it's extraordinary. Yeah, it's expensive, but the cost of not having a liver or a liver transplant is a lot more costly.

than that. So yeah, it's amazing what's being done, but because of the increased use and the increased costs, it's under the microscope even more.

Mike Koelzer, Host: for sure.

and I think also though, it presents opportunities for [00:27:00] us as pharmacists because we're the ones who are the experts in drug therapy. And so how do you use these high fanged, newfangled complex therapies that are expensive and you wanna make sure you get 'em right or who better than 

Doug Hoey, Pharmacist: the pharmacist? 

I think there's opportunities for pharmacists, we're seeing it in primary care. , we saw during the pandemic that the pharmacists are able to step into the gaps in primary care. There's a primary care provider shortage. I think it's a primary care crisis,

um, in this country.

And pharmacists are well equipped to help close some of those gaps in primary care. Cause we're accessible, we're knowledgeable, we're trained, 

we're overtrained for some of the things that were asked to do. One of the interesting things from the pandemic is that we see more and more of our members, independent [00:28:00] pharmacists who are aware of primary care opportunities.

I mean, if you went through pharmacy school in the last 30 plus years, 

you couldn't help not being aware of them.

But what they found is that they were able to make a business model out of it.

And that's been the missing piece. I mean, so, hey, that's great to be taught about pharmaceutical care. A term I never liked because the pharmaceutical's not providing the care the pharmacist is.

But, it's great to be, to know about that. and it's important to be taught about that. But if you can't make a business out of it, if you, if the economics aren't there, then it's not gonna work. and what's happened during the pandemic is that hundreds, maybe thousands of pharmacists were able to make the economics work, whether it was vaccinations or point of care testing or therapies.

some of the monoclonal antibodies, subq infusions, injections. So we're seeing through [00:29:00] cps n that's the Community Pharmacy Enhanced Service Network that we help co-found, more and more. Employers and plans, trying to , help us unlock the potential of pharmacists and, getting them paid, pay them for services that solve a pain point for that employer or for that payer.

Mike Koelzer, Host: talking about. That the FTC maybe has a bigger responsibility because more of the American citizens are using Medicare. So they're a big customer. And then you talked about psn, about the services pharmacists can do, but then you think of another group that's maybe held in higher regard than either of those groups is our veterans. And recently, that sort of, uh, played out in a three way crash here, where the government basically [00:30:00] has taken away the availability for the veterans to use those great services that the pharmacists are doing. and certainly under psn, 

Doug Hoey, Pharmacist: yeah, you're talking, I mean, this is one that really pisses me off. and I think it does a lot for other pharmacy owners. This is a TRICARE situation where Tricare has, through Express Scripts, through their contractor Express Scripts, their multi-billion 

dollar contractor Express scripts that you pay for, and I pay for through tax dollars.

By the way, it has cut out 15,000 pharmacies, almost all independent pharmacies from their network, which means that veterans members of the military can't go to those 15,000 pharmacies. We've been on this for months now and working with members of Congress because, I mentioned earlier, ftc. It's important to highlight the impact on consumers and competition versus to talk about the impact on the pharmacy.

I can tell you with almost 100% [00:31:00] certainty, TRICARE couldn't care less about how an independent pharmacy pharmacist feels about being cut out of a network. They do care, or they should, about members, veterans and members of the military who are reaching out and are concerned about not having access to their pharmacy.

And they should care about members of Congress reaching out, saying, we're concerned for our constituents. We helped. N CPA helped stimulate a letter from over a hundred members of Congress, asking questions about why these 15,000 pharmacies were cut out? What kind of access do patients currently have?

Express Scripts claims through Tricare. That there are 7,000 independent pharmacies that have signed up for this contract. Well, we can't make that math add up. To the best of our knowledge, only one PSAO has signed up and they were offered a different deal to the, again, we're, we don't do con, that's one thing to be clear, [00:32:00] N NCPA does not do contractual negotiations.

We don't own the contracts. We can't contract for pharmacies, PSA's do that. but to our understanding, only one PSAO had signed up and so the math of 7,000 pharmacies just didn't add up. And so part of this congressional inquiry is to help us with the math on the 7,000. Help us with the access, our, cuz one of the things from Tricare Express Scripts was that this would only affect 400,000 patients.

400,000 patients. That's, I think you said you're in Grand Rapid Rapids. I think that's twice the size of the population of

 that city.I'm originally from close to Tulsa. That's the population of that entire city. so those congressional inquiries have gone to tricare. there, this one letter had over a hundred 

Mike Koelzer, Host: Doug,when you said the hundred, was that a hundred Congress people that signed that letter of inquiry 

Doug Hoey, Pharmacist: yeah, so that was a letter led by Buddy Carter, pharmacist from Georgia, and Tom Cotton, Senator Tom Cotton [00:33:00] from Arkansas. So you had a senator and a member from the house that led that letter, and over a hundred members of Congress signed that letter. In addition to that, other members of Congress have also sent their own letter, like Senator Grassley, from Iowa. someone who's interested in rural care and interested in community pharmacies because they take care of so many patients in rural and underserved areas. He sent a letter asking questions and others have as well. So almost a third of the US Congress has sent something to Tricare saying, what the heck?

What's going on? And so far Tricare has not responded to those, which I think that's an interesting response not to respond to,

Doug Hoey, Pharmacist: to, basically Congress.

But what has happened is that Express Scripts has sent [00:34:00] out another, they're recontracting. They're saying, okay, well here's another bite at the Apple.

Mike Koelzer, Host: I think we got one of those a couple days ago, like a fax from them.

December 1st is when they came out. not to date things too much, but. Yes. So you should have gotten one a couple days ago and, you'll, I think, you'll, if it's like the others, you'll have 15 days to decide and you have to individually decide what you want to do. Did they do that as a,cover your ass kind of thing 

Doug Hoey, Pharmacist: totally totally cya. Yeah. Again, we don't contract, so I have to be careful as far as being clear that everyone has to make their own independent decision as far as whether or not they accept the terms or not. the terms we've seen that have been sent to us, based on Naac, which is a government pricing benchmark established by the government.

So looking at that, the terms that were forwarded to us are well below, the cost

of, for pharmacies. but again, pharmacies [00:35:00] will have to make their own choice as to what they want to do, but it's essentially from what we've seen, the exact same, well, in fact, I saw communication from Express Scripts to one of the pharmacies that said it's the same terms and it's non-negotiable.

Mike Koelzer, Host: Hmm. 

Doug Hoey, Pharmacist: how's that for competition?


Doug Hoey, Pharmacist: so we certainly forwarded that onto someone who would be interested in competition. But yeah, it's a sham pr stunt to say, oh, we re-contracted for pharmacies and once again, they didn't accept. Well, it's because you're offering terms that are non-negotiable and are below, below cost if pharmacies don't accept.

so we'll know that in a few.

Mike Koelzer, Host: What's the background of that as far as who they are?

Doug Hoey, Pharmacist: It's, it's military, it's military health coverage.

 So it's for veterans. and it is for active members of the military. So it covers millions of people. I think it's something like nine or 10 million people, and it's not just the prescription [00:36:00] drug benefit, it's also, health, medical side too. And for our pharmacies, what we see is that if you're around a military base, this is really important to you.

If you're not around a military base, then it depends on how many veterans are in or in



Mike Koelzer, Host: Yeah, we had like one or two customers on it. 

Doug Hoey, Pharmacist: Yeah, we, so it's been, when I practice, we had a few, 

who were with the forerunner of, of Tricare. but you know, one interesting thing is independent pharmacies are probably the most, now, one of the most patriotic groups you're gonna find.

I mean, love of. country

runs through not just small towns, but just very patriotic. 

And I'm speaking generically, I'm sure there's some exceptions somewhere, but, just really love our country. red, white, and blue. And the irony of them being the ones that are picked on, cut out from this network is deep.

and [00:37:00] it's, so, there's a personal element too, like, Hey, I'm, I love my country. I love, 

Doug Hoey, Pharmacist: You know, the freedom that the military has helped us become the greatest country in the world and I can't even take care of this patient. I'm not allowed to take care of the patient. There's an outrage that comes from that.

Mike Koelzer, Host: Doug, I ain't no genius, but

if I'm sitting around with Tricare and Es. I'm putting my hand up and saying, Hey, don't exclude any pharmacy. Pay 'em junk. take money from them and make them crawl to you and lick their boots.

But don't exclude them. It's gonna be bad pr. If you're sitting in their seat at this board meeting of, you know, ESI people, why did you exclude independent pharmacies instead of just treating us like crap, like they always do

Doug Hoey, Pharmacist: Well, I think what you're describing is probably akin to the conversation maybe that they had, because again, some of the terms that were sent to us from [00:38:00] members are way below cost.

Mike Koelzer, Host: before they were dumped.

Doug Hoey, Pharmacist: Both the first round and the second round. Cuz the first round and the second round, according to this communication from Express Scripts are exactly the same.

Mike Koelzer, Host: But Doug, they didn't just give bad contracts to people. Didn't they actually kick people off? It wasn't like, we're kicking you off if you don't sign this contract. Wasn't it just like you don't have a choice?

Doug Hoey, Pharmacist: Yeah, it was, they wanted 15,000 fewer pharmacies.

 What they had in their agreement with, the Tricare Express Scripts Agreement shrunk the network. 

Mike Koelzer, Host: Why? Why is that better for them than worse? If I'm running a network, I want more pharmacies and I want to pay 'em dirt, and I look.

Doug Hoey, Pharmacist: Well, they want fewer and apparently to pay dirt at least below cost based on these things that were sent to us. One factor you have to keep in mind that may, that helps drive their logic 

ismail order, 

Mike Koelzer, Host: Oh yes. I see. Now you'd rather have like [00:39:00] very limited, so they go mailer. Gotcha. 

Doug Hoey, Pharmacist: Right? You want as few as possible to drive that patient into mail order.

So that's how your behavior dictates things to, to steer patients into mail order.

Mike Koelzer, Host: I forgot about that.

Doug Hoey, Pharmacist: Yeah. That's a big deal. And there's actually incentives in the Express Scripts TRICARE agreement to drive patients into mail order.

Like, Express Scripts shares in some, they get a, not literally a bonus, but they get more money if they're able to drive a patient into mail order. Maybe just be on brand products. I can't remember, but yeah. So the incentives around mail order are driving a lot of their behavior.

You know, they're making a ton of money on that when they can't even incentivize mail order without kicking people out. if you. Pizza places in town, some you go sit down there, some you take out the pizza, some get delivery and this and that. And it's like they can price it accordingly [00:40:00] for who they're trying to attract and so on.

Mike Koelzer, Host: But you know, that mail order must be a tough sell. If instead of making mail order, I don't like this, but instead of making mail order free and the independent pharmacy, $30 copay or something like that, they're making a crapload of money when they can't play that game and they actually have to basically close the doors of that place.

So to force 'em to mail order

Doug Hoey, Pharmacist: Yeah. mail order's been around for a long time. I mean, it's been around for many years, but it's been pushed. You remember Medco really pushing it back in the early nineties and, but yet consumers, unless they're coerced, most consumers don't want it. I mean, like, like 90 plus percent when it's a level playing field and they're not financially coerced or otherwise coerced.

They don't want mail order for their drugs. Yeah, maybe they want mail order for their Amazon packages, but they don't want it for their drugs. and why should they have to,but they can't even incentivize it, it's like it was [00:41:00] decent, they would at least incentivize it, they incentivize it just by removing the competition. That's kind of the mo of the PBMs, is that if we can't compete and win, then we'll have one-sided contracts or we'll try to buy the competition or try to restrict competition. This kind of goes full circle to where we started with the FTC and where we feel like the FTC has not been active when they should have been.

 I'm sure they would not call it an awakening, but this reawakening, let's call it a reawakening, has been an amazing thing to see. And we hope that it continues and that there's some,some results that come from it, some outcomes that come from their interest.

because being interested is one thing. And that's, again, very refreshing and we're glad to see. that, but where the rubber hits the road will be. Are there policy changes? Are there, what's the [00:42:00] outcome that is going to help competition and consumers, in the pharmacy space? That's where we need help.

We need help to have a level playing field. Once we have a level playing field. Independent pharmacies don't need any help. We just need help to get to a level playing field, and then we can compete all day long and more than hold our own.

Mike Koelzer, Host: You throw in the government thing and it just makes me think of all of the $10,000 screws for the fighter jet, and the $50,000 toilet seat, you've heard about all those in the past. Once you get those different contracts and things like that, it's like you might have all these laws, but then there's the sneakiness going on and all that kind of stuff. One of my employees at the pharmacy said, are these state laws, are they gonna change stuff? Are they gonna level this out? And it's gonna be all good? It's like, no, probably not, but I think it's gonna simplify things if you take away the rebates and do this and get out the dir and make them do it at the register and all that kind of stuff, it [00:43:00] might not change it overnight, but it takes away the, opaqueness that all these games, the Shell and the P games, it allows the,legislatures to understand it better then when they understand it, they can start saying, you're not.

Pull that over my eyes just by having some PBM lobbyist or something like that. Say, oh, don't listen to them, you know, don't listen to that. it, it simplifies it. But it's kind of like peeling back the onion layers.

Doug Hoey, Pharmacist: Yeah, no, you're talking about pharmacy dir reform. They are, Mike,and the way you described it to your employee is right. it's not the panacea where all of a sudden we're gonna get paid better. In fact, we'll probably get paid worse at the point of sale. there will be transparency and predictability.

And one of the big points you just mentioned is that the ability to communicate it, to talk about it to people that should care it, it will change that, it also should change even how, independent pharmacy owners who [00:44:00] are, you know, it's so take it or leave it, but are accepting the terms under duress.

It gives them some transparency to say, I can't take this contract, or I can, whatever that is. But it gives them more insight into what their, either their PSA has signed them up for, or what they've signed up for. Because they can predict so many times, there may be some algorithms that help them.

No, but it's when you're right there at the counter, you push the button, you get the adjudication, you see the screen, I made money, I didn't make money. And it's at that moment that you're most engaged. In, in, in the transaction and most aware, and they're gonna have the ability, they should have the ability starting in 2024 to be able to have that insight and awareness

Mike Koelzer, Host: Yes. 

Doug Hoey, Pharmacist: every business owner should have.

Mike Koelzer, Host: And then when you invited the local state guy or something to your store, you can say, look, this is what's happening, versus come back in seven months and let's go through stacks of paper and we'll see if we can find a negative [00:45:00] draw. But it just says like a batch or something.

It doesn't say what it's 


Doug Hoey, Pharmacist: Yeah. It takes a forensic accountant with an actuarial on staff to try to sort, all the, post DIR out now. So it's not perfect. We're still trying to get some more changes to it, but it's a catalyst for change. We, I knew this though, that the status quo of not any, you know, making no change.

That was a recipe for doom. And so that's one of the reasons why our organization, we were the, it was lonely out there. No one could spell DIR back in

2016 when we started working on this and why we kept at it and kept at it and hey, we're not thrilled with the results, but we're pleased that there are, that there is some change.

We want more change though. We want it to be even, improved. 

Mike Koelzer, Host: You take any movement, especially ones that have gone through Washington with at least figurative marches and so on, I can't think of one movement that you [00:46:00] can point to something and say that's where the change happened. You don't know who's gonna break through the line, but until you have like a thousand arrows being shot, one's gonna maybe hit somebody, but you have to have a thousand of them going and you don't know which one's gonna work,

Doug Hoey, Pharmacist: The 24,000 comments. We're constantly asking people to contact your member of Congress, send comments, that kind of thing. And if I'm getting asked to do that all the time, at some point it's gonna become white noise to me.

And so I'm gonna be like, oh yeah, I'm supposed, and I con I've contacted him two or three, I've been doing this for 20 years. I've contacted him every year, but haven't seen a change. I mean, at some point I'm gonna get cynical with it. so I wanna point out that those 24,000 comments that the chair, she remembered that and that helped

change her mind.

So just for listeners who may have, who have been active and or may have been a little bit, uninspired to continue it, it does [00:47:00] work. it, it can work. So it's like you said, it's a thousand arrows. So, it may not be that one comment, but it's that one comment plus the other thousands that are additive


Doug Hoey, Pharmacist: That finally, breaks the dam.

Mike Koelzer, Host: Doug. I realize Covid wasn't really great for me because now I don't like to go to funeral homes and bigger crowds and stuff like that. Maybe I just don't like people. But last we spoke, you were excited about getting together finally, live for the, n CPA Annual.

Was it everything you wanted it to be? Did the warm feelings come back and it felt good to be in that crowd again?

Doug Hoey, Pharmacist: It, it did. so this was our second live one. we were

live in. Yeah, in 20, we were the first National Pharmacy meeting to come back together. And that was an awesome feeling. this one in Kansas City, it was even better. not only because we were able to be together, but just the energy from it.

So the Lena Con and then there's a [00:48:00] popular guy on, on Twitter and Instagram. He goes by Dr. Glock, Ecklin 

Mike Koelzer, Host: Yes, yes. 

Doug Hoey, Pharmacist: and, will Flannery's his real name. He's an ophthalmologist 

from, the

Portland area.he's awesome. these two minute videos. He did one on PBMs, this summer. so he was our other, one of our other speakers, and he was great.

There's just a lot of energy from the members. A lot of, hey, there's tons of challenges. No one's Pollyanna about the horrible payment, the horrible treatment from the PBMs. . But on the other hand, there's also a lot of optimism about, look, I was able to make this huge difference in my community through the pandemic.

I was paid fairly some of the time for some of those services, for some of the immunizations and the,the vision I think people have added to their visions for their business and for their communities through what happened with the pandemic. Because now they've got people in their communities, they've got payers coming to them saying, Hey, you helped me during the pandemic.[00:49:00] 

Doug Hoey, Pharmacist: Can you help me with this problem? And that's one of the most exciting things about pharmacy and especially independent pharmacy, is the problem solving.

And when you know, you get a group of independent pharmacy owners and you unshackle them from all the bureaucratic red tape and PBM oversight. That, bind them and just let them loose, and it is awe inspiring.

Mike Koelzer, Host: Yes.

Doug Hoey, Pharmacist: So there was a lot of energy around the programs that we had, not only the speakers, but the educational programs. Next October will be in Orlando. But, if I could have the same energy the electricity that people had in the audience in Orlando that we had in Kansas City, I would, I'd call it a win.

I'd call 

It was a big win. 

Mike Koelzer, Host: Doug, golly, great having you on. Thanks for what you're doing for the profession. Honor talking to you again and keep it going.

Doug Hoey, Pharmacist: Yeah, Mike, thanks for having us. And I always say that NCP is the [00:50:00] megaphone. So, yeah, we've got a voice here, but it's the voice of the independent pharmacist. We just happen to use the megaphone to make that voice louder. But that's only given to us through our members' voices.

So I just am grateful for the chance to be on the podcast today, a chance to reach out to some of our members and those who aren't members. Become a member. Yeah. Join in cpa. But, thanks for the time today. I've enjoyed it.

 likewise, Doug. We'll talk to you soon.

Doug Hoey, Pharmacist: All right. Take care. 

Mike Koelzer, Host: bye.