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A
C
E
A
All
right
very
good
looks
like
we
have
a
quorum.
The
first
order
of
business
we
have
is
approval
of
the
minutes
from
the
we
have
two
sets
of
orders
or
approvals
to
to
look
for
the
first
one
is
July,
20th
2022.,
we'll
entertain
a
motion.
You
have
a
motion.
Is
there
a
second
all?
Those
in
favor,
please
signify
by
saying
aye
any
opposed
right.
Those
are
approved
the
next
star,
the
August
25th
2022
minutes.
A
We
have
a
motion
for
approval.
Is
there
a
second?
We
have
a
second
all,
those
in
favor,
please
signify
by
saying
aye
any
opposed
all
right.
Those
minutes
are
approved
for
both
of
those
meetings.
All
right
we've
got
kind
of
a
robust
agenda
today.
The
first
thing
we're
going
to
take
up
is
going
to
be
our
regulations
on
item
number,
seven
on
the
agendas
consideration
of
referred
administrative
regulations.
These
have
been
out
for
a
while
they've
gone
through
the
administrative
regulation
subcommittee
as
well.
Any
discussions
concerns.
A
If
not,
there's
no
discussions
or
questions
those
standards
having
been
reviewed
by
this
committee
as
well,
all
right,
very
good,
all
right.
The
first
thing
we're
going
to
talk
about
kind
of
a
general
theme
today
is
based
off
of
a
bill
that
was
proposed
last
session,
House
Bill,
457.,
I
think,
which
is
a
broader
discussion.
A
We've
had
a
lot
of
discussions
on
pbms
we've
had
some
testimony
this
year,
based
on
the
fact
that
we've
gone
to
a
single
PBM
system
within
Medicaid
and
we've
heard
from
the
cabinets
the
savings
that
have
come
into
Medicaid
as
a
result,
and
really
it
appears
to
be
a
rather
large
amount
of
money
that
we're
going
to
be
saving
with
that.
That
prompts
us
to
start
looking
at
pbms
in
general
in
the
state
of
Kentucky
and
I.
Think
it's
important
for
us
to
have
this
discussion.
A
I've
asked
representative
Sheldon
who
this
was
his
bill
and
I
think
we
all
have
a
copy
of
that
before
us.
Also
representative,
if
you'd
like
to
go
to
the
table
and
I,
think
we've
also
got
Kathy
Hannah.
If
Kathy's.
Here,
it's
good
to
see
you
Kathy.
We
work
together
in
clinical
settings
as
well.
So,
if
you'd
like
to
both,
please
introduce
yourselves
for
the
record
and
begin
your
testimony
whenever
you're
ready.
E
Thank
you,
co-chair,
Alvarado
and
and
Moser.
Thank
you
so
much
for
for
being
here
allowing
us
to
be
here
and
present.
This
again
today
keep
the
momentum
going.
It's
a
a
great
piece
of
policy.
It
got
through
the
house
last
year
and
I
just
ran
out
of
gas
over
here
and
we're
or
in
the
Senate
and
and
we're
looking
forward
and
appreciate.
You
asking
us
to
come
here
and
talk
about
it
again.
We
obviously
it's.
It
can
be
fairly
complicated.
E
It's
very
large
piece
of
legislation,
but
the
simpleness
of
it
you'll
see
today
and
we're
gonna
we're
gonna
try
to
try
to
do
that.
So
let
me
start
by.
Let
you
know
that
you're
going
to
get
more
information
about
Pharmacy
benefit
managers.
Really,
then
you
you
could
ever
imagine,
but
it's
again
we're
working
on
trying
to
keep
it
very
simple.
It's
it's
more
of
a
super-sized
self-serving
influence
that
pbms
have
on
prescription
drug
costs
and
for
those
of
you
all
that
I
think
you
know
what
they
are
but
they're.
E
Basically,
if
you
took
manufacturers
over
here-
and
you
took
insurance
companies
and
pharmacies
wholesalers-
you
know
the
pbms
are
in
the
middle.
They
handle
all
the
money
it
all.
It
flows
through
them,
one
way
or
the
other.
So
why
do
we
concentrate
on
pbms
are
highly
unregulated
and
the
rest
of
the
country
is
on
alert
and
for
years
now
this
has
been
an
issue,
an
issue
for
our
state
and
many
others.
E
You
were
here
today,
you're
here
today
from
pbm's
that
that
will
tell
you
how
the
you
know,
Pharmacy
care
and
and
really
Pharmacy
in
general,
in
our
rural
states
in
America,
are
being
threatened
to
the
point
where
there's
not
going
to
be
any
rural
pharmacies
out
there.
If
we
don't
do
something
about
this,
it's
a
bigger
problem
than
that.
E
You
know
it's
not
just
number
of
pharmacies
and
and
you'll
hear
that
through
the
testimony
of
the
day,
rather
than
to
repeat
them,
I'm
going
to
let
these
experts
tell
you
their
their
part,
but
let
me
go
as
a
legislator
pharmacist
and
an
employer
and
a
patient.
That's
that's
all
the
hats.
I,
wear
I
have
experience
with
pbms
through
multiple
prisms,
my
invitation
to
join
the
National
Council
with
legislators.
E
All
over
the
country
was
priceless
for
three
years
we
worked
and
we
confirmed
and
prioritized
that
PBM
reform
Even
in
our
recommendations
of
about
eight
or
ten,
was
number
one
on
the
list
to
try
to
reduce
drug
costs.
That
was
our
goal
in
that
committee.
I
see
every
day
the
role
pbm's
play
in
the
various
hats,
I
wear
in
the
cost
of
a
prescription
drug.
That's
why
it's
so
important
and
you'll
hear
more
about
that.
As
legislators,
we
recognize
the
problem
of
the
pbms
within
Medicaid
managed
care,
and
we
had
to
address
that
here.
E
A
couple
years
ago
the
chair
mentioned
that
Senate
bill
50
in
2020.
Senate
bill
50
required
the
department
for
Medicaid
services,
and
this
is
going
to
be
important.
You
understand
how
well
Senate
bill
50
worked
and
why
we
need
to
look
at
the
other
part,
the
the
other
pbms
that
are
you
doing
business
in
our
state
and
and
you're
going
to
see
what
Senate
bill
50
did
for
our
Medicaid
Program
and
why,
in
the
world
we
would
let
our
consumers
be
subject
to
such
manipulative
type.
E
Self-Serving
behavior
is
beyond
me
and
you're,
going
to
hear
a
lot
more
about
that
that
Senate
bill
50
required
the
department
for
Medicaid
services
to
just
contract,
with
a
single
PBM
for
the
purpose
of
administering
Pharmacy
benefits,
and
it's
working
as
I
said.
In
spite
of
all
the
noise
opposing
Senate
bill,
50
and
I,
we
were
all
there
in
fact,
much
of
it
like
the
email.
Many
of
you
received
this
morning
opposing
457.
same
rhetoric.
E
Same
talk,
Senate
bill
50
passes
contrary
to
that
pbms
and
insurance
companies
argued
then
that
it
would
dramatically
increase
the
operational
cost
of
Medicaid
and
they
stood
and
they
fought
us
on
Senate
bill
50
and
thank
you
Max
wise
for
sponsoring
Senate
bill
50
and
allowing
me
to
be
part
of
that
over
in
the
house.
So,
thank
you
very
much
and
we're
going
to
talk
about
what
Senate
bill.
E
50
did
did
some
real
numbers
here
so
that
we
can
get
further
down
the
road
it
established,
a
transparent,
transparent
reimbursement
model
to
pharmacies,
ensure
patients
had
access
to
Pharmacy
care
of
their
choice,
that's
important
and
based
on
testimony
from
secretary
friedlander
and
Medicaid
commissioner
Lisa
Lee.
We
know
that
the
state
has
increased
the
amount
of
rebates
collected
by
the
state
more
than
50
percent,
most
recently
collecting
1.2
billion
dollars
in
rebate
drug
rebate.
Just
this
this
year,
I
have
a
slide
for
I.
Think
that's
that's
coming!
You
got
it
up
now
or
okay.
E
So
so,
let's
so
this
resulted
there.
There
were
some
chargebacks
on
those
rebates.
I
asked
for
some
confirmation
on
what
other
means
on
the
pie
chart
that
you're
that
you're
going
to
see
coming
up
here
and
this
pie
chart
shows
482
million
to
the
medic
Medicaid
system
savings.
You
see
that
those
parentheses,
so
we
actually
injected
482
million
back
into
the
Medicaid
Program
because
of
Senate
bill
50..
That's
the
nuts
and
bolts
of
it.
E
On
top
of
that,
a
few
years
prior
to
that
and
Senator
wise
was
involved
in
this
as
well.
We
we
unsca,
we
discovered
a
practice
known
as
spread
pricing
that
pbms
use
where
they're
charging
the
pharmacy
one
thing
and
then
charging
the
people.
They
work
for
a
different
amount,
and
that
was
a
spread
and
they
were
keeping
the
money
in
between.
So
we
we
uncovered
that
and
was
123
million.
Some
of
you
may
remember
you
take
that
so
so
so
Senate
bill
50
spoke
to
the
spread
pricing.
It
spoke
to
the
behavior.
E
We
had
to
put
some
rules
in
place.
We
knew
the
RFP
would
go
out.
We
needed
some
rules,
that's
what
the
13
pages
from
the
house
did
said.
Look
we're
gonna
we're
gonna,
we're
gonna
put
in
some
rules
here.
Simple
Rules
keep
the
Lo
the
ground.
Fair
is
all
we
really
want.
Nobody
wants
to
tell
anybody
what
to
do.
We
just
need
it
fair
and
any
good.
Well
I'll
get
into
that
part
later,
but
that
that
is
amazing.
E
So
if
you
go
to
and
I
think
I
said
three
as
an
employer,
I'm
going
to
talk
about
I
noticed
that
the
company-
and,
let
me
tell
you
again-
I'm
going
to
go
I'm
going
to
put
on
different
hats
as
I
go
through
here.
I
work
for
a
very
large
company,
33
States,
16
000
employees
as
we
started
going
through
ours,
and
so
as
an
employer
I'm
going
to
talk
for
a
minute
because
employers
we
all
heard
from
them
last
year,
all
our
premiums
are
going
to
go
up.
E
Our
premiums
are
going
to
go
up
and
there's
absolutely
no
factual
data.
For
that
and
we're
going
to
show
you
today
and
there's
going
to
be.
Experts
testified
to
the
complete
contrary,
and
if
that
were
the
case,
why
did
it
go
way
down
at
Medicaid?
Well,
I
mean
there's
just
there's
no
reason
for
it.
So
I'll
just
tell
you
what
we
did.
We
immediately
saw
that
these
people
were
taking
money
from
us,
because
we
we
happen
to
own
pharmacies
and
we
own
insurance
companies
and
we
and
we're
self-insured
what
a
unique
position
to
be
in.
E
We
literally
could
go
all
the
way
around
the
circle
and
find
out
where
the
money
was
going
and
we
found
out.
They
were
keeping
our
money.
So
we
fired
our
pbn,
which
was
one
of
the
big
three
by
the
way
and
and
an
interesting
story
they
didn't
want
to
get.
Even
though
we're
self-insured
and
we
own
the
data,
we
requested
the
data
from
Blue
Cross
Blue
Shield,
which
is
which
was
not
the
PBM
but
but
our
provider,
and
and
they
didn't
want
to
give
us
the
they
didn't
want
to
give
it
to
us.
E
They
didn't
want
to
give
us
the
data,
our
own
data
we
literally
had
to
press
for
three
months
when
we
got
it.
It
was
all-
and
you
hear
this
same
story
from
all
employers
that
try
to
look
into
it
and
we
got
it
all.
It
was
all
on
spreadsheets
we
couldn't
understand
it
was
it
was,
it
was
40,
000
spreadsheets
and
they
were.
There
was
no
format
to
it.
We
went
back,
we
finally
got
it
in
the
format
we
wanted.
It's
just
it
never
ended
so
anyway,
anyway,
we
ended
up
getting
the.
E
We
ended
up.
Getting
that
and
we
identified
the
money
they
were
stealing,
they
immediately
came
back
and
said.
Look
let
us
write
you
a
check
and
we
said
no
I
can't
trust
you
now.
We
can't
trust
you
later.
So
we
we
went
and
got
another
PBM,
a
transparent,
PBM
and
you'll
hear
from
some
pbms
talking
today.
We're
not
leaving
I
mean
we're
you're
going
to
hear
from
those
guys
and
they
came
in
and
we
saved
a
million
dollars.
E
Our
first
12
months
out
of
the
hatch
by
switching
because
Blue
Cross
Blue
Shield
came
up
with
a
with
a
new
rule.
That
said
any
employer,
I,
don't
know
if
it's
in
place
or
it
ever
was
a
rule,
but
but
we
were
told
any
employer
that
had
over
a
thousand
employees
could
carve
out
their
PBM
and
we
we
don't
have
to
use
the
one
they
recommended.
E
So
so
we
got
to
choose
our
own
PBM
transparent
and
we
saved
a
million
dollars
so
very
similar
to
Medicaid,
except
I'm,
an
employer
telling
you
the
story
that
way
and
because
and
and
let
me
refer
to
this
slide
here-
real
quick.
We
have
found-
and
this
study
is
extensive-
they've
gone
all
over
the
United
States
saying
the
ones
with
the
real
extensive
PBM
reform.
E
What
are
you
doing
with
premiums?
What
are
you
paying
for
premiums
because
we're
being
alleged
that
there's
cut
and
cost
premiums
to
go
up
this?
This
slide
clearly
shows
that
the
people
that
had
more
PBM
legislation
reforms
just
kind
of
Reign
them
into
to
to
where
they
have
to
play
fair.
Their
premiums
actually
were
lower.
They
weren't
higher,
so
that
graph
is
extensive
research
that
proves
that
they
will
not
show
you
an
opposite
graph
that
has
any
numbers
we
begged
for
them
last
year.
E
We
couldn't
nothing
nothing
to
do
this
similar,
so
so
then,
now
I'll
kind
of
finish
up
for
a
hand
off
to
Kathy.
Here
it
says,
as
a
pharmacist
I've
watched
as
patients
who
have
visited
my
Pharmacy
for
years
leave
because
they've
been
forced
to
use
the
pharmacy,
the
pbn
owned,
taking
aware
really
just
take
taking
the
ability
for
them
to
use
their
local
provider,
who
they
trust
so
much
and
I
think
through
covet
and
a
lot
of
other
things.
E
They
can't
use
because
the
mail
order
pharmacy
won't
stop
delivering
the
medication
literally
it
just
keeps
coming.
They
try
to
call
and
stop
it.
It
just
keeps
coming
or
because
they
aren't
sure,
even
how
to
use
it
and
they'll
just
drop
it
off
at
my
Pharmacy
and
I'll
have
to
call
and
try
to
figure
out
how
to
get
it
stopped.
E
Think
about
that
a
minute
that
happens.
We
can
solve
this
problem
through
legislation
we
really
can,
but
we
know
that
passing
such
legislation
is
difficult.
You
guys
you
get
so
much
conflicting
messages,
so
so
many
different
people
telling
this
affects
a
lot
of
people.
I
mean
you
literally
got
the
biggest
insurance
companies
in
the
world.
E
The
top
Fortune
500
companies
in
the
world
pbm's
the
three
major
ones
that
control
70
of
the
market
are
all
top
Fortune
500
companies,
you
know
and
and
it's
it's
a
deal
and
I
understand
how
much
you
know,
but
but
you'll
see
as
we
keep
going
here.
We
can
solve
this
problem
through
legislation
for
sure
today,
you're
going
to
hear
from
drug
pricing,
expert
National
expert,
non-traditional,
pbms
they'll
be
here
today
who
will
explain
what
employers
they
can
save
money
through?
Pbm
reforms,
not
just
increase,
but
save
money
Additionally.
E
You
will
hear
from
patient
advocacy
groups
today
that
will
discuss
the
impact
pbms
have
on
on
patients
ability
to
afford
the
medication
so
for
decades,
legislators
at
the
state
and
federal
level
have
sought
to
reduce
the
cost
of
medication.
To
date,
these
policy
changes
have
not
dealt
with
the
comprehensive
negative
behaviors
of
pbns
and
I.
Put
emphasis
on
comprehensive.
This
is
needs
to
stay
a
comprehensive
bill.
It
doesn't
need
to
be
pieced
together
or
pieced
apart
or
grabbed
and
said.
Let's
do
it
this
way.
E
E
This
is
an
issue
where
we
can
make
a
difference
in
the
quality
of
life
of
every
Kentuckian.
The
pbms
will
tell
you.
These
reforms
will
increase
the
cost
of
health
insurance
and
we
just
got
over
that.
We've
done
some
good
things
on
PBM
reform
over
the
years
to
help
our
constituents,
but
we
can
and
must
stay
with
this
whole
comprehensive
thought.
I
won't
be
here
next
session,
but
urge
you
to
make
comprehensive
PBM
reform
a
priority.
Kentuckians
pay
the
second
highest
annual
average
prescription
drug
cost
in
the
entire
country.
E
What
more
can
we
do
as
a
body
than
to
address
this?
Really?
We
could
we've
already
just
seen
that
we
made
the
adjustments
of
Medicaid
and
it's
500
million
dollars.
Patients
cannot
afford
to
wait
for
them
to
be
priority.
It's
got
to
be
patience
over
profit.
It
just
has
to
be,
and
unfortunately,
the
three
main
guys
that
control
all
the
prescriptions
in
the
world
are
all
answering
to
stockholders
and
you'll
hear
more
about
that
today.
Now
let
me
introduce
I'm
glad
y'all
are
I'm
sure
y'all
are
tickled
to
that.
Now.
E
G
Afternoon
and
thank
you
chairman
Alvarado
Chevy,
Moser
and
committee
members
for
the
opportunity
to
speak
today.
My
name
is
Kathy
Hannah
and
I'm
here
today,
as
the
chair
of
the
Kentucky
pharmacist
Association
to
speak
on
behalf
of
Pharmacists
across
the
Commonwealth
and
for
all
the
patients
in
the
committee
communities,
we
serve
representative
Shelton.
Thank
you
for
Champion
PBM
reform
in
Kentucky.
This
is
an
important
issue
and
something
that
needs
immediate
attention.
The
proposed
legislation
you'll
hear
about
today
will
address
a
growing
problem
impacting
all
kentuckies
to
kentuckians.
G
Most
importantly,
the
legislation
you
will
hear
about
today
will
prioritize
people
over
PBM
profits,
while
the
role
is
unknown
to
most
pbms
play
a
significant
role
in
what
kentuckians
pay
for
their
prescription
medications
and
where
and
how
they
can
access
these
medications
and
why
they
claim
to
be
working
on
behalf
of
both
employers
and
patients
more
time
than
not
their
actions
show
they
are
more
interested
in
their
own
profits
over
what
is
best
for
employers
or
patients
as
three.
What
you
could
call
Super
pbms
have
come
to
dominate
the
market
right
now.
G
They
control
almost
80
percent
of
it.
The
out-of-pocket
cost
for
our
patients
has
skyrocketed,
while
their
access
to
medications
and
choice
of
pharmacies
has
plummeted.
Something
must
be
done
before.
Neither
patients
nor
a
pharmacist
can
afford
it
much
longer.
I
commend
the
general
assembly
for
passing
Senate
bill
50
in
recent
years.
Reforming
pbm's
behavior
in
Medicaid
was
a
major
step
forward.
G
Whether
you're
waiting
on
the
final
report,
we
have
initial
indications
of
the
potential
savings
as
referenced
by
representative
Shelton
and
I'm.
Confident
taxpayers
will
be
pleased
with
results
with
Senate
bill
50,
the
general
assembly
removed
the
games
lifted
the
Veil
and
allowed
pharmacies
to
receive
adequate
reimbursement
for
just
dispensing
a
prescription
drug,
but
that
was
just
one
piece
of
the
puzzle.
G
States
surrounding
Kentucky
have
passed
comprehensive,
PBM
reform
legislation
like
that
proposed
by
representative
Shelton
in
2022
session,
and
it's
time
for
Kentucky
to
do
the
same
as
the
slide
references.
The
bill
representative
Shelton
proposed
would
ensure
that
patients
have
access
to
care
at
their
local
pharmacy,
ensure
that
patients
have
choice
in
where
they
go
for
pharmacy
care
and
protect
the
free
market
by
ensuring
robust
Pharmacy
competition.
G
G
G
Our
pharmacies
and
communities,
large
and
small
across
the
state,
provide
invaluable
personal
services
to
kentuckians
something
no
PBM
or
Health
Plan
mandated
mail
order.
Pharmacy
could
ever
do
during
the
recent
pandemic.
Pharmacists
provided
countless
patients
with
vaccinations,
testing
and
treatment
for
cover
19..
G
G
We
know
that
you
have
heard
from
pharmacists
about
the
impact
of
pbms
on
our
industry
and
our
patients,
but
we
also
want
you
to
hear
from
those
outside
of
the
profession
who
understand
their
impact
and
from
those
directly
impacted
by
Pharmacy
care
as
well.
Thank
you
in
advance
for
listening
to
the
presenters
today
it
will
cut
through
the
noise
and
misdirection
of
the
insurers
and
the
pbms.
Thank
you.
A
A
You
mentioned
the
letters
we've
got
in
opposition
I've,
seen
those
letters
I
know
last
year,
this
kind
of
got
derailed,
because
I
think
those
kind
of
letters
went
out
to
our
big
employers
and,
frankly,
our
insurance
companies
that
manage
a
lot
of
health
insurance
or
mostly
health
plans.
I
should
say
not
so
much
insurance
anymore
these
days,
but
if
they
do
these
health
plans,
they
put
out
these
letters
and
scare
everybody
saying
the
cost
of
your
health
care
is
going
to
go
up.
A
We
hear
that
every
year
about
everything
that
we
propose
and
whether
or
not
we
pass
something
or
not,
the
costs
keep
going
up.
Nonetheless,
I've
gotten
to
the
point
where
I,
don't
believe,
I'll,
be
perfectly
honest.
Just
from
my
own
personal
standpoint,
I,
don't
believe
those
letters,
I,
don't
believe
the
claims
anymore
I,
don't
believe
that
hey
you're
going
to
do
this,
it's
going
to
cost
you
more
I,
don't
believe
it.
A
We
heard
it
all
with
Senate
bill
50,
as
you
mentioned,
and
we're
looking
and
we've
heard
testimony
this
interim
480,
plus
million
dollars
saved
just
for
Medicaid,
that's
36
percent
of
our
health.
You
know
health
care,
that's
covered
in
the
state,
go
to
people
who
receive
Medicaid.
That
means
the
other
64
either
don't
have
insurance
or
have
private
insurance.
Most
of
them
have
private
insurance.
So
I
can
only
imagine
the
amount
of
savings.
That's
present
in
that
that
people
are
unaware
of.
We
hear
people
complain
all
the
time
about.
A
I
have
to
go,
I
have
to
pay
for
medication,
it
keeps
going
up
or
how
come
my
co-pay
went
from
five
bucks
to
50
bucks
to
a
hundred
and
fifty
dollars.
The
lady
who
cut
my
hair
this
morning
get
as
I
was
telling
her
we're
going
to
be
hearing
this
today
had
that
complaint
for
the
exact
same
medication,
there's
a
lot
of
palm
greasing.
That
goes
on
behind
doors
with
insurance
companies
and
pharmaceuticals,
and
I've
often
said
why?
Don't
we
just
go
to
a
straight
voucher
system
where
you
have
a
diagnosis.
A
Tell
me
how
much
you're
willing
to
cover
give
me
a
voucher
for
that
amount
and
let
the
doctor
and
the
patient
determine
that
if
pharmaceutical
costs
are
too
high,
Pharma
can
determine
if
they
want
to
sell
their
drugs.
They
better
get
it
below
that
price
point
or
they're
not
going
to
sell
any
drugs
simple
free
market.
When
I've
talked
to
some
people
within
the
industry,
they
act.
Like
that's
really.
A
Novel
and
I
said
it's
a
really
basic,
simple
system
of
how
we
do
this
and
you
can
control
your
costs
and
your
risks
and
your
exposure
and
I
think
we're
tired
of
it,
and
so,
when
the
same,
complaints
as
you've
said
have
come
with
Senate
bill
50
and
we
heard
the
same
complaints
it's
going
to
raise
the
cost
of
Medicaid.
Even
the
cabinet
said:
we've
been
hearing
from
them.
A
You
guys
want
to
do
it
go
ahead
legislature
if
it
costs
more,
it's
going
to
be
on
you
and
it
may
come
and
go
boy,
almost
a
half
a
billion
dollars
in
savings
for
medicabits,
coming
down
the
pike
for
us,
so
I
think
if
we're.
If
we
and
we
have
members-
and
we
have
a
lot
of
friends
who
represent
these
insurance
companies,
friends
that
I
know
who
send
me
letters
and
I
like
them
and
they're.
My
friends
but
I
know
that
the
people
behind
those
letters
ultimately
I,
don't
trust
anymore.
With
their
claims.
A
We've
got
people,
unfortunately
General
Assembly,
who
listen
to
those
individuals
and
say:
well,
they
tell
us
this
I
would
argue
they're,
not
believable
anymore,
on
those
claims
and
it's
time
for
start
looking
at
something
that's
going
to
help
protect
it.
It's
going
to
help
reduce
the
cost
we
and
I'm
hoping
we're
going
to
get
an
idea
and
I've
asked
you
all
to
present
something
and
where
the
dollar
goes.
A
When
you
go
to
a
pharmacy
and
you
give
a
dollar,
how
much
of
that
goes
to
the
pharmacist,
how
much
that
goes
to
Pharma
and
how
much
that
goes
towards
a
PBM
and
I
think
we're
going
to
be
shocked
at
seeing
some
of
the
information
that's
coming
through,
but
we
got
to
start
opening
up
our
eyes
and
stop
worrying
about
relationships
or
people
that
we
think
and
start
protecting
the
people
of
this
state
because
a
huge
expense
and
it's
a
huge
cost
on
health
care.
For
folks
that
are
out
there
all
right.
H
Thank
you,
Mr
chairman,
and,
and
thank
you
representative
Sheldon,
for
being
here
today
and
for
tackling
this
issue.
I,
don't
know
if
you
remember
when
I
was
first
elected.
This
is
one
of
the
conversations
we
had
in
the
hall,
because
this
is
not
only
a
patient
care
and
delivery
service
issue.
This
is
how
do
we
utilize
our
health
care
dollars
efficiently
and
effectively
and
take
care
of
people
so
I
just
want
to
say.
Thank
you.
Thank
you
and
I
want
to
add
just
a
few
words
you
know.
H
H
They
are
the
experts,
they
know
the
interactions,
they
know
the
efficacy,
they
can
make
you
a
better
doctor
and
protect
your
patients
and
then
all
of
a
sudden,
it's
like
the
world
decided
that
all
a
pharmacist
does
is
put
30
or
90
pills
in
a
bottle
and
and
put
it
in
the
mail
and
you're
done,
and
that
is
not
the
case.
That
is
not
true.
H
As
a
physician
myself,
I
have
fought
with
Express
Scripts
over
and
over
and
over
because
either
you
end
up
with
a
hundred
too
many
pills
in
your
clot
in
your
cabinet
and
you're
like.
Why
do
you
keep
sending
me
these?
Why
do
you
keep
sending
me
these
or
you
don't
end
up
with
the
one
that
you
really
need
and
they
have
no
recourse
for
you,
nothing
that
they
are
going
to
do.
I
have
talked
to
their
dispensers,
I've
talked
to
their
pharmacists,
I
mean
and
I'm
an
educated
consumer.
H
We
are
putting
people
in
danger
when
we
take
pharmacists
out
of
the
local
community
as
trusted
Healthcare
Providers
and
expand
affect
people
to
rely
on
whatever
some
company
that
doesn't
know
them
and
doesn't
care
about
them
and
is
making
nothing
but
a
profit
on
them
to
show
up
in
their
mailbox.
So
thank
you.
B
Thank
you
chairman.
Thank
you,
representative.
Sheldon
I
want
to
congratulate
you
on
getting
your
house
bill
457.
As
far
as
you
did,
you
know,
I
had
House
Bill
one
or
Senate
Bill
134,
which
is
kind
of
companion
bill
to
yours,
which
in
essence
would
give
80
the
rebate
back
to
the
consumer
at
the
point
of
purchase
and
mine
didn't
get
out
of
the
gate
at
all.
So
yeah,
congratulations
on
your
ability
to
move
legislation
forward,
but
you
know
what's
interesting
about
this.
B
E
There's
absolutely
no
question
in
my
mind
that
it
would
and
to
put
this
in
perspective.
I
think
Senator
Alvarado
mentioned
it,
that
you
know
our
premiums
and
our
drug
costs
under
the
watch
of
pbms
over
the
last
20
years.
What
has
it
done?
Drug
costs
has
soared,
but
they're
in
control
of.
If
you
ask
them
what
they
do,
will
we
keep
your
drug
costs
down?
E
It's
point:
six
percent
increase
in
premiums
now,
when
the
when
the
actuary
came
back
with
that
I
argued
with
them.
I
said
tell
me
about
the
0.6
I
want
to
know
where
you
got
that
from
and
clearly
on
the
fiscal
note
and
I'll
give
everybody
a
copy
on
I
mean
on
the
Mandate
on
the
health
mandate.
It
says
on
on
the
348
mandate
at
the
bottom,
it
says:
well,
we
really
can't
say
for
sure
it's
0.6
that'll
be
the
most
it'll,
be
0.6
the
most,
because
we
really
can't
get
the
data.
E
You
can't
really
get
all
the
data
we
need.
Well,
that's
you
heard
me
a
minute
ago
talk
about
how
hard
it
is
to
get
data
from
a
PBM
I.
Tell
you
what
I'd
love
for
anybody
to
stay
in
this
room
that
can
they
can
get
it
and
understand
it
and
put
it
in
a
format
that
we
could
understand.
It
took
us
forever
as
a
big
company.
So,
yes,
we
can
get
that
back.
I,
don't
think
it
goes
up
at
all,
but
we
have
we
did
the
physical.
B
E
B
I
call
this
Emperor's
close
moment.
E
B
We
saw
a
graphic
back
in
the
interim
when
we're
in
Northern
Kentucky
and
the
numbers
are
rough
here,
but
insulin
price
400,
the
cost
to
produce
it.
You
know
like
120
and
the
difference
is
the
rebate,
who's
funding
that
rebate.
E
Of
course
we
are
exactly
as
as
consumers
and
and
if,
as
part
of
this
comprehensive
bill,
a
big
part
of
that
is
your
bill,
and
actually,
when
you
wrote
it,
you
remember,
we
had
a
discussion
I.
E
Actually
we
made
sure
we
wrote
it
to
be
to
be
companion
bills
and
and
pulled
some
of
my
rebate
language
out
of
my
bill,
because
I
believe
so
much
in
what
you
were
doing
and,
and
that
is
should
be
part
of
the
same
bill
that
whole
rebate
language,
but
basically
whatever
rebates
are
happening,
should
be
passed
directly
to
the
consumer.
That's
part
of
this
bill
and
I
think
everybody
in
here
believes
that
a
Cost,
Plus
you'll
hear
from
pbms
today
that
are
going
to
be
using
what
they
did
when
they
started.
E
B
E
B
A
You
Senator,
if
you
take
a
look
at
482
million,
that
we
have
on
page
one
of
your
presentation
there
and
there
are
1.6
million
recipients
of
Medicaid
currently
in
Medicaid,
just
take
a
look
at
that.
It
comes
out
to
301.25
per
person.
If
Medicaid
were
a
private
plan,
that's
what
we
would
have
saved
this
year.
So
that
gives
you
an
idea
of,
and
you
can
imagine
the
other.
You
know
2.9
Million
people
in
the
state
that
are
receiving
health
care
of
any
type.
A
B
You
Mr
chairman
representative
Sheldon,
thank
you
so
much
going
to
miss
you
in
this
Arena
and
your
passion
and
and
all
the
help
you've
given
me
and
others
when
it
came
to
PBM
legislation,
Kathy
good,
to
see
you
also
yes,
there's
as
many
of
us
as
there's
pharmacists
here
on
this
committee
and
others
that
have
that
have
worked
hard
with
50
with
117
all
the
stuff
we've
done
in
the
past,
and
I
appreciate
the
efforts
but
you're
right.
B
We
see
other
states
around
us
that
are
passing
more
of
a
comprehensive
plan,
and
this
is
something
that
we
have
got
to
address.
I
might
continue
to
go
another
session.
Without
doing
so.
My
question
and
Kathy,
you
may
be
the
one
to
answer
this:
what
about
the
federal
level?
What
are
we
seeing
with
our
federal
delegates
in
U.S
Congress
of
trying
to
handle
this
situation?
I?
Think
every
state
is
doing
all
that
we
can,
but
your
conversations
with
our
U.S
Congress
members,
U.S
senators
and
others.
B
What
are
we
seeing
or
what
are
we
not
seeing
to
also
engage
them
in
this
Arena,
because
I
do
appreciate
leadership
that
have
allowed
other
bills
to
move
and
have
tried
to
progress,
but
at
the
same
time
we
go
after
this
every
session
upon
every
session,
and
so
we
need
help.
Also
at
the
federal
level.
G
G
So
there
are
some
activities
on
the
federal
level,
I
think
the
probably
you
may
be
able
to
answer
this
they're,
probably
hitting
some
of
the
same,
getting
a
lot
of
the
same
information
from
people,
and
so
the
sooner
we
crack
that
open
the
better.
Yes,
there's
a
lot
of
activity
out
of,
is
it
Carter?
We
met
in
Georgia,
yes
well
and
really
just.
G
E
Think
federally
and
I
don't
mind,
jumping
in
just
federally
they
they
voted
6-0
unanimously
to
investigate
thoroughly
PM
pbns.
Just
recently,
just
in
the
last
few
months,
that's
a
huge
and-
and
that
should
just
tell
you
how
how
concerned
everybody
is
our
concern.
Now
this
is
going
to
go
on
forever
and,
of
course,
Federal
Trade
Commission.
Is
they
look
at
it
much
a
broader
situation
like
unfair
practices
in
the
marketplace,
monopolistic
type,
manipulative
type
Praxis?
They
will
look
at
it
from
a
broader
lens.
E
You
know
we're
the
providers,
you
know
what
kind
of
Base
do
we
have?
How
vertically
integrated
are
we
at
they'll
come
out
and
they'll
talk
about?
Well,
let
me
see
here
these
pbms.
They
used
to
be
kind
of
separate
over
here
a
decade
ago,
but
now
they
have
migrated
and
sucked
themselves
in
and
now
they
own
the
insurance
companies
or
the
insurance
companies
on
them.
There
is
absolutely
no
protection.
We
have
the
pbms
setting
the
prices
negotiating
the
prices
and
they
are
performing
services
for
insurance
companies.
They
they
own
or
don't
the
top.
E
Insurance
companies
are
owned
by
the
PBM.
So
this
vertical
integration,
and
just
recently
they
bought
another
company,
called
change,
which
was
the
last
company
I
know
of
used
to
be
called
MD
on
used
to
be
called
NDC
before
that
relay
Health
before
that
got
to
go
back
a
ways
that
company
switches
every
prescription
transaction
in
the
country.
It's
called
change,
Healthcare
and
just
recently,
United
Healthcare
just
bought
them
and
the
Federal
Trade
Commission
was
investigating
that
one
as
well.
E
So
there's
just
a
lot
going
on,
and
this
vertical
integration
is
what
the
federal
guys
will
will
address.
A
F
Thank
you,
Mr
chair.
Thank
you
so
much
for
bringing
this
this
bill,
your
work
on
it.
Your
persistence,
I,
really
appreciate
it.
We
are.
We
are
really
going
to
miss
your
your
passion
and
your
expertise.
So
thank
you
for
continuing
to
work
on
this
I.
Just
a
lot
of
what
I
wanted
to
talk
about
has
already
been
addressed.
I
you
know,
I
did
have
some
questions
about
what
on
a
federal
level
is
being
done
to
address
this
I
mean
we
hear
bits
and
pieces.
F
F
You
know
we're
we're
talking
about
the
vertical
integration
and-
and
you
know
how
that
absolutely
creates
a
monopoly,
and
so
you
know
there's
a
comment
here
that
says
that
this
bill
would
give
hospitals
a
monopoly
on
certain
drugs.
I
guess
this
is
talking
about
specialty
pharmacies
or
what
white
baggage
I
mean.
F
You
know
to
to
point
out
a
monopoly
is
I
mean
when,
when
that's
exactly
what
we're
talking
about
here
and
and
the
ways
that
it
prohibits
the
free
market-
and
it
just
creates
an
absolute
level
of
bureaucracy
that
is
I
we're
seeing
we
can,
we
can
see
easily
through
Senate
bill
50
and
what
that
did
to
save
money
through
Medicaid.
What
this
is
likely
to
show
likely
to
do
for
other
coverage.
F
E
I
have
looked,
you
know
just
to,
for
instance,
in
the
last
I've
been
working
still
last
three
months,
there's
been
10
pieces
of
legislation
passed
in
within
in
the
United
States
various
States
Tennessee
Colorado
I
can't
go
through
them
all,
but
I
I
and
I
looked
at
them
thoroughly.
Oddly
enough
sections
of
our
457
are
in
most
of
them,
if
not
all
of
them-
that's
great,
that's
great.
E
They
are
doing
it
because
of
the
results
that
we've
seen
in
studies
that
have
come
out
so
as
individual
numbers
from
different
individual
states,
I
don't
have,
but
but
the
the
graph
we
showed
earlier
was
you
know
there
has
been
extensive
study
on
those
that
had
extensive
PBM
reform
and
just
with,
and
they
tried
not
to
and
I
I
like
that
they
did
the
study.
This
way
they
said,
look
we're
not
going
to
really
even
try
to
press
down
on
what
reform
you're
doing.
E
We
just
want
to
see
the
ones
that
have
the
most
reform
and,
let's
see
what
their
insurance
premiums
are.
You
know
that
put
up
the
most
rules
in
front
of
pbms
and
say:
look
you
can
come
to
play,
but
you
just
need
to
play
fair.
That's
all
you
know
it
was.
You
know
a
lot
of
people
like
to
quote
Milton
Friedman
and
say
you
know
he
says:
exchange
of
goods
and
services.
You
know
free
market
capitalism,
it's
what
it's
all
about.
We
all
believe
in
that.
But
the
end
of
that
quote.
G
E
As
long
as
it's
fair
or
plays
fair
or
if
the
exchange
of
benefits
benefit
both
people,
they
don't
want
to
quote
the
rest
of
the
most
famous
capitalists
in
the
country
so
or
in
the
world
who's
passed
now,
but
but
but
I
read
a
lot
of
his
books.
I
really
do
believe.
It's
it's
beyond
the
point
of
wondering
whether
it's
going
to
help
or
not.
But
but
to
answer
your
question.
We
have
large
extensive
studies
that
show
premiums
went
down
and
and
yeah
they
referred
to.
E
You
know
cause,
and
you
know,
hospitals
having
the
ability
to
have
a
monopoly
on
certain
specialty
drugs.
That
is
almost
laughable
really
because
you
know
you
send
a
little
lady,
Miss,
Jones
who's
been
coming
to
me
for
30
years,
and
now
she
can
only
go
to
North
Carolina
to
get
her
mail
order,
and
you
know
you
go
through
enough
of
that,
and
you
know
it's
tough.
So
thank
you
for
bringing
that
up
absolutely.
F
And
if
I
may
just
make
one
more
quick
comment,
hopefully
you
know
back
to
the
the
flyer
that
we
have.
You
know
it's
I,
just
I
I'm
I'm
reading
through
this
interject
state
government
into
private
contracts,
puts
government
in
charge
of
your
health
care.
If
anyone
here
thinks
that
government
is
not
already
in
charge
of
your
health
care
and
all
of
the
regulations
that
we
all
deal
with,
you've
got
I
mean
I.
F
Guess
your
head
is
buried
somewhere
in
the
sand,
because,
and
what
I
see
is
very
important
about
this
bill
is
this
is
a
consumer
protection
that
is
our
job
as
as
government
employees
and
legislators
to
to
protect
our
consumers
to
really
work
hard
to
get
the
the
cost
of
drugs
down
this
deregulates
this
system,
if
you
will
and
untangles
this
level
of
bureaucracy,
this
layer
of
bureaucracy
which
we
are
seeing
is
completely
unnecessary.
So
you
know,
government
Health
Care
is
is
very
complicated.
F
E
Thank
you
very
much
and
I'll
just
say
that
yeah
I've
heard
the
argument
about
messing
with
private
contracts.
That
absolutely
blows
my
mind
away.
If
you,
if
you
understand
Healthcare
at
all,
you
understand
how
many
regulatory
we
can't
charge
certain
services
that
you
do.
We
can
only
charge
a
certain
amount
because
it's
controlled,
okay,
you
know,
and
we
can't
do
certain
things
and
then
before
we
can
do
this
service,
you
know
what
we
got
to
do
another
service
to
get
to
that
service.
E
You
know
what
I'm
talking
about
and
and
and
this
is
all
controlled
by
the
government
and
since
2010
and
Affordable
Health
Care
Act,
we
we,
we
have
had
a
lot
of
control
of
our
government
and
you
know
we
all
were
told
we
were
going
to
have
Hospital
choices
and
Doctor
choices
and
all
that
that
had
it
took
a
long
time
for
that
to
come
around
in
us
to
get
that
to
put
to
where
we
got
more
choices.
So
so
that's
what
this
is
all
about,
and
thank
you
very
much
for
for
bringing
that
up.
C
President
Sheldon,
thanks
for
your
passion
on
this
legislation,
we've
had
multiple
conversations
about
it.
I
want
to
start
by
complimenting
our
co-chairs
on
Gathering
us
today.
Putting
legislation
in
front
of
us.
That's
been
much
talked
about
and
giving
us
a
chance
to
have
these
sort
of
conversations.
I.
Think
all
members
have
a
copy
of
House
Bill
457
in
their
packet.
Do
you
have
a
copy
there?
Handy?
C
C
Section
one
looks
like
primarily
existing
language:
we're
we're
making
a
few
changes
to
existing
Statute
in
304
17A
through
164.
Health
Plan,
meaning
when
we
use
the
word
insured
there
at
the
bottom
of
page.
One
help
us
to
know
who
is
impacted
by
the
legislation.
Is
this
all
insurance
providers
in
the
Commonwealth,
meaning
private
and
the
mcos
and
everybody.
E
Thanks
thanks
Senator
again,
we
intend
for
this
legislation
to
affect
all
pbms
that
do
business
in
Kentucky,
so
anybody
that
would
do
business
with
prescription
coverage
is
going
to
be
affected
by
this
in
some
manner.
So.
C
Whether
you're
in
whether
you're
an
MCO
providing
services
to
privately
insured
or
an
MCO
to
publicly
insured
your
insurance
insured
means
everybody
that
is
an
individual
enrolled
in
a
plan
who
receive
Services
the
next
page.
When
we
look
at
PBM
we're
defining
the
PBM
space
to
mean
what
you
say
here,
which
actually
changes
and
I
looked
I,
don't
think,
there's
a
big
difference
between
the
304
reference
and
the
previous
304
17A,
the
304
9
and
304
17A,
because
current
statute
is
304,
17A
provides
a
definition,
we're
changing
it,
but
I
don't
know
that!
C
C
E
You
know
we
I
think
I
think
our
goal
here
is
when
we're
writing
complicated
sure
legislation
is
that
we
stay
consistent.
Okay,.
E
C
Consistency
question
talk
to
me
about
the
carve
out
here
where
we
say
it
means
this,
except
it
does
not
include
a
PBM
contracted
by
and
acting
under
the
direction
of
any
hospital
or
health
system
that
provides
a
self-insured
plan.
If
the
hospital
or
health
system
owns
a
pharmacy
help
me
to
understand
that
that.
E
Came
about
towards
the
end,
but
now
I
want
to
pre-preface
these
these
answers
and
we
can
go
on
through
the
whole
bill.
If
you
want
by
saying
that
I
feel
like
this
version
is
exactly
the
kind
of
comprehensive
legislation
we
need
there'll
be
some
changes
along
the
way
that
came
up
potentially
and
we
we
inserted
it
towards
the
end
of
writing.
This
part.
This
piece
this
bill
because
we
realized
there
could
be
some
effect
on
federal
dollars
that
were
coming
in
hot.
E
If,
where
we
put
the
exception
as
hospitals
that
have
their
own
Pharmacy,
that
it's
administering
their
own
plan
and
they
were
doing
their
own
thing
and
then
they
have
federal
dollars
that
are
also
coming
in.
We
were
able
to
identify
that
there
may
be
some
issue
in
federal
dollars
coming
in
if
they
were
included
rather
than
me,
get
into
the
deep
weeds
with
them.
I
went
back
to
them
and
just
said:
look
we're
going
to
pull
you
out
anybody
that
gets.
E
E
A
E
C
That's
different
so
toward
the
bottom
of
page,
two,
we
run
out
of
old
language
and
we
start
with
entirely
new
language
on
page
three,
and
it
looks
like
the
rest
of
section
one
mainly
the
new
language
share
with
me.
The
goal
is
this:
a
Level
Playing
Field
concern
about
mail
order
pharmacy
as
it
as
it
impacts
local
pharmacy
I'm
on
the
top
of
Page
Three
right,
and
we
started
a
lot
of
referencing
to
mail
order.
Pharmacy
distribution
is
that
a
Level
Playing
Field
concern
is
that
what
that
is.
E
Yes,
what
it
is
is
they're
mandatory.
It's
not
that
people
can't
use
any
mail
order
or
any
pharmacy.
They
want.
We
never.
We
don't
want
to
take
patient
Choice
away.
What
this
simply
does.
Is
you
can't
force
a
patient
to
go
mail
order
to
your
Pharmacy
that
you
own
or
make
them
force
them
to
go
anywhere?
You
know
you
should
make
an
option
in
our
own
health
plan
here
in
the
state.
We
have
an
option,
but
you
have
to
opt
out.
That's
how
manipulative
this.
E
C
Chairman
I
don't
want
to
belabor,
but
if
I
could
have
just
a
little
bit
more
latitude
I'll
try
to
be
brief.
Sure.
Thank
you.
So
section
two
looks
like
primarily
definitions,
but
it's
it's
a
lot
of
new
language.
In
fact,
all
of
section
two
is
new
language.
Right
definitions
form
the
Crux
of
what
the
legislation
actually
does
so
I,
don't
I,
don't
have
any
major
concerns,
but
that's
a
definitional
sort
of
section
section
three
at
the
top
of
page
seven
is
where
it
starts.
C
It
looks
like
we're
requiring
pbms
to
register
share
with
me
the
goal
about
registering
and
there's
a
network
adequacy
piece
based
on
my
read
through
just
a
moment
ago
there
on
lines
10
through
14
and
maybe
even
higher,
maybe
6
through
14.,
so
we're
going
to
register
them
and
we're
also
going
to
make
sure
that
they
are
adequately
connected.
Is
that
what
we're
doing.
E
Accessibility
certainly
means
that
that
what
we've
found
when
they
start
mandating
these
things
and
saying
well,
you
know
we're
going
to
handle
your
prescription
process,
but
but
you've
got
to
go
here
and
you've
got
to
go
here
many
times
where
they
were
being
forced
to
go,
whether
it
was
mail
order
or
even
another
preferred
network
where
there's
a
pharmacy,
30
40
miles
down
the
road
and
there's
a
local
pharmacist,
two
miles
across
the
street.
So
we
we
addressed
accessibility
because
of
that
very
issue.
E
The
network
make
just
the
rest
of
it
is
more
stuff
that
they
have
to
file
to
make
sure
they
have
an
adequate
Network.
They
have,
they
have
good
things.
So
what
was
the
second
part
of
your
question?
Or
is
that
it
well.
C
I
think
that
was
mainly
the
registering
part
is
new
and
and
I
think
you're.
Simply
wanting
to
have
the
commissioner
determine
that
the
network
is
reasonably
adequate
and
accessible
based
on
the
definition
up,
above
so
I
I
think
I
think
I
understand
your
goal.
There
I'm
on
the
top
of
page,
eight
now
and
I'm
moving
quickly
and
in
respect
for
committee
members
time
it
looks
like
section
four
relates
based
on
my
scribble
notes
here
to
be
PBM:
interaction
with
and
payment
to
pharmacies.
C
So
there's
a
lot
of
concern
and
this
is
I
think
would
you
say
this
is
the
the
heart
of
what
you're
doing?
Is
this
payment
methodology
that
boy?
Oh
boy,
I,
I,
never
I
came
here
12
years
ago
and
never
had
heard
of
Mac
pricing
and
all
the
other
stuff.
That's
involved
in
the
swirl
of
this
until
Senator
wise
introduced
it
all
to
me
and
boy,
oh
boy,
what
a
learning
curve
that
was,
but
I
think
this
section
four
is
I'm
trying
to
understand
it.
E
Well,
there's
a
lot
of
sections
in
this
bill.
This
particular
section
I,
wouldn't
say
it's
the
heart
of
the
bill,
but
it
certainly
is
is
part
a
big
part
of
the
bill
as
you
go
through
here.
In
order
for
the
consumer
to
be
serviced
properly,
it's
going
to
have
to
come
through
the
pharmacy
and
come
through
the
pharmacy.
There
has
to
be
a
network,
accessibility
and
everything
else.
It
takes
to
get
them
to
that
local
pharmacy.
So
so
we
put
in
their
Fair
Contracting
Provisions.
E
You
know
we,
we
tried
to
put
things
like,
and
that's
you've
probably
heard
this
Nationwide,
but
let's,
let's
just
Bowl
this
section
down
to
we
what
needs
to
happen
and
what
for
sure
needs
to
happen
is
the
charge
that
the
consumer
has
to
pay
needs
to
be
what
the
charge
is
at
the
point
of
sale.
It
doesn't
need
to
come
back
retroactively
and
end
up
something
else
currently
as
much
as
40
percent
of
some
prescript
prices
that
a
consumer
pays
is
clawed
back
in
some
degree.
E
C
E
E
From
the
pharmacy
yeah
yeah,
the
consumer
is
actually
paying
higher
in
their
donut
hole
because
of
these
practices.
So.
E
A
I
know
we
want
to
get
in
the
Weeds
on
some
of
this,
but
in
the
interest
of
time,
we're
almost
at
two
o'clock
already
and
we've
got
to
know
a
very
long
presentation
coming
up
as
far
as
what
we're
going
to
see
from
some
of
our
pbms
mcos
and
how
what
goes
on
I
really
want
to
see
where
the
the
dollar
goes
from
the
point
of
the
consumer
going
to
the
pharmacy
and
where
that
money
goes
I
think
if
we
see
some
of
that
it'll
have
a
better
understanding
of
why
some
of
what
we
see
is
in
this
Bill.
A
A
You
absolutely
thank
you
very
much
representative
Kathy.
Thank
you
all
I
think
we've
got
some
folks
that
are
presenting
some
of
remotely
is
my
understanding
correct,
just
one
one
person
remotely
so
those
who
are
here
I
understand
that
I
think
we
have
Antonio,
Cha-Cha
I,
think
he's
he's
online
and
we've
also
got
I
believe
Josh
golden
Justin,
Joseph,
Fred
Barton.
Also,
if
you
all
would
like
to
come
to
the
table
and
please
introduce
yourselves
to
the
record
now,
we
have
a
getting
a
bit
tight
on
time.
A
So,
if
you
can
I
know,
you've
got
a
bit
of
a
lengthy
presentation.
So
if
you
can
I
would
urge
you
to
keep
this
within
20
minutes
and
that
way
we'll
have
a
little
bit
of
time
for
questions
also
from
members
who
might
have
some
questions
on
things
and
again,
whenever
you're
ready,
please
introduce
yourselves
and
begin
your
testimony
right.
B
A
Afternoon,
everyone
Justin
Joseph
pharmacist.
I
Thank
you,
Senator
Alvarado,
to
the
chairs
to
the
members
of
the
committee,
thanks
for
the
opportunity
to
speak
with
you
today,
as
I
said,
I
I'm
with
capital
RX,
which
is
a
PBM,
but
we're
gonna,
explain
how
we
are
a
fundamentally
different
PBM
within
this,
rather
opaque
and
and
complex
landscape.
A
little
bit
about
me
to
provide
some
context
as
to
why
I
felt
the
urge
to
be
here
today
to
speak
in
support
of
PBM
reform
legislation.
I
I
spent
the
past
20
years
prior
to
joining
Capital
RX
as
a
consultant
working
with
some
of
the
largest
most
complex
Benefit
Plan
sponsors
in
the
United
States.
These
were
Fortune
100
companies,
labor
unions,
municipalities,
County
governments,
state
governments,
Etc
in
that
capacity,
I
was
a
PBM
expert,
so
I
helped
them
with
the
procurement
of
PBM
Services,
implementing
new
PBM
Arrangements
negotiating
contracts
with
pbms
and
auditing
those
pbms
as
well.
This
provided
me
with
a
really
unique
window
into
the
business
model
of
the
typical
PBM.
I
You
know
after
20
years
of
this
I
would
suggest.
There's
probably
200
people
in
the
United
States
that
fully
understand
and
from
start
to
finish
how
pbms
derive
their
profitability
and
of
those
couple
hundred
people
there's
probably
a
handful
that
would
be
willing
to
get
up
and
testify
in
a
public
setting
as
to
what
some
of
the
problems
are
with
that
model.
I
I
happen
to
be
one
of
those
people,
which
is
why
I'm
proud
to
be
here
today
to
share
my
expertise
with
you
and
my
experience
and
what
I've
seen
in
an
industry
that
is
fundamentally
flawed
about
my
current
company
Capital
RX
I'm
joined
by
one
of
my
colleagues
from
from
our
organization
as
well
Justin
Joseph,
we
are
by
no
means
a
typical
PBM.
We
were
founded
three
years
ago
by
a
group
of
drug
supply
chain
experts
we're
based
on
a
really
simple
principle
right.
I
It's
that,
in
order
for
a
PBM
to
act
in
the
best
interests
of
patients
and
plan
sponsors,
their
financial
incentives
must
be
aligned
and
they
must
operate
in
a
transparent
manner.
Now,
when
I
say
aligned,
this
is
easy,
no
conflict
of
interest.
There
can
be
no
inherent
conflict
of
interest
in
the
way
the
PBM
does
business
and
when
I
say
transparent,
I
know
that
word
is
used
quite
a
lot
lot
in
the
world
of
health
care,
but
in
the
world
of
Pharmacy
it's
simple:
every
drug
should
have
a
price.
I
That
price
should
be
visible
to
everyone
involved
in
the
transaction,
and
it
should
be
auditable
right.
There
should
be
a
paper
trail.
Unfortunately,
most
pbms
in
the
industry
do
not
operate
on
either
of
these
tenants.
They
they.
You
know,
they
sit
in
a
very
unique
position
within
the
supply
chain.
They
are
a
financial
Hub
which
puts
them
in
a
position
to
derive
hidden
profitability
from
a
vast
array
of
complex
and
opaque
Financial
relationships.
I
think
Senator.
D
I
And
others
have
sort
of
hinted
at
the
inherent
complexity
of
this
that
it
can
seem
overwhelming
to
someone
who's
sort
of
new
to
this
industry
and
I
I.
Grant
you
that
it
is
at
time
seems
almost
intentionally
complex
and
the
way
you
know
it
would
probably
take
me.
I
You
know
a
10
hour
master
class
with
you
all
to
go
through
the
entire
range
of
profit
sources
that
the
pbms
rely
on,
how
they
hide
those
profits,
how
they
derive
those
profits
and
what
you
know
what
portion
of
the
dollar
breaks
up
in
each
of
those
profit
pools,
and
so,
instead
of
instead
of
you
dragging
you
through
all
that
I'll
try
to
summarize
some
of
the
key
elements
of
the
PBM
model
that
are
broken
number
one:
the
use
of
proprietary
price
lists
to
manipulate
the
cost
of
drugs
reference
Mac
lists
earlier.
I
This
is
one
example
of
that
type
of
list.
This
is
the
PBM
acting
as
price
manipulator,
right
and,
in
essence,
managing
two.
So
two,
two
different
price
lists,
one
that
they
reimburse
pharmacies
and
one
that
they
charge
patients
and
plan
sponsors.
Those
two
ledgers
do
not
have
to
match
in
the
current
ecosystem,
and
it's
between
those
two
ledgers
that
the
PBM
can
hide
what's
commonly
referred
to.
As
spread
pricing,
ppms
will
steer
patients
towards
profit-driven
mail
order
and
Specialty
pharmacies
that
they
own.
We
casually
refer
to
this
as
steerage.
I
This
happens,
even
if
the
patients
may
be
able
to
obtain
those
drugs
at
a
lower
cost,
perhaps
locally
at
a
retail
pharmacy,
and
they
quietly
retain
millions
and
millions
of
dollars
in
rebates
from
pharmaceutical
companies.
Unfortunately,
the
media
and
the
forward-thinking
government
officials,
such
as
yourselves,
are
starting
to
shine
a
light
into
the
black
box
that
PBM
sit
in,
and
we
we
applaud
that
we're
one
of
very
few
pbms
I,
think
that
would
stand
up
and
applaud
that
effort.
I
This
is
this
is
because
we
are,
in
a
nutshell,
a
successful
case
study.
Our
organization
is
a
case
study
of
how
you
can
do
business
differently
within
an
entrenched
opaque
industry,
like
PBM
I'm,
going
to
explain
how
we
do
that,
because
I
think
it
presents
a
model
upon
which
You
may
wish
to
consider.
I
As
you
work
to
craft
and
refine
PBM
reform
legislation,
but
at
the
heart
of
it
all,
is
no
spread
pricing,
a
full
transparency
and
pass
through
around
the
rebate
Revenue
that
we
receive
on
behalf
of
patients
and
plan
sponsors
and
our
entire
retained
Revenue
isolated
to
a
fair
admin
fee.
That's
out
on
the
table
for
the
client
to
see
this
is
truly
the
epitome
of
a
Cost
Plus
model.
I
I
I
refer
to
this
as
a
straw
man,
because
we've
got
a
lot
of
anecdotal
evidence,
a
lot
of
data
within
our
own
book
of
business.
That
frankly,
proves
this
flat
out
wrong.
Okay,
we
are
a
fast-growing
PBM.
It
is
because
of
our
model.
It's
a
testament
to
the
fact
that
this
is
where
the
industry
wants
to
go.
This
is
where
plan
sponsors
largely
believe
they
should
be
going.
We
have
over
180
clients
on
board
we
service
over
a
million
lives.
I
The
pattern
we
saw
was
clear:
it
was
a
decrease
invoice
to
invoice
and
the
cost
that
they
were
incurring
an
increase
in
the
rebates
that
they
were
receiving
and
a
total
reduction
in
net
cost.
Now
it
varied
from
client
to
client
right,
but
the
range
was
between
15
and
25
percent
was
the
typical
range?
I
That's
a
invoice
to
invoice
cost
reduction
from
year
over
year.
This
is
Meaningful.
This
is
helping
plan.
Sponsors
maintain
a
sustainable
benefit.
Now
I
want
to
be
clear:
we're
not
anti-profit
we're
a
for-profit
company.
Okay,
what
we
are
is
a
company
that
acknowledges
that
how
a
PBM
makes
their
money
can
impact
their
behavior.
Let's
look
at
a
quick
example
of
that.
We
talk
about
the
retention
of
rebates
right.
I
Well,
you
know
pbms
retain
some
unknown
portion
of
rebates,
and
part
of
that
is
veiled
in
obscurity
right,
it's
hard
for
us
to
even
discern
what
a
rebate
is
for
a
given
drug
pbms
will
at
times
stand
up
and
say
well.
Who
cares
right
we're
retaining
the
rebates
we're
using
it
to
offset
our
administrative
costs
and
thereby
charging
a
lower
ab
and
fee
to
the
plan
sponsor
right?
So
everyone
wins
well
what
it
doesn't
acknowledge.
What
that
argument
doesn't
acknowledge
is
the
way
the
rebate
retention
can
influence
the
way
the
PBM
behaves
and
I'll.
I
Give
you
an
example
here
with
a
drug
called
duxis,
which
has
been
around
for
a
while.
Pharmacists
may
be
familiar
with
this
drug
It's,
a
combination
of
two
over-the-counter
products,
Pepcid
AC
and
ibuprofen
right,
it's
actually
Advil
and
Pepcid.
The
active
ingredients
in
those
were
combined
into
a
single
pill
for
convenience
and
that
pill
was
released
by
a
brand
manufacturer
at
a
price
north
of
two
thousand
dollars
per
month.
I,
don't
know
if
any
of
you
have
purchased
Advil
or
Pepcid
lately,
but
I
can
stock,
both
of
them
in
my
medicine
cabinet,
for
under
20.
I
A
month
now,
pbms
often
say
that
their
responsibility
is
to
their
plan
sponsor
and
that
their
goal
is
to
help
their
plan
sponsor
manage
costs
over
time.
So
clearly,
no
PBM
in
the
right
mind
would
favor
this
drug
on
their
preferred
list
of
drugs.
Their
formulary
right
right,
well,
common
sense
is
not
so
common
in
the
PBM
industry
at
one
point
or
another,
every
major
traditional
PBM
has
included
do
access
on
their
formulary.
This
means
they
weren't
only
approving
it.
They
were
actively
steering
patients
towards
this
product.
I
I
We
talked
about
some
previous
presentatives
have
talked
about.
Steerage
I
want
to
make
it
clear.
Capital
RX
is
a
successful
PBM
doing
business
without
owning
or
profiting
owning
a
mail
order,
pharmacy
or
profiting
from
the
dispensing
of
drugs.
We
believe
this
to
be
an
important
tenet
once
you
acknowledge
that
the
PBM
is
allowed
to
profit
from
the
dispensing
of
drugs,
what
you're
saying
is
that
it's
okay
for
their
profit
to
be
died
to
the
price
and
the
volume
of
drugs.
Now,
what
Financial
incentive
does
that
PBM
have
over
time?
I
I
Now
there
are
a
number
of
other
aspects
that
I
could
go
into
I'm,
a
self-proclaimed
geek,
if
you
will
on
drug
pricing
on
the
PBM
industry,
happy
to
answer
questions,
I'll
I'll
highlight
one
or
two
sort
of
nuances
that
may
come
up
in
discussion
over
the
course
of
over
the
course
of
consideration
of
this.
This
you
know
this
legislation.
One
is
around
nadak
pricing,
so
nadak
is
the
pricing
Benchmark
that
we
as
a
PBM
have
elected
to
use
as
the
Baseline
for
reimbursement
to
pharmacies.
This
is
a
fair
acquisition
cost
index.
I
It's
used
actually
in
many
State
Medicaid
programs
across
the
country.
It
is
a
tested
Baseline
for
drug
pricing
and
layered.
On
top
of
that
is
a
fair
dispensing
fee
for
the
pharmacy.
What
this
does
is
this
stabilizes
reimbursement
across
pharmacies,
and
it
creates
a
more
consistent
price
experience
for
the
patient.
Compare
that
to
the
current
prevailing
system
of
Mac
lists
and
average
wholesale
price
with
most
pbms
and
you'll,
find
that
that
system
creates
a
highly
volatile
price
experience
for
the
patient
month
to
month.
I
I
know
this
I
I
I'm
on
my
wife's
Benefit
Plan,
which
is
not
with
our
company.
Unfortunately,
and
I
go
to
get
a
generic
drug
one
month.
It's
thirty
dollars
the
next
month,
it's
75
at
the
pharmacy
and
I've
actually
confronted
my
pharmacist
about
this
and
I've
asked
him.
I
said
what
gives
why
is
it
more
than
twice
as
much
this
month?
I
The
answer
to
the
pharmacist
is
telling
that's
just
what
the
PBM
told
me
to
charge
you
that's
the
that's,
perhaps
the
the
sort
of
biggest
absurdity
of
the
PBM
pricing
world,
and
that
is
if,
if
you
look
at
how
things
should
work
within
a
free
market,
take
over-the-counter
drugs,
for
example,
right
perfect
example
of
a
free
market
economy
at
work,
a
patient
goes
into
a
store,
looks
for
the
over-the-counter
drug.
They
pull
it
off
the
shelf.
There's
a
sticker
price
on
there.
The
price
is
displayed
clearly
for
that
product.
That
patient
can
go.
I
Compare
that
price
against
what's
down
the
street
at
the
local
grocery
store
or
the
other
Pharmacy
across
the
street,
and
that
pharmacist
that
person
managing
the
pharmacy
is
held
to
competitive
pressure,
to
make
sure
that
that
price
is
Market,
competitive
or
else
the
patient's
just
going
to
go
elsewhere.
Right.
That's
why,
over
time
we
see
over-the-counter
costs
go
down.
Otc
drug
costs
have
generally
a
deflationary
trend.
I
Compare
that
to
the
experience
the
member
has
when
they
walk
10
Paces
back
and
go
to
the
pharmacy
counter.
Suddenly
It's
a
roulette
wheel.
That
patient
has
no
idea
what
they're
going
to
be
charged
and
here's.
The
other
bizarre
element
that
patient
getting
the
exact
same
prescription
for
the
exact
same
drug
as
the
patient
line
behind
them
may
be
charged
a
radically
different
price
price.
I
Discrimination
is
what's
going
on
here
and
price
manipulation,
and
it's
simply
because
that
retailer
is
not
allowed
to
operate
in
a
free
market
process
free
market
system,
because
their
pricing
is
essentially
imposed
by
the
PBM.
I
So
again,
under
our
model,
it's
Cost
Plus
both
for
us
in
terms
of
how
we
derive
profitability
and
the
way
that
we
reimburse
pharmacies.
We
are
a
case
study
example
that
that
can
be
successful
in
our
industry.
As
I
said,
our
growth
is
a
testament
to
that,
as
is
the
experience
that
our
clients
have
as
they
come
on
board
and
experience,
a
cost
decrease,
and
so
I'll
pause
there
and
welcome
Justin
to
add
any
comments.
I'm.
A
D
D
So,
as
I
said
at
the
odd
Set,
my
name
is
Antonio
Chacha
I'm,
the
president
of
three
access
advisors,
CEO
of
46,
Brooklyn
research,
I
spent
about
10
years
at
the
Ohio
pharmacist
Association,
where
I
heard
very
similar
complaints
from
local
pharmacists
around
the
lack
of
objectivity
and
sustainability
of
PBM
reimbursement.
So
understand
that
my
entry
into
this
world
is
very
much
tainted
by
the
lens
with
which
I
viewed
it
at
its
onset.
D
But
today
we
we
now
do
drug
pricing
analytics
because
much
like
a
story
that
you
all
are
very
familiar
with.
D
My
background
was
journalism
before
I
got
to
the
pharmacy
world
and
I
found
it
just
absurd
that
we
complained
so
much
about
Rising
costs
of
prescription
drugs.
Yet
we
had
no
idea
that
a
that
an
intermediary
who's
just
processing
the
claim
could
slap
over
six
dollars
in
Hidden
markups
on
the
transaction
at
just
one
stage
of
their
involvement
in
that
transaction.
D
So
I
left
a
pharmacist.
Association
I
started
46
Brooklyn
research,
which
is
a
non-profit
dedicated
to
giving
drug
pricing
data
away
for
free
Medicaid
data
Medicare
data
looking
at
Trends
without
brand
manufacturers
change
prices
annually.
When
we
launched
that
organization
it
was
intended
to
be
something
that
I
did
between
the
hours
of
9
pm
and
12
A.M.
D
We
were
bombarded
out
of
the
gate,
and
so
we
launched
a
consulting
firm
where
today
we
do
work
for
Medicaid
fraud,
control
units,
government
agencies,
State
Attorneys
generals,
provider,
groups,
research
firms,
technology
companies,
law
firms,
investment
analysts
and
yada
yada.
So
let's
talk
about
the
field
of
play.
First
and
I
know
this
hearing
is
kind
of
targeted
pbms,
but
I
think
it's
really
important
to
understand
the
fundamentals
of
the
drug
Channel.
D
As
a
holistic
entity
and
Senator
Alvarado
I
know
you
mentioned,
you
want
to
kind
of
be
able
to
carve
up
where
that
dollar
goes,
I
will
throw
a
little
cold.
Water
on
your
aspirations
is
that
it
is
not
that
easy
to
obtain,
because
all
of
these
contracts
are
in
particular
programs
that
have
their
own
private
negotiations,
and
a
lot
of
this
is
under
lock
and
key,
but
I
will
do
my
best
to
try
and
get
you
to
where
you
want
to
be
at
least
as
close
as
I
can
get
you.
D
But
let's
recognize
here
that
we
have
five
primary
players
in
the
drug
distribution.
Channel
drug
manufacturers
sell
drugs
to
wholesalers
who
sell
drugs
to
pharmacies
who
get
compensated
by
pbms
on
behalf
of
insurance
companies.
There
are
other
intermediaries
along
the
way
happy
to
have.
You
know
a
wonderful
conversation
around
gpos,
PSAs
repackages
at
rebate,
aggregators
benefits
Consultants,
but
we
only
have
so
much
time.
D
The
thing
that
I
will
point
out
and
I
think
this
is
one
of
the
most
important
things
to
understand
is
that
those
main
Five
Pillars?
We
typically
talk
about
as
if
they
are
Standalone
entities,
but
if
you
look
at
the
top
of
the
Fortune
50
list,
you
have
pharmacies,
you
have
wholesalers,
you
have
Farm,
you
have
manufacturers,
you
have
pbms
and
you
have
health
insurance
companies
and
sometimes
the
same
company
can
be
four
of
the
five.
So
when
you
talk
about
hey
how
profitable
is
this
entity
versus
another?
D
You
must
recognize
that,
because
vertical
integration
complicates
the
waters,
it
can
be
very
hard
to
ascertain
truly
what's
happening
at
an
individual
level,
because
we're
dealing
with
Health
Care
monoliths
at
this
time,
not
just
Standalone,
pbms
or
Standalone
pharmacies
or
Standalone
wholesalers,
Etc
and
while
every
single
member
of
the
drug
distribution
Channel,
whether
they're,
smaller
independent
players,
like
my
good
friend
representative
Bentley
over
there,
or
they
are
publicly
traded
members
of
those
drug
distribution
channels.
D
We
have
to
acknowledge
and
accept
the
fact
that
every
layer
of
the
drug
distribution
channel
has
a
profit
incentive
for
those
that
are
publicly
traded.
It
is
their
fiduciary
obligation
to
make
more
money
this
year
than
they
did
last
year
and
make
more
money
next
year
and
so
on
and
so
on.
This
is
okay,
but
it's
it's
not
because
it's
wrong
profit
is
not
wrong,
but
we
have
to
understand
that
profit
is
going
to
be
the
motivating
factor
that
will
drive
drug
supply
chain
behavior
and
in
our
efforts
to
Control
prescription
drug
costs.
D
We
must,
as
Josh
just
said,
have
a
proper
calibration
of
incentives
in
order
to
assure
efficient
spending
and
maintain
robust
access
to
Pharmaceuticals.
So,
let's
start
with
the
very
very
top.
What
is
the
price
of
a
drug?
Well,
that
depends.
There
are
a
lot
of
different
ways.
The
drug
pricing
nerds,
like
myself,
could
tell
you
what
the
price
of
a
drug
is,
and
you
could
quantify
price
in
a
variety
of
different
ways
at
every
stage
of
its
drug
distribution,
and
even
when
you
pinpoint
we
want
to
talk
about
this
price,
that
price
may
not.
D
D
That's
because
drug
prices
in
a
purchasing
perspective
are
hidden,
they
are
set
by
private
deals.
Backroom
negotiations
that
don't
necessarily
lend
itself
to
an
inefficient
Market
instead
ends
up
creating
price
discrimination,
as
Josh
just
pointed
out.
Well,
it
also
means
that
drug
prices
can
be
incredibly
prone
to
manipulation.
D
D
Pbms
were
brought
in
first
to
just
to
the
simple
Act
of
facilitating
the
transaction,
but
over
time
we
relied
on
them
more
and
more
to
act
as
a
necessary
friction
against
drug
makers,
wholesalers
and
pharmacies
and
other
members
of
the
supply
chain
who,
as
I
just
pointed
out,
have
a
profit
incentive
left
to
their
own
devices.
We
should
trust
that
they
will
try
to
maximize
as
much
money
as
they
could
get
their
hands
on.
D
So
today,
pbms
will
advertise
that
they
are
the
only
entity
in
the
drug
Channel,
working
to
Control,
prescription,
drug
costs,
but
data
that
we
have
uncovered
data
that
other
state
Auditors
have
been
covered
and
so
on,
and
so
on
show
that
pbm's
profit
distortions
have
become
incredibly
undermining
to
their
initial
charge
of
Simply
working
to
control
the
cost
of
drugs,
because
now
they're
making
money
off
the
cost
of
drugs.
D
So
what
we
do
know
is
that
prices
continue
to
go
up
on
a
year
by
year
basis,
the
last
few
years
we're
looking
at
Brand
prices
go
up
to
the
tune
of
around
five
percent
four
to
five
percent
every
year.
That's
list
prices,
though,
if
you
look
at
the
discounts
that
pbms
and
other
intermediaries
are
capturing
on
those
on
those
drugs,
you'll
actually
find
that
in
many
instances,
net
prices
of
pharmaceuticals
are
actually
going
down.
D
Well,
it's
hard
to
actually
figure
out
whether
or
not
that's
true,
because
a
lot
of
these
deals
are
again
behind
lock
and
key,
because
these
manufacturer
rebates,
two
pbms
insurers
and
little-known
middlemen,
now
known
as
rebate
aggregators,
because
they're
confidential
and
very
widely
from
plan
to
plan,
it's
extremely
hard
to
figure
out
the
actual
price
of
a
drug.
D
Now,
let's
not
just
blame
pbms
and
insurance
companies,
because
government
programs
like
the
Department
of
Veterans,
Affairs,
State
Medicaid
programs,
because
they
were
acquired
by
law
to
get
the
best
rebates
in
the
market.
What
ends
up
happening
is
that
anytime,
somebody
gets
the
best
price.
Everybody
else
is
paying
a
worse
price,
and
so
patients
who
are
underinsured
or
or
not
insured
end
up
picking
up
a
disproportionate
share
of
the
overall
cost,
and
that
includes
employers
as
well,
and
because
each
Health,
Plan
and
PBM
promotes
coverage
of
different
drugs,
preferring
some
drugs
over
others.
D
Making
Apples
to
Apples
comparisons
from
one
PBM
reality
to
another
is
very,
very
difficult.
Regardless
of
any
of
this,
there
is
a
extreme
inability
to
objectively
determine
what
a
fair
price
for
a
drug
should
be
for
a
conventional
plant
sponsor
and
because
of
that,
we
don't
have
traditional
Market
forces
that
pressure
supply
chain
margins.
D
That's
because
the
system
is
built
on
fake
prices.
The
list
prices
for
pharmaceuticals
are
wildly
over
inflated
to
their
actual
cost.
Pbms
use
those
list
prices.
What
we
in
the
industry
call
average
wholesale
price,
but
we
also
jokingly
refer
to
as
ain't
what's
paid,
they
use
awp
as
the
basis
for
their
pricing
guarantees
both
when
they
pay
pharmacies
and
build
plan.
D
Sponsors
brand
drugs
have
high
awps
that
are
offset
by
essentially
200
billion
dollars
in
in
concessions
that
we
call
rebates,
formulary
access
fees,
Kickbacks
whatever
you
want
to
call
them
that
actually
make
the
net
prices
that
manufacturers
bring
in
much
lower.
But
generic
drugs
also
have
high
awps
that
in
no
way
reflect
the
actual
prices.
Pharmacies
pay
to
acquire
those
drugs
in
both
regards
the
real
prices,
the
actual
amounts
of
those
of
those
of
those
drugs.
The
real
prices
are
completely
hidden
from
the
plan
sponsor
and
the
patient.
D
So
those
who
who
claim
to
provide
savings
on
prescription
drugs
are
often
quantifying
the
value
of
those
savings
based
on
those
bogus
artificially
inflated
list
prices
that
are
born
out
of
the
industry
dysfunction,
and
so
here's
the
Fallout
of
that.
This
is
a
very
simple
old,
boring
bottle
of
generic
dexium,
where
it
costs
pharmacies
on
average,
around
17
to
20
dollars
to
actually
put
it
on
the
Shelf.
As
Josh
mentioned,
they
use
a
benchmark
called
nadak.
Some
states
like
Alabama
in
my
home
state
of
Ohio,
starting
actually
at
the
end
of
this
week.
D
They
force
pharmacies
to
disclose
what
they
pay
to
purchase
their
medications,
and
then
they
use
that
Benchmark
as
the
basis
for
cost,
rather
than
allowing
the
the
PBM
to
just
in
vet
whatever
that
price
is,
when
you
look
at
the
actual
price
of
the
actual
cost
for
a
old
bottle
of
generic
Nexium,
again
you're
looking
at
around
twenty
dollars
for
a
90
count
bottle.
Compare
that
to
the
awp,
which
is
the
basis
of
the
pricing
in
the
PBM
contract,
with
the
plant
sponsor
you're,
looking
at
something
that
is
47
times
more
expensive.
D
D
I
believe
Kentucky
is
in
the
on
Deck
Circle
at
some
point
as
well
when
it
comes
to
those
settlements,
but
we're
talking
about
the
first
settlements
ever
against
pbms
and
health
insurance
companies
over
over
charges
in
Medicaid
Managed
Care
programs.
This
Reckoning.
This
accountability
is
really
fresh
and
we're
just
at
the
very
beginning
stages
of
it,
because
our
systems
of
accountability
have
not
evolved
to
the
degree
of
the
sophistication
of
the
vertically
Integrated
Health
insurer,
PBM
Enterprise
Ohio's,
not
alone,
Kentucky's,
not
alone.
D
If
you
could
burn
a
chart
into
your
brain,
this
is
how
significant
spread
pricing
can
become.
We
got
data
from
450
pharmacies
in
the
state
of
Michigan,
which
is
reflected
by
the
green
line
in
this
chart.
The
Blue
Line
represents
the
nadak
and
the
Orange
Line
represents
what
Michigan
Medicaid
was
charged
for
the
exact
same
prescriptions
over
essentially
a
two-year
period
And.
As
you
can
see,
the
cost
of
the
drugs
are
going
down,
the
pharmacy
margins
are
going
down
and
the
PBM
spreads
are
going
up
exponentially.
D
That's
not
to
say
the
pbms
are
providing
a
service,
but
you
have
allowed
them
that
you,
but
payers
in
general
have
allowed
them
to
essentially
say
whatever
the
cost
of
the
drug
is.
Could
you
imagine
how
absurd
a
system
would
be
if
we
went
to
Walgreens
or
Kroger
or
even
an
independent,
Pharmacy
and
said
our
system
will
be
designed
in
such
a
way
that
we
will
pay
whatever
those
pharmacies
bill
us
right?
That
would
be
absolutely
absurd.
D
Well,
now
that
pbms
make
money
off
transactions
exactly
like
pharmacies,
do
you
should
look
at
it
as
equally
as
as
absurd
to
Simply
pay
whatever
Bill
a
publicly
traded
company
forwarded
you.
So,
let's
look
at
the
Fallout
of
fake
prices,
as
I
mentioned
before.
We
have
really
high
list
price
drugs
that
are
offset
by
really
really
big
discounts
well
understand
that
the
exposure
to
the
list
price
is
going
to
be
a
sliding
scale.
Medicaid
programs
are
mandated
to
get
the
best
discounts
in
the
market.
Then
you'll
have
the
federal
government.
D
Looking
at
it
they're
saying
look,
we
only
got
50
bucks
for
this
drug.
You
know
why
isn't
the
patient?
Why
isn't
the
employer
getting
that
price?
It's
because
of
the
convoluted
nature
of
our
system,
where
money
can
just
flow
in
ways
through
broken
Plumbing
Systems,
and
so
we
did
an
analysis
for
small
employers.
We
looked
at
their
total
aggregate
spending
on
brand
name
drugs
in
the
year
2018.
They
allowed
us
to
aggregate
the
data
for
the
purposes
of
public
education.
D
This
group
of
small
employers
paid
110
million
dollars
on
brand
name
drugs
in
2018.
On
that
spend
we
identified
only
5
million
dollars
in
rebates
of
the
small
self-insured
employers
got
thanks
to
the
availability
of
public
data.
We
could
see
that
the
best
commercial
plans
were
getting
the
equivalent
of
30
million
dollars
on
those
same
drugs.
D
So
what
happened?
Those
plant
sponsors
were
not
given
the
benefit
of
those
discounts.
The
degree
that
larger
employers
and
federal
government
purchasers
were
this
is
again
taking
advantage
of
a
lack
of
sophistication
or
a
lack
of
Leverage
of
our
smallest
payers.
Our
mom-and-pop
businesses,
who
are
paying
for
employee
employee
benefits,
but
are
not
given
the
full
benefits
of
the
concessions
that
drug
makers
are
getting
Mr.
A
Chacha
I'm
going
to
interrupt
real
quickly,
I'm
going
to
ask
I
know:
you've
got
a
lot
more
slides.
We
have
one
more
presenter
and
we
have
very
limited
time.
So,
if
you
might
want
to
pick
out
for
the
slides
that
are
coming
up,
real
quick
highlights,
because
we
want
to
give
Mr
Barton
an
opportunity
to
talk
about
his
slides
as
well.
D
Absolutely
very
very
much
apologize
for
the
overrun.
What
I
would
just
say
at
a
very
broad
level
whether
it's
traditional
spread
pricing,
where
pbms
are
paying
low
billing
High
pocketing
the
difference,
forcing
patients
to
get
expensive
branding
medications
when
generics
exist
or
overpaying
for
prescription
drugs
that
are
predominantly
dispensed
to
the
pharmacies
they
own.
D
So
even
the
Brokers
and
Consultants
who
are
operating
in
this
space
are
not
always
going
to
be
your
best
friend
your
job
as
lawmakers
as
accountability.
Experts
on
behalf
of
taxpayers
is
to
ensure
that
the
incentives
are
properly
aligned
and
that
ultimately
you're
getting
the
best
bang
for
your
buck.
Unconflicted
pbms
insurance
companies,
Etc
and
unconflicted
benefits
Consultants,
making
sure
that
you
get
that,
rather
than
having
the
ramifications
of
the
bad
side
of
conflicts,
is
ultimately
what's
going
to
reduce
your
overexposure
to
inflated
drug
costs.
With
that,
thank
you
very
much.
A
Thank
you
very
much.
I
appreciate
that
Mr
Barton.
If
you'd
like
to
go
ahead
and
present
your
information,
yes,.
J
J
There
we
go
okay,
well,
I'll,
try
to
be
as
brief
as
possible
here,
but
I
think
that
maybe
this
this
will
kind
of
bring
some
light
to
some
of
the
examples
that
have
been
brought
up
today.
You
know
by
my
fellow
panelists,
so
kind
of
what
I've
been
advised
to
do
today
is
basically
present
to
you,
as
if,
as
if
you
are
the
employer
and
and
bring
real
life
examples
kind
of
that.
J
We
see
here
in
the
state
of
Kentucky
on
some
analysis
and
some
of
the
gamesmanship
that's
played
within
the
PBM
traditional
PBM
space
so
quickly
you
know
kind
of
where
msodrx
started.
We
are
a
PBM
that
is
actually
headquartered
here
in
the
state
of
Kentucky.
J
Basically,
there's
a
coalition
of
pbgh
40
jumbo
employers
that
represent
21
million
Americans,
and
they
have
350
billion
dollar
in
healthcare
spending
every
year.
This
is
a
coalition,
a
non-profit
Coalition
of
jumbo
employers
that
are
out
to
fix
Health
Care
they've
been
around
for
about
30
years
and
when,
within
the
last
five
to
six
years,
they've
really
been
focused
on
Pharmacy
spend
the
reason
being
that's
the
highest
rising
cost
in
health
care.
J
As
many
of
you
may
know
and
kind
of
how
we
came
to
be,
was
this
group
continued
to
try
to
find
new
ways,
new
strategies
and
new
implementing
new
solutions
to
to
reduce
their
Pharmacy
spend,
and
they
ultimately
realized
that
they
were
continuing
to
be
unsuccessful,
mostly
because
they
had
the
blockade
of
the
traditional
PBM
in
their
way,
and
so
they
decided
to
bring
a
market
driven
solution
to
the
to
the
market
and
not
to
Amazon.
Rx
is
one
more
thing
is
that
we
are
a
public
benefit
Corporation.
J
So
you
know
a
lot
of
times.
We
say
ultimately
the
traditional
pbms
that
they're
for-profit
companies
right
and
ultimately
they're
just
doing
their
job
and
they're
doing
a
really
good
job
of
their
job.
They're
they're,
doing
fantastic
right.
Their
their
job
is
to
continue
to
make
more
and
more
money
for
their
shareholders
and
they're
doing
so
every
year
and
they're
going
to
find
new
and
innovative
ways
to
continue
to
do
so
unless
policy
or
a
market-driven
solution
is
brought
to
the
market.
J
So
we
we
set
out
when
we
were
creating
the
foundation
of
insan
RX.
We
did
not
want
to
become
part
of
that
same
Trend,
so
we
designate
ourselves
as
a
public
benefit
Corporation.
Therefore,
that
allowed
us
to
not
only
prioritize
our
shareholders,
but
also
to
prioritize
our
clients
and
our
members.
J
So
again,
I
as
as
I
stated,
we
are
a
PBM
that
is
headquartered
here
in
Kentucky
I'm,
a
local
Kentucky
and
myself.
I
went
to
the
University
of
Kentucky
pharmacy
school
and
so
we're
gonna
do
a
little
bit
of
a
case
study
here
on
on
the
kehp
Kentucky
employee
health
plan.
So.
Currently
kehp
is,
as
Anthony
stated,
with
with
CVS
Caremark
is
their
PBM.
J
J
So,
as
as
kind
has
been
stated,
Caremark
is
requiring
members
of
the
kehb
plan
to
fill
prescriptions
through
mail
order
and
through
specialty
that
that
have
to
go
through
CVS.
So
those
prescriptions
have
to
be
filled
through
those
those
pharmacies
and
therefore
those
prescriptions
that
could
be
filled
within
the
state
are
actually
being
forced
out
of
the
state.
So
that's
both
revenue
and
jobs
going
out
of
the
state.
J
Also
historically
PBM
say
you
know,
we're
the
biggest
right,
we're
the
biggest
we're
the
best
you're
a
big
employer
group.
We
can
use
our
size
and
your
size
to
give
you
the
best
prices
on
medications.
However,
we
know
that
that's
different
and
I'm
going
to
show
you
some
examples
here.
J
So
here's
example
number
one.
This
is
kehps
for
2021,
their
top
20
drug
of
their
top
25
millions
and
millions
of
dollars
spent
on
this
medication.
This
is
a
medication
that
can
be
acquired
for
since
a
pill,
so
this
first
capsule
that
you'll
see
here
this
is
for
a
90-day
Supply,
the
top
number
there
that's
for
your
standard
discount
card.
Anybody
with
no
insurance
could
go
out
to
a
online
GoodRx
and
single
care
website
and
find
this
price
for
a
medication
at
a
pharmacy.
So
this
is
a
pharmacy.
J
That's
willing
to
give
this
medication
at
a
90-day
supply
for
6.91.
If
you
were
to
do
that
same
search
through
CVS,
you
could
find
that
medication
for
107.48
cents,
so
CVS
has
a
little
more
power
to
kind
of
you
know:
they're
not
going
to
take
the
lowest
the
lowest
price,
and-
and
you
know
some
of
the
Independents
are
more
willing
to
cut
their
margins
and
then
finally,
the
Caremark
pricing
here.
So
that
is
what
members
would
be
responsible
for
or
sorry.
A
I
interrupt
I
want
to
make
sure
everybody
understands
what
we're
talking
about
here.
So
you're
saying
that
if
you
were
just
had
a
prescription
from
a
random
doctor
and
had
a
discount
card
that
any
of
us
could
go
outside
of
our
insurance
plan
and
get
this
for
691
for
90
day
plan.
But
if
we
do
it
through.
But
if
we
yeah
through
good
or
if
we
do
it
through
the
our
insurance
we're
being
charged.
290.74.
A
Yeah
I
think
everybody
needs
to
make
sure
that
everybody
here
is
aware
of
that's
what
the
employee
health
plan
for
our
state
that
provides
a
lot
of
this
for
our
teachers
for
every
employee.
You
can
imagine
within
kehp.
That's
how
much
more
money
is
being
spent
for
one
prescription
multiply
that
by
over
how
many
people
are
being
prescribed
this
medication
out
there,
that's
the
kind
of
abuse
that
we're
seeing.
Thank
you.
J
Sorry
to
interrupt
and
that's
a
market
Standard
right,
that's
not
a
kehp
thing.
That's
that's
market
Standard!
That's
what
CVS
Caremark
does
and-
and
the
other
thing
to
point
out
here
is
is
this-
is
the
ACA
mandated
drug?
So
so
patients
are
paying
nothing,
they
don't
care
right,
they
don't
care
how
much
it's
costing
the
employer
so.
J
And
here's
another
example,
so
this
one
is
a
specialty
medication.
It
is
required
to
go
through
CVS
specialty
so,
and
that's
just
why
we
call
this
out
here
so
CVS.
This
drug
cannot
go
anywhere
else
for
a
member,
that's
on
Caremark
for
kehp,
and
you
can
see
again.
This
is
a
46
times
difference
of
what
you
can
get
for
a
discount
card
versus
what
the
employer
is
paying
today,
and
this
is
just
a
30-day
Supply.
J
A
couple
other
things
I
want
to
call
out
here,
so
these
are
some
trend
lines
for
kehp
over
the
the
last
several
years.
As
you
can
see,
the
generic
percent
of
scripts
is
going
down
as
Anthony
talked
about
earlier
and
I
believe.
My
fellow
colleagues
here
also
talked
about
a
lot
of
times.
This
is
because
formularies
are
designed
to
drive
patients
to
branded
drugs,
even
though
there
might
be
a
therapeutic,
cheaper,
alternative
out
there
on
the
market.
J
They
are
designing
their
formulary
to
drive
patients
to
these
higher
cost
drugs
and
requiring
them
to
get
those
drugs,
and
what
that
does
is
it
allows
the
PBM
to
collect
part
of
that
rebate
and
make
money.
So
you
know
they'll
often
say
it's
lowest:
net
cost
and
and
they'll
tell
you
know
the
employer.
Look
how
great
it
is
we're
getting
you
all.
This
rebate,
But,
ultimately,
there's
a
generic
out
there
on
the
market
that
is
much
cheaper
and,
in
the
long
run,
would
save
much
more
money
for
the
employer.
J
And
I
can
roll
through
this
slide,
but
basically
what
we're
trying
to
get
across
here,
APW
discounts,
so
in
a
PBM
contract
so
year
over
year.
Apw
discounts
should
be
getting
better
and,
as
you
can
see,
that's
just
not
the
case.
So
when,
when
CVS
put
out
a
bid
for
the
khp
business,
they
would
have
gotten
a
bid
and
there
would
have
been
a
guarantee
that
the
awp
discounts
are
getting
better
year
over
year
and,
as
you
can
see,
that's
that's
what's
being
reported
here.
J
J
So
this
is
an
actual.
These
are
some
data
points
actually
pulled
out
of
a
true
RFP
for
an
employer.
So
what
it's
showing
here
is
these
are
all
the
different
revenue
streams
or
savings
opportunities
that
Pharma
is
given
to
the
PBM
right.
So
all
of
these
are
different
ways
for
the
PBM
to
to
contract
savings
from
Pharma
that
we
think
should
be
passed
on
to
the
employer.
J
Unfortunately,
what's
really
only
happening
is
the
PBM
will
say
we're
passing
on
100
rebates
to
the
employer,
but
really
what
they're
only
passing
on
is
the
true
definition
of
rebates
right.
So
there's
all
these
other
fees
that
are
savings
from
Pharma
that
is
truly
part
of
the
rebate
but
they're,
just
not
calling
it
out
like
that
in
the
contract,
and
so
it's
part
of
that
opaqueness
and
that
black
box.
J
You
know
we
understand
that,
there's
a
lot
of
work
that
goes
into
Contracting
with
Pharma
and
and
that's
why
we,
you
know,
actually
exclude
the
administrative
fee
for
for
that
work,
but
we
believe
all
of
these
other
fees
and
things
where
savings
should
be
getting
passed
on
to
the
client.
That
should
be
happening,
and
it's
just
not.
J
So
again,
the
current
experience
for
kehp
yearly
spending
of
557
million
on
Pharmaceuticals
about
300
million
of
that
is
going
to
Specialty
in
Elder
pharmacies,
which
are
out
of
the
state
through
CVS.
Those
are
CVS
mandated
prescriptions
being
filled,
and
so
basically
CVS
is
adding
jobs
and
revenue
out
of
our
state
right.
So
this
is
an
opportunity
for
khp.
J
We
believe
that
we
can
bring
significant
savings,
especially
through
passing
on
all
of
these
rebates
and
all
of
these
savings
that
truly
come
from
Pharma,
also
bringing
some
of
that
specialty
fills
and
those
Medica
and
those
90-day
prescription
fills
back
into
our
state
through
the
Kentucky
Hospital
Association
that'll
help
us
bring
new
jobs
back
into
the
state
and
new
Revenue
back
into
the
state
and
then,
lastly,
just
more
close,
closer
personalized
care
for
for
state
employees-
and
this
is
just
my
my
few
closing
statements
here
as
I
stated
earlier,
most
pbms
are
for-profit
companies
and
they're
just
doing
their
job,
making
as
much
money
as
they
can
for
their
shareholders.
J
We
believe
that
they'll
continue
to
find
new
ways
until
either
policy
makes
the
change
or
there's
a
market-driven
solution.
That's
going
to
make
a
change.
100
rebates
are
bad
again
going
back
to
that
slide.
There
are
many
many
other
savings
coming
from
Pharma.
It's
not
just
the
one
that's
defined
as
rebates,
and
that
should
be
getting
passed
on
to
the
client.
J
A
A
We
just
had
a
presentation
from
kahp
yesterday
in
state
and
local
government
who
said
that
they
have
an
incredibly
transparent
contract
and
clearly
I,
don't
know
how
much
that
they're
aware
of
that.
This
is
going
on
within
their
own.
If
the
commissioner
is
watching
I
asked
yesterday
for
her
to
watch
and
tune
in,
you
can
see
the
opportunity
I
think
that
we
have
for
savings
really
for
health
care
for
all
the
state
employees
who
are
part
of
that
plan
as
well.
We
do
have
a
couple
of
questions.
J
We
are
not,
ironically,
we
we
actually
tried
to
be
accepted
into
pcma
and
mostly
because
there's
so
much
legislation
state
to
state-
that's
currently
happening
and
they
keep
up
with
the
regulations
and
help
pass
on
some
of
that
knowledge.
So
that's
really
what
we
were
lean
on
pcma
for
to
try
to
get.
However,
when
we
applied,
we
were
denied
because
they
didn't
believe
in
necessarily
our
mission
and
some
of
the
things
we
were
trying
to
do
in
this
space.
So
we
were
denied
admission
into
people.
A
B
Thank
you
Mr,
chairman
and
gentlemen.
Thank
you
for
the
presentation.
I
think
we
are
all
sufficiently
irate
at
this
point.
Help
me
understand
with
the
the
discount
cards
where,
where
does
that
fall
within
that
that
chain
is
it?
Are
those
prices
an
indication
of
what
the
fair
market
value
would
be
if
the
pbm's
played
fairly
or
or
where
do
they
fall?.
J
Yeah
I
mean
I,
mean
I,
think
a
lot
of
it
has
to
do
with
the
the
PBM
is
deciding
what
it
pays
its
own
Pharmacy
right
so
and
and
and
that's
part
of
the
the
trouble
with
this
is,
you
know
we'll
never
own
our
own
Pharmacy
I.
Think
Capital
RX
probably
has
the
same
position.
We
think
that's
where
a
lot
of
the
trouble
is
is
when
they're
deciding
what
they
pay
themselves.
The
the
other
concerning
point
is
that
high
price,
that
you
see
there
that
they're
paying
you
know
for
KH
kehp
example.
J
I
B
I
And
again,
it's
a
little
complicated,
but
I
think
I
can
break
it
down.
The
discount
card
is
quietly
behind
the
scenes,
basically
leveraging
existing
PBM
Network
Deals.
They
have
a
sort
of
an
array
of
them
that
they
triage
the
claims
to
for
the
lowest
available
price,
while
the
perception
in
the
industry
right
now
is
that
that
drives
a
lower
cost
for
the
patient.
In
reality,
it
still
has
a
tremendous
amount
of
margin
built
into
it.
I
B
Thank
you
so
much.
This
is
fascinating.
I
thought
I'm
over
here
I
have
a
question
on
so
the
drug
r
with.
If
you
have
the
RX
card,
it's
six
dollars
the
real
expensive
one
was
like
eleven
hundred
dollars
for
for
a
year
that
then
they're
charging
kehp
eleven
hundred
dollars
right.
So
how
much
are
they
paying
the
drug
company
for
the
medicine
that
they're
charging
eleven
hundred
dollars
for
and
how
much
are
they
paying
the
pharmacy?
If
you
don't
go
to
their
Caremark
pharmacy,
how
much
are
they
making
out
of
that
money?
J
A
C
Thank
you,
Mr
chairman
trip
and
naive
question.
Why
are
some
prescriptions
more
profitable
than
the
others.
D
So
if
I
could
I'd
love
to
step
in
on
this
one,
so
in
our
research,
if
I
was
to
walk
you
behind
a
Pharmacy,
Counter
I
would
be
able
to
show
you
how
Pharmacy
experiences
economically-
and
this
is
ballpark
here
right.
But
take
take
me
at
my
in
my
years
of
experience
here
about
half
of
the
prescriptions
that
a
pharmacy
dispenses
are
going
to
be
done
at
a
loss,
meaning
that
they're
not
covering
their
overhead
costs
and
in
many
instances
they're
not
even
covering
the
cost
of
the
medication
itself.
D
Then
you
have
about
40
of
claims
that
are
paid.
What
I
would
just
Loosely
categorize
as
as
a
as
a
break-even
proposition
for
the
pharmacy,
meaning
that
they've
covered
the
cost
of
the
drug
and
they're,
making
enough
margin
to
cover
their
overhead
costs.
So,
let's
just
say
a
ballpark
of
like
five
to
Fifteen
dollars
in
profit.
It
usually
on
average
cost
of
Pharmacy
anywhere
from
ten
to
eleven
dollars
per
prescription
to
break,
even
if
they're
making
profit
on
that.
D
But
then,
there's
that
leftover
sliver
that
ten
percent,
where
pharmacies
are
wildly
overpaid
for
medicines,
while
pharmacies
need
around
ten
dollars
to
break
even
we
see
instances
where
pharmacies
can
make
hundreds,
if
not
thousands,
of
dollars
on
a
single
claims
transaction.
So
a
good
example
would
be
like
a
generic
Leave
Act,
which
is
a
popular.
D
You
know:
leukemia
medication,
generic
Tech
federa,
which
is
a
multiple
sclerosis
medication,
their
expensive
medications
that
are
traditionally
told
or
through
benefits
designed
the
PBM
says
you
have
to
get
that
medication
at
the
pharmacy
we
own
the
Specialty
Pharmacy
we
own,
but
they're,
not
they
can't
force
everybody.
There
are
some
plant
sponsors
that
will
say:
look
we
want
Open
Access.
There
are
some
plant
sponsors
that
will
incentivize
a
patient
to
get
their
medicines
at
the
pbmo
pharmacy.
But
the
key
here
is
that
some
pharmacies
will
benefit
from
how
pbms
can
wildly
overprice
a
medication.
D
What
our
research
typically
shows
is
that
when
pharmacies
make
a
lot
of
money
on
specific
drugs,
those
are
drugs
that
are
traditionally
disproportionately
being
dispensed
at
pharmacies
owned
by
the
PBM,
so
they're
willing
to
overpay
when
they
know
that
that
money
will
flow
down
to
their
subsidiary
Affiliates
right,
so
I'm
willing
to
overpay
for
the
generic
Leave
Act,
because
I
know
that
I,
the
PBM
will
Downstream
fill
80
percent
of
those
claims
or
70
of
those
claims.
So
sometimes
pharmacies
can
make
a
lot
of
money
but
recognize.
A
Thank
you,
I
have
one
question:
I
think
that,
probably
on
a
lot
of
people's
minds,
because
we
hear
a
lot
about
it
in
the
National
discourse
and
there's
been
even
some
federal
discussion
about
policies
about
repurchasing
drugs
from
other
countries,
because
they're
cheaper
and
we
have
you-
know:
I
went
to
an
employer
this
morning
in
my
community
for
a
tour
of
their
employer,
and
they
we
talked
about
this-
how
this
guy
winds
up
going
to
another
country
to
purchase
his
medications,
because
it's
so
much
cheaper
than
what
he
can
get
it
for
at
our
pharmacies
here
in
our
state
in
our
country.
A
D
So
I
I
do
some
I
do
a
lot
of
international
pricing
research
myself.
So
there
are
just
like
within
different
benefits
designs.
You
will
find
some
medications
cheaper
at
some
under
some
plans
versus
others.
You'll
find
some
medications
cheaper
at
some
pharmacies
versus
others.
The
same
thing
is
true
with
International
pricing.
In
many
instances
we'll
find
that
brand
Brand
Products
will
be
cheaper
in
many
of
the
international
comparators
from
a
from
a
U.S
perspective,
but
then
we
also
typically
see
that
generics
are
more
expensive
at
internationally.
D
One
of
the
trade-offs
is
that
a
lot
of
those
International
or
countries
will
do
one
of
two
things
one
is
they
are
engaging
in
price
control,
so
you
know
to
the
degree
with
which
those
have
a
version
to
too
much
government.
Over
you
know,
input
into
pricing
will
recognize
that
many
of
those
organisms,
many
of
those
countries,
are
engaging
in
just
straight
up:
price
controls,
they're
setting
the
prices
for
everybody.
D
What
that
also
means
is
that
that
can
hinder
access
to
medications
in
those
countries,
so
we'll
either
see
delay
days
where
drug
manufacturers
will
delay
launching
a
product
in
a
particular
country,
or
they
just
won't
even
have
it
all
together
in
order
to
engage
in
price
controls,
the
those
International
companies
countries
are
doing
a
lot
of
what
pbms
sometimes
do,
which
is
say,
look
we're
not
going
to
cover
this
medication
at
all.
Unless
you
give
us
a
big
discount,
the
country
is
making
a
unilateral
decision,
and
what
that
ends
up
doing.
D
Is
it
divorces,
Choice
out
of
the
matter
in
the
United
States
we'll?
Have
this
unique
pricing
dysfunction
right
where
the
prices
are
way
over
inflated?
At
the
end
of
the
day,
we
still
have
our
choice
into
into
availability
and
that
choice
is
not
available
in
a
lot
of
the
countries
that
engage
in
those
price
controls.
A
Anything
else
you
John
would
like
to
add
on
onto
that
or
I'm.
Just
always
curious,
because
I
hear
that
discussion
is
an
option.
All
the
time
and
I've
always
had
a
lot
of
it
had
to
do
with
r
d
that
a
lot
of
that's
done
in
our
country
and
other
countries
wound
up
benefiting
from
the
research
and
development
that
we
do
in
our
country
and
often
get
them
at
a
cheaper
price.
B
Decides
to
cover
those
out-of-state
drugs
I.
Think.
A
few
examples
that
come
to
mind
are
Vermont
and
Utah
that
have
that
at
least
dove
into
that
into
the
into
the
world
of
international
drug
pricing
and
brought
them
into
the
state
in
one
aspect
or
another.
So
it's
a
pseudo-regulatory
function,
but
there
is
obviously
a
risk
when
it's
not
necessarily
the
the
United
States
controlling
that
that
drug
Supply
yeah.
I
One
other
thing
that's
important
to
note
on
this
is
that
it
relies
on
a
smooth,
International
Logistics
system
to
get
drugs
flowing
on
time.
I
mean
those
are
patients
that
rely
on
drugs
month
to
month,
day
to
day.
What
we
saw
during
the
pandemic
was
a
big
drop
in
interest
in
this
frankly
that
the
international
Logistics
just
wasn't
able
to
keep
up
with
the
steady
supply
chain.
So
you
know
that
that's
another
consideration,
especially
when
we're
talking
about
life-saving
medications.
A
A
Those
kind
of
Graphics
always
help
me
to
get
an
understanding
of
where
dollars
flow.
Like
I
said
it's
a
very
complicated
process,
but
I
think
it's
helpful
and
also
a
pharmacy
benefits
report
for
21
and
20.
You
can
kind
of
take
a
look
at
a
lot
of
the
numbers
of
how
much
we're
talking
about
in
terms
of
of
dollars.
There.
A
Gentlemen,
thank
you
all
so
much
for
making
the
trip
today
and
and
coming
and
and
I
appreciate,
we've
got
again
I
always
talk
about
having
good
partners
in
healthcare
and
I
feel
like
sometimes
we've
made
contracts
with
with
partners
that
aren't
transparent,
aren't
fair
I
appreciate
that
we
have
people
out
there
trying
to
do
the
right
thing
and
that's
just
really
important
for
us
going
forward.
Hopefully
this
will
catch
on
and
and
we'll
see
more
companies
like
your
own,
do
very
well,
not
only
in
our
state
but
across
the
country.
A
A
So
please
keep
a
lot
of
that
and
I
appreciate
you
all
coming
be
willing
to
testify
today,
but
we've
kind
of
run
out
of
time,
and
you
can
see
we
needed
to
vote
one
entire
meeting
towards
having
this
discussion,
because
it
is
very
complicated
and
I'm
hopeful
to
see
even
though
representative
Sheldon
you're
not
going
to
be
with
us
in
the
next
session.
Hopefully
this
bill
is
going
to
come
back
so
that
your
work
is
not
in
vain
and
it
sounds
like
we
have
Partners
out
there
who
are
in
this
space.
A
Who
would
support
it
so
I'm,
very
hopeful
that
we'll
see
efforts
and
I
would
encourage
members
to
take
a
look
at
that.
If
you
have
any
discussions
again,
representative
Sheldon
is
the
expert
in
this
to
bring
your
concerns
to
him.
Our
next
interim
joint
committee
on
Health
and
Welfare
meeting
is
going
to
be
on
Wednesday
October,
the
26th
at
11
A.M
other
than
that,
unless
we
have
any
of
the
other
issues
we're
going
to
stand
adjourned.
Thank
you.