How PSAOs and Wholesalers Undermine Pharmacies | Brett Louderback, PharmD, OpenBook

This transcript was generated automatically. Its accuracy may vary.

[00:01:09] Mike Koelzer. Host: Brett, for those that haven't come across you online, introduce yourself and tell our listeners what we're talking about today.

[00:01:18] Brett Louderback: My name's Brett Louderback. I'm a pharmacist in Nebraska, bought my first store that summer and became an independent pharmacy owner to serve my community. On my first trip out to an Amerisource Bergen trade show, I got some advice from a car dealer of all people, one of the Midwest larger car dealers with no formal business training in pharmacy school like many of us.

I asked for some advice and he said, young man, you don't make money at the sale. You make it at the purchase, which I think is ever so more true today than it ever has been in pharmacy.. So in the course of developing different protocols and business tactics here at a small town Nebraska pharmacy [00:02:00] we just decided to form a consulting group that helps identify new business opportunities in your niche area and also the core savings as well.

[00:02:10] Mike Koelzer. Host: All right, Brett. Now you talked about your car salesman, friend,

 On the sell side. I think you hate the opaque PBMs like I do the big three, let's say. But your guy was talking about the buying side. Do you dislike the wholesalers and the PS aos, the big ones like I do don't think I put them in the same category as the PBMs, but I'm not a fan of the big wholesalers or their PS aos,

[00:02:43] Brett Louderback: They're all one and the same.

[00:02:47] Mike Koelzer. Host: with the PBMs too.

[00:02:50] Brett Louderback: Well, yeah, I would imagine. I mean, we don't wanna say the word price fixing, but we certainly know it's a very intelligent business. 

[00:02:59] Mike Koelzer. Host: to [00:03:00] have people like us sacrifice our good time

and efforts their yanking all our profits out putting

us in the hole.

[00:03:09] Brett Louderback: So who's the scapegoat? We're left holding the bag on everything from accountability to financial risk, to risk of unwarranted side effects and such and aberrant care plans. Who's the fool in the business? So I think we're looking at 'em.

[00:03:25] Mike Koelzer. Host: Personally, I get embarrassed when

People if I ever told someone our business plan, for lack of a better word,

I get embarrassed. Then I'm doing the damn thing and I look at the bottom line and I'm like, alright, well the bottom line is still there. So it's like throwing out bad salad or whatever.

At the end of the day, in a restaurant, I mean, I'm looking at the bottom line, but you go down to individual pieces of it and individual plans of it, and it's rather embarrassing and it makes me feel uh, dirty, I guess, that I'm even part of this and part of their [00:04:00] pawns in this

[00:04:01] Brett Louderback: Well, yeah. What other business in the world do you allow your buy side your wholesaler to negotiate your sell side, 

your PSAO. 

[00:04:09] Mike Koelzer. Host: I Don't get that.

[00:04:09] Brett Louderback: How did we get sucked into this notion that a simple faxed addendum or emailed addendum changes our pay rates and scales.

[00:04:16] Mike Koelzer. Host: It does, doesn't it? 

[00:04:17] Brett Louderback: Community Care Rx way back when. I mean, those guys are the ones that started this, in my opinion. But,

[00:04:22] Mike Koelzer. Host: You're

in a contract and they simply can send a fax, and then that changes your contract.

[00:04:28] Brett Louderback: yeah. And then it's FOIA exempt

 Who knew that a pharmacy contract would have FOIA exemption. Why?

[00:04:35] Mike Koelzer. Host: You mean by that is that you can't show it to people,

[00:04:38] Brett Louderback: of Information Act. Yes, of course. 

 It has the FOIA exemption stamp up at the top of it.

First and foremost, we're not supposed to share it. Second of all is if they would go and ask for the copy of the contract. I mean, it should be public record, right? It's for the fiduciary responsibility of the government to disclose how A-A-P-B-M is managing our benefits.

That our tax dollars fund, [00:05:00] no, they're FOIA exempt.

[00:05:02] Mike Koelzer. Host: Yeah, once you get the government and things in their tax dollars, that doesn't seem right.

[00:05:06] Brett Louderback: No.

[00:05:07] Mike Koelzer. Host: Alright, Brett, so I don't have a wholesaler, I'm not with one of the big threes. I don't care any brand names and therefore I don't have any PS aos I think the big three and the big PS aos are junkie.

That makes no sense to me why my mind. The wholesaler couldn't care less what you're making as long as you're in business and they can still send box to your store and you're still paying for them, they're gonna make that rate go as low as they can order to have more business for them. 

[00:05:44] Brett Louderback: Oh boy. We're getting into the core of open book. So typically when we're looking at a wholesale contract, there's four pillars that we base our foundation on one's distribution. Two is chargeback data. Three is days [00:06:00] outstanding and four sales and marketing fees. And us as independent pharmacists, we haven't been able to get our group together to go and capture some of those.

So distribution you can pretty much count. It's anywhere from 4.8 to 5.2% is the margin that the wholesalers most likely tapping the manufacturer. 4.8 to 5.2% in our opinion is going toward days outstanding. So that's cashflow management. Which we all know how that goes. We're, you know, either paying daily or once every two weeks.

But how long is the wholesaler holding onto the money for the true up on the chargeback data from the manufacturer? Six to nine months.

 We didn't cover sales and marketing, so there's another 4.8 to 5.2% with the manufacturers being charged by the wholesaler for sales and marketing fee.

I don't remember the last time I had anybody come in and do any sales and marketing in my pharmacy or to my clientele via a wholesaler. let's see, and what was the third chargeback data, so what's class of trade? Where was it bought? Where was it sold? [00:07:00] Which is the majority of the funny math that happens, 

let's, let's call it spade. A spade class of trade is utter chaos. It's the reason three 40 b's and the peril it's in. But no one wants to address that ugly big elephant in the room called class of trade.

[00:07:14] Mike Koelzer. Host: Brett, slow this down for me. So

these four things you mentioned, those are areas where the wholesaler is making money even though they're crying that they don't have the margin. You're saying that's where they get their margin from?

[00:07:32] Brett Louderback: Absolutely. We bring these reps into our stores, and they're our best friends. They take us to trade shows, buy your family, take us to ride, whatever, Disneyland. But , When we're talking pharmacy contracting distribution, we lose money at Wack minus five. Yeah. They probably are starting to on brand name specialty, 

[00:07:53] Mike Koelzer. Host: the wholesalers. Yeah.

[00:07:54] Brett Louderback: yeah. But they neglect to mention the other taxes that they're putting on the [00:08:00] manufacturers. And what we need is the manufacturers to come into the room and start pointing some fingers, but.

I doubt it not gonna happen, because we're not the total of the business. We're the small segment being the independence.

And we think that pharmacy is, in

the retail pharmacy setting is where the majority of the transactions go on, but from what I understand, some of the experts that I have access to, they're indicating that, it's maybe 50 fifty's going on and, you know, prescription bottle rollout, the other 50 percent's going on in the hospital and doctor setting.

[00:08:32] Brett Louderback: I mean, it really brings these interesting dynamics into what is the total net that's coming, you know, into the wholesalers coffers. But more importantly, how do we as independent pharmacists, claw whatever monies we can back and start deploying any kind of accountability that's, that's possible.

[00:08:50] Mike Koelzer. Host: SO in my mind the PBMs, I've put them in the same category as some of the uh, taxes and, [00:09:00] cable TV companies and things like that. Kind of given up on that side. Is is that the point where people have to badmouth the wholesalers and the PSA's and things like that? Or is there room still to do something that is, I don't know, cordial.

[00:09:16] Brett Louderback: My gut tells me it's all coming down, but

[00:09:19] Mike Koelzer. Host: It's coming down from

[00:09:20] Brett Louderback: look at the closures. 

[00:09:22] Mike Koelzer. Host: The closures

[00:09:23] Brett Louderback: The business has to collapse and there has to be a phoenix that raises that it's gonna continue to service the American public

[00:09:29] Mike Koelzer. Host: people maybe don't care what we think is independent owners, but when it hits the public, finally, then they can try to start pointing fingers at some of the wholesalers. . 

[00:09:40] Brett Louderback: I think it's just also intertwined. I don't know how you can't pull a card without any of it. Like, it all has to hurt.

I I have folks get ahold of me, like, how are we gonna sustain viability to access to care in the state of Nebraska? , the answer that I get is there has to be these.

relationships established [00:10:00] with the critical care access hospitals across rural Nebraska. And that's how through the three 40 B network. That's not an option. 

[00:10:07] Mike Koelzer. Host: Basically you had the PBMs doing this, and now the manufacturers might doing things to make up for that and the wholesalers get in there. So ultimately now it's gonna hurt the care the public gets because independent pharmacies or anybody that we think is doing the proper level of care is no longer gonna be around Brett, from the little conversation we're having here, you have it in your desire. To help people. When these deserts come, people are not getting serviced and it pisses you off.

[00:10:49] Brett Louderback: Yeah. So the future is, we see it for Nebraska. I don't know. I hope we can stand up and keep the fight and keep places open. Otherwise, [00:11:00] we'll have these central field facilities and we'll roll things out through these discount retail outlets that are cropping up in every small community, and even in the urban settings, which are glorified C stores.

[00:11:12] Mike Koelzer. Host: What's cstore mean?

[00:11:13] Brett Louderback: Oh uh, convenience store like seven 11. 

[00:11:17] Mike Koelzer. Host: But they're not selling pharmacy drugs.

[00:11:19] Brett Louderback: Really? 

[00:11:21] Mike Koelzer. Host: I mean, they're

not selling prescription drugs

[00:11:24] Brett Louderback: not yet. They aren't in the south. They brought on some leadership that's had some core background in training at Cardinal, for instance. So don't tell me it's not there. 

[00:11:34] Mike Koelzer. Host: BUt they would have every right to put a pharmacy in. Are they maybe doing like a remote fill and they've just got a machine there or something like that? That's not just pharmacy competition you're talking about? 

[00:11:45] Brett Louderback: well, yeah, I mean, Mike, if you and I are having a, a cup of coffee talking this over. I mean, what's the greatest fear? Walmart. Back in the day,

eighties and nineties, we all heard grandma and grandpa complaining about it. It's gonna kill small town America. Well, the nail on the coffin's Dollar General [00:12:00] they've got the distribution network.

There's a store every 10 miles. You partner up with one of the big three wholesalers, which we know the other one that's in Tennessee now with its central fill facility. It makes sense for them to do that.

[00:12:14] Mike Koelzer. Host: See, my problem where I live, Brett, this doesn't have an impact on me mentally because I've got, 30 pharmacies within 10 miles and I've got, a Dollar General and Dollar Tree and I've got something on every corner. I mean, I'm in

the city. But what you're saying is some of these stores that are maybe out a little bit, they're not big enough to maybe have a Walmart come in, but they are big enough to have a Dollar General come in and be that space.

[00:12:40] Brett Louderback: . Yeah. I mean, let's talk about those 30, 40 stores that are around you. what's the zip code? What's the number of stores? And today, what's gonna be the number of stores in April when we have proactive? In retroactive DIR fees. There's been some horrible rumors [00:13:00] going around in the underworld of wholesale on closure rates.

God forbid, 

[00:13:07] Mike Koelzer. Host: That when the first of the year

comes around, a lot more are gonna be closing.

[00:13:11] Brett Louderback: yeah, we, you gotta have the financial wherewithal to withstand, your prior fee plus the proactive fee that's on the front end. You know, There's Ben Jolly our expert on that, well , he can coach about anybody through it. He is pretty good at that

[00:13:25] Mike Koelzer. Host: I gotta get Ben back on here. He's been on four times. 

[00:13:27] Brett Louderback: Oh, no way. 

[00:13:29] Mike Koelzer. Host: Alright, Brett let me get this straight. You seem like you've got to let something out of you here. So let me, think of a scenario here. Let's say that you, and you can pick what it is. Let's say you got five minutes to be on some morning news show and you can say whatever the hell you want.

Or you get five minutes in front of Congress, or you get five minutes in front of, CEOs of America, or which one of those are you gonna pick and what are you [00:14:00] gonna say?

[00:14:02] Brett Louderback: Senator Grassley, why did you opt to go with the PBMs rather than with class of trade and VA rollout with Medicare Part D in 2007?

that's the way it rolled out, they were contemplating VA class of trade for Medicare Part D. Which meant costs were capped cost plus. And here's the genie in the bottle on that I think was Grassley's claim, was that if we did that, if we gave Medicare Part D VA price, the cash customer.

So what our self-insured our folks that you know, not Medicare, Medicaid, not va, are they're, they weren't gonna see cost escalation, man. Boy did he tell the future because it sure happened either way. And now look at us. So my other question would be from 2006 to 2016 I think it's Brian Tutes out of Florida brought this to my attention.

[00:15:00] Insulin went up 700%. You own a store, your margin go up 700%. Mine sure didn't. . So now I'm a negative margin.

[00:15:10] Mike Koelzer. Host: I don't sell any insulin.

[00:15:11] Brett Louderback: Yeah. Neither do I send 'em to Walmart to buy their rely on stuff. Better yet go to Canada or Mexico go to a three 40 B. But

even that doesn't work anymore. so where is the 700% markup? And show me where that happened each year and show me the math where it all went.

'cause from what I understand, Novo and Lily didn't make all that money. from what I've been explained is if you and I own a product maybe we're capped at inflation. That means there's 675 markup in, in 10 years that went somewhere else. 

[00:15:42] Mike Koelzer. Host: And it either Went to the PBMs or it went back in some of the politicians' pockets.

[00:15:46] Brett Louderback: well, I think it's a silent tax to pay for care. It goes out through social programs, funds, social programs as well. Yeah. A lot of it goes to PBMs. A lot of it goes to the wholesalers, the GPOs. But we've gotta fund three 40 B, we've gotta [00:16:00] fund, indigent care, which, that's fine, but if I'm my big employer that's down the street from me here in Madison ask me for my philanthropy.

Don't take it from me and by God, don't put me as the pharmacy in the middle of a, as the fall guy.

[00:16:13] Mike Koelzer. Host: so you're saying that profit goes to people? We expect it to go to, we don't think it's right, but it does go there. But some of that other stuff goes in the pocket, not necessarily of the politicians, but might go to one of their pet causes. 

[00:16:29] Brett Louderback: Yeah, I mean imagine us, you and I being Novo. Lets just, let's be fun, let's be Novo. 'cause then now we're helping people lose weight and

And we're operating a program and this class of trade gets reported on one prescription claim. A gentleman goes to a three 40 B facility, right to seek care, uses his wife's insurance. He's a retired vet. So what can happen there? Three 40 B claim. So we give the discount on the acquisition [00:17:00] of the drug pharmacy bills at retail, class of trade, the most expensive in the world.

PBM beats 'em up and chases down a rebate should be disqualified because it's three 40 B, but it squeaks through. So we gave a discount, we gave a rebate, and then the VA comes back and they say no, wait. That was for one of our soldiers. We, We want our rebate too. We, the manufacturer just got triple depth.

There's our problem. Class Class of trade. Chargeback data. So I believe this gets cleaner with blockchain acumen and safe chain drug delivery because in my opinion it's more than just buy-side and tracking from manufacturer to the pharmacy.

If we can extend it into the dispensing right, which we will the math should work itself out and the transparency of, of who the payer is and who wrote the script so that. We're not gonna put the manufacturer in peril. 

[00:17:56] Mike Koelzer. Host: Tracking I thought that was more of a physical tracking and you don't [00:18:00] have to go physically through a PBM building to have their hands in it. So how does tracking it help to know who's taking the profit off of it? 

[00:18:10] Brett Louderback: It's just at attaining a data metric, class of trade. What class of trade was the doctor that wrote for that drug? Is he three 40 b? Is he va? What's the origination site of the prescription and the care 'cause that's where a manufacturer can be tapped for a discount, correct. 

And then what class of trade was it sold in? Was it a retail pharmacy? Closed door pharmacy? Long-term care hospital philanthropic pharmacy. Gotta love those guys. VA three 40 B. So then on that cell side, it'll qualify or disqualify the rebate to the PDM tells us who the plan sponsor is.

[00:18:48] Mike Koelzer. Host: Brett, you're talking more than I understand, because here's as deep as I get. I have a bottle of something I sell, [00:19:00] then

[00:19:01] Brett Louderback: Yep.

[00:19:02] Mike Koelzer. Host: somebody says to me, Hey, I used to work at such and such hospital. You wouldn't believe what they pay for this. It's dollars on the $500

or whatever it is, and I'm like, oh, that sucks.

[00:19:16] Brett Louderback: right.

[00:19:17] Mike Koelzer. Host: So it sounds like that unbalance is what people are using to dip into these things with those kind of spreads by changing the origination and so on of what these prescriptions are.

[00:19:31] Brett Louderback: Yeah. So that, that, that gets into the, the pillars of the, the wholesale manufacturer negotiation is they use that class of trade to manipulate cost, sometimes we see things we shouldn't, right. As pharmacy owners and we see, oh, let's just throw one out as an example.

Not saying this has happened. But um, Ozempic at 300 bucks, $320 what did it come into the port at from across the pond? [00:20:00] Three 20. All right. it hits my buy side, we're upwards of almost 900 and some close to a thousand bucks. So Why all that gravy? And then if it only goes to a hospital or to a three 40 B program, what?

360 3 80? What is it? So what's with the discrepancy? Where's the index on that? And the public isn't aware of it, and the pharmacy owners are not aware of it. Like, we can't expect the public to know if we don't even know ourselves. 

[00:20:29] Mike Koelzer. Host: Spread that out for me. All right, so it comes over the pond at 300 bucks, and then it's 900 to the pharmacy. So where's that 600 going? 

[00:20:37] Brett Louderback: when, well, first, who's describing it? who, Who monitors it? Well, first we provide our DEA retail closed door. And then the sublay of that is our MPI and N-C-P-D-P filings. What class of trade are we in? So MPI, taxonomy, code, retail, closed door, whatnot.

So then the wholesalers, that's where they get to get crafty 

[00:20:58] Mike Koelzer. Host: Oh, that's where they make [00:21:00] that big profit because they buy it as it's gonna be, I'm just gonna call it hospital ish. And they sell it like it's retail ish. 

[00:21:07] Brett Louderback: And that's where we get our class of trade shifts. You never want a class trade shift. You do not want to go from a lower access cost. Class of trade to a retail class of trade. So you would never take a closed door or a hospital or a three 40 b drug from someone and bring it into your retail setting and claim it as your own in retail.

Why is that? 'cause that all impacts the downstream chargeback data on what gets rebated back and tallied for best price for the government,

[00:21:35] Mike Koelzer. Host: It throws off the true purchase price. 

[00:21:38] Brett Louderback: And then you see the exit of manufacturers from the three 40 B program, for instance, because they're being tapped too many times. They're not profitable. 

[00:21:49] Mike Koelzer. Host: You're very well versed in this Brett. So what does this hurt? Who does it hurt?

[00:21:53] Brett Louderback: Well, I think it hurts the key stakeholders, right? So it's us. We're the boots on the ground performing the pharmaceutical care, trying to [00:22:00] triage these patients with our care teams. The plan sponsors and that's a whole nother rabbit hole, is that fiduciary responsibility starts to get diced out more and more each day.

The patient that's obvious. And then the biggest plan sponsor in the world, which is who? Medicare. So state and federal agencies. But I also throw the manufacturers in this bucket. I think that they get abused but you're not gonna hear very many pharmacists talk that way, I don't think. 

[00:22:25] Mike Koelzer. Host: Yeah. They probably get abused because the PBMs,a lot of times there's nowhere else for them to go. Once the PBMs have their arm behind their back. 

[00:22:33] Brett Louderback: Can you imagine sitting in front of a Senate Finance hearing committee on drug cost and you have to sit there and take it on the chin knowing that we don't set this price

[00:22:45] Mike Koelzer. Host: All right. So Brett, your five minutes I gave you, you spent about 15 seconds asking Grassley something. Now you got like four minutes on your clock. What are you gonna say as you're sitting there at that long table in [00:23:00] front of Congress? what kind of stuff are you talking about to them in the vernacular that they would understand?

[00:23:11] Brett Louderback: That they would understand. I have these conversations every day. 

What's relationship worth? What's accountability worth? What's value-based care mean to you? , what's cost savings mean? What's enhanced access to care mean? wHat do moral and ethical considerations mean in the equation of how we reimburse pharmacists for the care we roll out every day?

I don't have the answer. Bike 

[00:23:48] Mike Koelzer. Host: I had that conversation with some on my team because I was out of the pharmacy for a while before Covid. I came in right when Covid was picking up, and I got a renewed [00:24:00] sense of what we do for our patients. which was almost more depressing. It's one thing, not getting paid for something you don't think you're needed for, but when you're not getting paid for something you're needed for. And I think about the stuff we do for our patients, and I don't know where the hell else they would survive except with us. And the problem with pharmacists too is that we give the same service whether we're making. Minus a dollar or plus a hundred dollars, it's the same service. And so what happens is, you don't see decrease in service. You see cliffs, you see this portion in my city getting served . for whatever reason, our pharmacy's not there, and our thousands of customers fall off a cliff so quickly that there's nobody [00:25:00] there to catch them. They just splatt on the ground. And your point Brett, How are those people gonna get caught when that cliff comes for us, if it does, 

[00:25:15] Brett Louderback: I got some great advice during Covid. I worked with one of the nations, well I would sayworld's best infectious disease experts. When it comes to covid, graduated from Harvard and MIT at the same time in the seventies, top of his class, trained at NIH left due to moral and ethical conflict and there would be nights where it was just, Lou, what are we gonna do?

Like, there's not enough of us. Nope. Brett, one at a time. So I. One at a time. Mike . We like to practice the Luke 10 style of medicine here, [00:26:00] I guess. And that was the purpose of my Sam in 2009. my Sam being short for my Samaritan, where

 Two may have passed somebody by, but we're here to pick you up, care for you, put you on our donkey, and take you back to the end pay and come back and check on you and maybe even pay again.

And sometimes, our hearts get ahead of our heads and you gotta have margin have mission. So if I had described that scenario to senator, to congress,

 A Good Samaritan story, nobody tells you about how that Samaritan. Was funded. So my question for the Senator Congress would be, how are you gonna fund that?

Because that's what we're here to do and that's what pharmacists do every day, whether you're, Christian Jewish, Muslim, most of us pharmacists have big caring hearts and we need funding or you're gonna lose us. And so good luck with your other two because we know what they did. They were serving themselves just like many are today in healthcare.

[00:27:00] If you lose those of us that care,

I don't know.

[00:27:04] Mike Koelzer. Host: That's a really cool analogy because two don't care. But the third one seemed to have cared. But once those funds dry up then nobody gets served.

All right, Brett, so back on class of trade. 

[00:27:22] Brett Louderback: I firmly believe class of trade is taxation without representation, like it's the biggest tax on the American people that we have no idea that is even going on.

[00:27:31] Mike Koelzer. Host: All right, let me back this up. So the tax is that the pharmacist, let's use your $300, $900 scenario. Again the tax is a $600 tax that somebody, either pharmacists or companies or whoever. Would pay even close to that. They're getting taxed by the wholesalers 

[00:27:58] Brett Louderback: yeah, the retail class of trade is [00:28:00] your tax.

[00:28:01] Mike Koelzer. Host: people buying at retail. They're getting taxed

[00:28:04] Brett Louderback: Amen. Yeah. So an international pricing index would be nice. . We've learned some things. let's take Eliquis for instance. It's been a while since I looked at a bottle, maybe 

[00:28:15] Mike Koelzer. Host: 500

[00:28:16] Brett Louderback: a WP of like, let's call it five 50.

Yeah.

Five 50, whatever it is. Why can we buy Eliquis for 12 bucks in Turkey? Why can we buy Eliquis for $54 in Germany? Why can we buy it for, $18 in Romania? And we can track and trace that all the way back to the same lot out of the manufacturing facility in France.

Why is the question like, why.

[00:28:39] Mike Koelzer. Host: Why do they sell it for so less to other people? Is it supply and demand? And if you charge more than that the, citizen couldn't afford it. Or why do they charge so little compared to the us?

I mean, I know we're the suckers and the tax and all that kind of stuff, but it seems like they could take more out of some [00:29:00] countries.

[00:29:01] Brett Louderback: I think at the end of the day, there's the misnomer, right? I mean, if we were to talk to Novo or, or Lily or one of these companies what, what do they need at the end of the day on a dead net box of insulin? And I think if we talk to the folks at the Mats Act and Insulin Matters and that spearheaded that on Nebraska, 

they're happy with 40 bucks, 50 bucks for a box of insulin. Well. Okay. I'm cool with that. I know you are. So there's a, we've got our first iteration of cost. Now what's next on plus? So the level of care. What do you need me as a pharmacist to go and gather you Mr. Manufacturer, Ms manufacturer, for further drug development and monitoring parameters that need to go on behind that.

What are you willing to pay me to go and facilitate that action and be your touchpoint, your engagement point on behalf of that patient? I really wanna start diving down into those conversations. So, all know the rigors of black box drugs in the data collection that needs to go on before we can deploy [00:30:00] those medications.

[00:30:00] Mike Koelzer. Host: I think the messy thing about it all, Brett here's where it's so screwy, is you talk about what Groups need. What? And you put pharmacists in the mix. And I know I talked earlier about the whole bottom line, but you put pharmacists in the mix and it's like, alright, the manufacturer needs this much so and so needs this much pharmacy, it's gonna be minus 50 bucks.

It's like, what do you mean minus you mean like they only need 50? It's like, no, they'll lose 50 bucks on it. And it's like, well that's not, let's start over here. We don't know what the, what does that mean? Alright let's start over. Manufacturer needs this, they need this. What does the pharmacy need? Well, nothing. The pharmacy's gonna pay you to bring this product into their store. It's. Ludicrous. I mean, it's beyond ludicrous. You can't even have the conversation.

[00:30:50] Brett Louderback: Yeah. Are we chasing our tail? telling us they don't need us.

[00:30:56] Mike Koelzer. Host: only do they not need us, they don't [00:31:00] want us because every time that a pharmacy's filling something, it's not going to their mail order place.

[00:31:08] Brett Louderback: Exactly.

[00:31:09] Mike Koelzer. Host: I, so Brett, you still got about four minutes left. Where else are you gonna go with this? Who else are you talking to? I cAn get you into the President's office. I can get you into CEO's office. I can get you wherever you wanna go. You got four minutes left.

[00:31:28] Brett Louderback: Do you want to save 80%? If I facilitate adherence and compliance for you, that's bonafide adherence and compliance.

80% of healthcare costs. Do you wanna shift 22 to 24% of your GDP from the non-profit hospital space into a space where we can reallocate those dollars back to the consumer and put it back in a taxable revenue? Now we're talking

[00:31:55] Mike Koelzer. Host: And I think I'm following you. Who's the vehicle for that community [00:32:00] Pharmacist?

[00:32:00] Brett Louderback: absolutely bonafide adherence and compliance. I'm not talking fill rates 'cause any PBM can tout their adherence and compliance rates. We all know that ugly kid in the room on that one where you see the pictures of the stacked up boxes in someone's closet of meds that have been sent to 'em.

We're talking,

we're monitoring patients. We're making sure they're taking their medications and our outcome show it in the monitoring parameters.

[00:32:27] Mike Koelzer. Host: I think part of that problem is that starting with your used car guy, Brett, was he a friend of yours or just an acquaintance?

[00:32:35] Brett Louderback: No, just, I mean, his name was plastered over everything in 2000, so no, 

[00:32:39] Mike Koelzer. Host: All right. Then then I can talk about it, it starts with. You Started with my grandma, God rest her soul. She'd buy like four pair of shoes, about three sizes too small because they were on discount, that kind of stuff. But it goes with the used car salesman and JC Penney tried to do that.

This CEO came in about 10 years ago and wanted to [00:33:00] clear up all the sales and it failed on them. They had to go the route of coals and so on. And the problem with all of this stuff is everybody's kind of confused and then you start throwing out rebates and discounts and all that. And instead of looking at true prices, you throw that talk around. And some of the stuff you're talking about kind of goes out the window, unfortunately.

[00:33:28] Brett Louderback: Well. Are you familiar with the a CO action with employers and fiduciary responsibility with, like, say, retirement benefits? an employer group manages retirement benefit, there's fiduciary responsibility in there where we can't let some retirement broker come in and take gross advantage of the contribution.

Those same rules and obligations are in place for healthcare spend as well. Then we just really need to, someone needs to take action and file suit. So what would that mean? That [00:34:00] would mean you and I are an employee grinding 'em out every day and we feel like our healthcare contributions are not being managed properly.

Okay. And we could really drill into where's all the layers of payment happening and just saya pharmacy prescription, transaction. and why was one of the PBMs able to, retain a 45%, 52% rebate and it didn't come back to me, or it did come back to me and why didn't I get it as the employee?

So I don't know. I think it's general knowledge, if an employer group contributes, X dollars amount, 80% of it has to be spent. Otherwise it has to get rebated back to the contributors to the plan. Can you imagine that actuarial nightmare? When you have X amount of employees and then some quit, some start mid-year, some don't.

So this under the table agreement that we're gonna spend down your policy, to 80% is quite disgusting. How are we gonna transition this healthcare spend into the model of retirement planning [00:35:00] and where's pharmacy's role in that and where's healthcare's role in the fiduciary responsibility of, of health spend?

And cost plus begins to knock on that door. But that's a race to the bottom when you have folks out there that'll do things for a loss. So

Where do we prove our value as pharmacists? You know, And that gets into crux of every disease state starts with what? Mike, diet and Lifestyle management and when are we gonna place value there? 

[00:35:30] Mike Koelzer. Host: I think we have to ask questions like How far did you walk this morning? What have you done personally to bring this down?

You know, as far as exercise or whatever it all goes back, I think, to, a lot of it to one person, you know? Self 

[00:35:46] Brett Louderback: Personal responsibility, Mike. 

[00:35:49] Mike Koelzer. Host: Brett, Coming out as an 18-year-old now outta high school, would you pick pharmacy 

[00:35:53] Brett Louderback: man, you're gonna make me state this publicly. What [00:36:00] is it? Answer a question with a question. I don't know. Mike, what would you do?

[00:36:05] Mike Koelzer. Host: What would I do? This is what I tell my kids. I don't really tell 'em. But if they came to me and wanted to be in pharmacy, I would say, first of all, don't look at what I'm doing because our business

is volatile. You don't know

what's gonna happen. It could be put under with just some law from our governor or something like that. So I would say don't go into it because of what I'm doing. If you love the science of it and so on, and really love the drug thing of it, then go into it. Would I do it now? One of the issues I see is that pharmacy used to be a four year degree, like when my dad was there, and for me, the whole thing was five years. And it's like, well that's just an undergrad basically. And then you can go do whatever the hell you wanna do. But now with the pharmacy school being, you know, 6, 7, 7 and a half years, whatever, it's not real [00:37:00] practical to use it as your undergrad.

So you better be pretty damn sure that you're in the right profession with that.

And

I can't say I'd be doing that right now. I, I wouldn't wanna commit that much to this profession , of 6, 7, 8 years.

[00:37:15] Brett Louderback: Yeah. I guess do-overs, right?

[00:37:18] Mike Koelzer. Host: I'm not even saying over

because I would not change a thing in my life. But I mean, like right now, if you were an 18-year-old in the year 2023,

[00:37:27] Brett Louderback: definitely. Um, Definitely I would go some sort of government route. I've seen some of my colleagues go down that, whether it's Indian Health Services or or VA or military route and they're progressive institutions that your paycheck isn't determined by third party mix.

And the VA is an awesome place, man. Like, what was I thinking? I enjoy that rotation. For me personally like the structure

But didn't do it, 

[00:37:57] Mike Koelzer. Host: So Brett, you're saying if you [00:38:00] graduated now with anything you could do, whether it's engineering or business or teaching or whatever, you would pick pharmacy, but you might go a different direction in pharmacy.

[00:38:12] Brett Louderback: Yeah, I would go pharmacy with fewer barriers, But now who needs tech acumen? It's outpacing our capacity to be able to learn it ourselves. 

[00:38:21] Mike Koelzer. Host: People get a little bit afraid of AI or something like that, in my opinion is all right. When we get the age of every US resident to a hundred, and when you've got heart attacks and cancer cured, and if you've got compliance on this or that then we can worry.

Maybe we're not needed, but let the AI do all the things that a calculator did back in the sixties and then let us set higher goals. I think we can't be afraid to set higher goals.

[00:38:52] Brett Louderback: No, and I'm glad you brought that up because I saw release this weekend I think, or maybe even this morning on some, an AI was given some . [00:39:00] clinical problems involved pharmacy and like, it was a really less, like 25% of the questions were answered correctly. So there's just too much in the weeds that we get into

[00:39:11] Brett Louderback: AI is gonna be tough to capture.

[00:39:13] Mike Koelzer. Host: you

mean, so where AI was passing the legal exams and things like that, they didn't do as well with real life stuff in

[00:39:22] Brett Louderback: no, it it wasn't legal exams, it was more in practice of, we present a patient case from what I remember, the context. So we present a patient case and they only got it right 25% of the time. So

[00:39:33] Mike Koelzer. Host: AI was taking legal exams at law schools and it was doing incredibly well. But real life patients are a different beast.

[00:39:46] Brett Louderback: Oh, sure. I think law is rigid, right? it's black and white. And then you start throwing in pharmacy contracts, that's where it gets gray. I don't know how many conversations I have with pharmacists and No. I think you might be mistaken here, it it, [00:40:00] that's not law, that that's contractual law. And, then I'll get caught in the same rhetoric like, no, Brett, you're getting wrapped around the axle of contracts not 

law. 

[00:40:07] Mike Koelzer. Host: Hey, Brett pharmacy could break AI you'd say there's $80 on this $400 and chat GPT would say, okay, you made $80, no minus 80. No, that doesn't make sense. And you'd keep fighting with chat GPT until it says, I quit 

[00:40:26] Brett Louderback: and I'm gonna audit you , or what's the latest tactic? We're gonna investigate you. And so then we're gonna stop all payments.

[00:40:35] Mike Koelzer. Host: Yeah. Exactly.

[00:40:37] Brett Louderback: And by the way, we're gonna throw your payments through A-P-S-A-O that's gonna hold onto it even longer.

[00:40:41] Mike Koelzer. Host: Brett stopped wholesalers like three years ago when we stopped doing brand name, and that's when we stopped PSA's and all of a sudden, I'll get like a check for like $6,000 [00:41:00] from the PSAO. It'll show up like two and a half years later and we'll call 'em up. We'll be like, what was this for?

They're like, it was such and such and such. It's like, okay, fine. not complaining, but it's so nebulous. 

[00:41:14] Brett Louderback: Wow.

[00:41:15] Mike Koelzer. Host: Brett, thanks for joining us today. It's nice to have fresh perspectives with a little bit of drive behind it maybe it just helps me to know that other people are out there fighting so I can just sit on my ass and just have conversations here. But way to go, nice to have you on congratulations on what you're doing and keep it going.

[00:41:38] Brett Louderback: Hey, thanks Mike for having me. . Hopefully we had some meaningful conversation here that can be applicable in the day-to-Day and help folks out.

[00:41:47] Mike Koelzer. Host: Brett, thank you. And we'll keep in touch. 

[00:41:49] Brett Louderback: Sounds good. Thank you.

You've been listening to the Business of Pharmacy podcast with me, your [00:42:00] host, Mike Kelzer. Please subscribe for all future episodes.