What is a PBM and What Do They Do?

Episode Transcript

Speaker 1 (00:00):
Ask the experts.

Speaker 2 (00:01):
Of course, this is full scope with doctor Nicole Hemkiss
of Advocate MD. If you haven't been to the website recently,
by the way, we talk with the doctor each and
every week at a chance to talk about some stuff
going on in healthcare, also some of the benefits of
direct primary care. If you haven't had a chance to
check out the website ADVOCATEDPC dot com. It's a really

(00:23):
great website. Not only obviously there's a ton of information
about the clinic, the different services, the procedures, but I
know a really important part of what they do at
Advocate MD and with direct primarycare is transparency. So you
can see, like what does a membership cost, what a
certain procedures cost. All that information is available up at
ADVOCATEDPC dot com.

Speaker 1 (00:45):
That's ADVOCATEDPC dot com.

Speaker 2 (00:47):
Again, also a great place to get to know the
doctors and learn a little bit more about direct primary
care and what it pairs well with, whether it's a
high deductible insurance plan or pairs with things like a
health share, all sorts of information right on the website.
ADVOCATESDPC dot com. That's ADVOCATESDPC dot com. Ready to make

(01:07):
an appointment become a member at Advocate MD. All you
gotta do, just pick up phone Ga McCall six oh
eight two six eight sixty two eleven. That's six oh
eight two six eight sixty two eleven. We're gonna be
talking this week with doctor Nicole Hemkiss about uh uh
PBMs and doctor pharmacy benefit Managers.

Speaker 1 (01:28):
I do believe is what a what a PBM it is?
Isn't it?

Speaker 3 (01:32):
That is correct? Sean?

Speaker 1 (01:33):
How you doing this morning?

Speaker 3 (01:36):
Good? Good?

Speaker 2 (01:37):
How are you? I can't. I can't complain, mostly because
I looked out the window about ten minutes ago and
I saw the sun peeking through and it's a you know,
we're on the weekend, so we're we're all good there
for sure. And I you know, I was telling folks
there just about the website, and I know you put
a lot of work into ADVOCATESDPC dot com, a lot

(01:59):
of work in and keeping it updated. But also like
great profiles on the different doctors. We talk about the
eight physicians at at Advocate MD, and there's really great
bios for folks that want to kind of get just
a feel for the different doctors at Advocate m D.
Another thing that you do is take things one step
further is give folks the opportunity to talk with the

(02:21):
doctor before before the becoming patients and kind of get
to know each other. And it's a really it's a
really cool thing. I know you do open houses and
other events at Advocate MD that really give give those opportunities.
Real quick, before we start talking about pharmacy benefit managers
and I know they've been in the news a bit
as well, let's talk about the doctors at Advocate MD.

Speaker 1 (02:42):
I mentioned eight eight physicians.

Speaker 2 (02:44):
Uh, you've got a great, great team of doctors at
Advocate MD, and I know you work really hard to
find the right fit for the clinic.

Speaker 1 (02:53):
Don't you.

Speaker 3 (02:55):
Yes, you know there's this a kind of a constant
area of discussion among the doctors in the group and
something that I seems like I'm always kind of working
on finding good doctors. There's a lot of docs out
in the large systems that are, you know, burnt out.
I don't really like that term, but that are just
not really happy with the way medical care has gone,

(03:16):
the trend that we're currently on where they're being pushed
to see more and more patients and spend less time
with their patients. And have less autonomy over how they
take care of patients. Much of that is driven, you know,
by large corporate healthcare systems. So physicians are many times unhappy.
But there are different you know, sometimes financial pressures or

(03:37):
just kind of a fear of change that keep them
working in systems where they really aren't able to have
the joy of medicine like they used to. So I'm
always reaching out. Actually recently I've started another cycle. Every
few months, I reach out to doctors to see if
they are ready to make a change, and you know,

(03:59):
always get similar responses of I love what you're doing
with the direct primary care, and I you know, I
could totally see myself doing this. And again, sometimes there's
different things that are keeping them in their current spot,
but a lot of but I think it is just
a inertia too. I think as humans, most humans, we
get kind of used to doing things in a certain way.
I mean this could be in our job, in our

(04:20):
family life, our relationships, our you know, our physical health,
like whatever it might be. We kind of get, you know,
stuck in this certain way of doing things. Sometimes we
get stuck in a rut and then it's hard to
kind of pull yourself out of that or to make
a change. And I think that that's the same thing
kind of happens too with positions.

Speaker 2 (04:40):
You know, we talk about you know, I think we've
all kind of experienced that, you know, kind of feeling like,
you know, we're trapped in that, you know, whether it's
a career path or other things, and saying well, you know,
like you'll hear from folks that like, well, we're third generation,
you know, we we've owned own a particular business, the
third generation, and you're like the fourth generation.

Speaker 1 (05:01):
Oh yeah, it's it's.

Speaker 2 (05:02):
It's it's and sometimes it's hard to kind of break
away from that course. And I think we see this
over on the patient side as well, is because you know,
it's been that kind of like a slow progression or
maybe call it a regression in healthcare in the United
States is for a lot of a lot of patients
and a lot of folks, it's like each time it

(05:24):
gets incrementally worse, and sometimes it takes a little nudge
to kind of to kind of change direction and and
find better opportunities. And I think one of the great
things about direct primary care and what you're able to
do at Advocate MD is you give folks options. You
give folks choice, and that's not just for for individuals,
but if you're an employer as well, they've got some
great options for you at Advocate MD. Again, you can

(05:45):
learn more online Advocates DPC dot com. That's Advocates DPC
dot com. Let's talk prescription drugs this morning, doctor, And
I think one of the areas that I think I
see a lot is people complaining about how much drugs
costs and wow, they could be very expensive.

Speaker 3 (06:06):
Yeah, you know, it's one of these things, especially in
the United States. So I think many people are aware
that drugs cost more here than they do in other countries.
Many of the drugs that we have in this country,
almost all of them are manufactured in different countries. You know,
some of these are you know, third world countries, some
of them are not, but they're they're shipped here, and
for some reason, when they are shipped into the United States,

(06:27):
they cost exponentially more than if, for example, they were
shipped to Canada, or they were shipped to Mexico or
you know, other countries. And again it you know, I
think some people might have the thought that, you know,
we always talk about Canada drugs and getting drugs from Canada.
Most of those drugs coming through Canada are not made
in Canada. Almost all of them are not made in Canada.

(06:48):
Canada is functioning as the middleman again because either they
have less regulation, they have less less PBMs there, they
have less drug inflation basically, or I don't know if
I don't know enough about Canada Canadian laws, but maybe
they the government controls how much the PBMs can charge.
But yeah, so, so that is a major issue within

(07:09):
the United States and part of the reason why we see,
you know, a year after year insurance costs going up
because right the insurance if they're paying more for drugs,
they're going to pass that on to the consumer. If
a company, if they're if they're paying for their employees'
health insurance and the cost of the drugs are going up, again,
that's going to cost the company more. That's going to
cost the employee more because eventually that cost is going

(07:33):
to be passed on to them either through their copays
being higher, their formula Y covering less medications. But yes, so,
uh Sean, have you heard the term PBM before or
do you kind of know what a pharmacy benefit manager does.

Speaker 2 (07:47):
Unfortunately I've learned about so I know a little a
little bit. I think you may have actually talked to
me about him in the past, but but I don't
know that a lot of folks do understand their role
and really why they're part of the part of the
bigger issue here.

Speaker 3 (08:07):
Yeah, So the pharmacy benefit manager basically is a third
party company that's contracted out to manage the pharmacy benefits,
your drug benefits for your insurance company or for your company.
If you have a work for a large company where
they are paying for your health benefits, they are paying
a separate company. This is almost always the case. There's

(08:28):
very few There are some cases where the insurance owns
the PBM, but almost in all cases there is a
separate third party that's being paid to manage your drug benefits.
So just even think about that part. So that's how
complicated the drug benefit part is that they have to
pay a separate company to manage those. So not only
do they pay them a fee to do the management
of that, then also there are creative strategies, all technically legal,

(08:52):
that that PBM is using in order to generate more
revenue for them. It doesn't in many cases actually work
in the favor of the patient or the company or
the insurance. It works in the favor of the PBM
because they are driving up insurance costs and they are
getting a percentage of those higher costs. But yes, we
have some of these companies here locally, so whether you
have you know, Courts or Dean, or even if you

(09:14):
have Medicare or Medicaid, so we think of you know,
some of these government run health insurance, even those government
run health insurances are contracting out to a private PBM
to handle to manage their pharmacy benefits. And you know,
the irony of a lot of this again is that
you know, many times when we do not use insurance
insurance to pay for the drug. Again, we've talked about

(09:36):
examples of like not using our insurance to pay for
the MRI or the office visit, like if you have
a direct primary care practice. But when we do not
use our insurance benefits to pay for the drug, there
are many scenarios in which the drug cost us less.
You know, I didn't have time to research the history
of this, but it used to be the case that
in multiple states it was illegal for a pharmacist to

(09:57):
tele a patient. So you pull up into the the
drive through and you go to pick up your antibiotic,
for example, and you hand them your insurance card and
the doctor's prescribing you augment in for your you know,
throat infection, and so you hand that to the pharmacy.
I'm sorry that the pharmacists there or the tech and
let's say the augment in is not on your formulaary,

(10:18):
but you know, clean tomcin is or something like that.
So that drug is no longer a preferred drug class.
So instead of it being let's say it's ten or
twenty dollars Copaid, maybe it's fifty, or maybe it's one hundred.
You know, it could be anything. But so that pharmacists, though,
has the ability to kind of see the cost of
the drug through your insurance. And let's say the cash

(10:39):
price of that augment in is ten dollars. It used
to be in many states, and I think a lot
of them have passed laws now again consumer protection laws
to prevent this from happening, where the pharmacists couldn't say
to the patient, you know, you could just pay ten
dollars and pay cash for this if we don't run
it through your insurance. Again, I don't honestly know in
real life if Paris do that. Now again, I'm sure

(11:02):
they are very bogged down on everything else, and probably
that's the least of their on their mind of like
giving you the alternative pricing. But but again that just
kind of again shows you this. You have your insurance card,
you're paying for your insurance or your company, and then
they are charging you exponentially more to pay to use
the insurance to run that through versus paying cash for it.

(11:23):
And again some of this, a lot of this has
to do with the way these PBMs are paid.

Speaker 2 (11:28):
It feels like doctor and and maybe I'm misremembering some
of the history here, but it feels like with these
pharmacy benefit managers, like the early on kind of the
public messaging on these were like, oh, well we're able
to negotiate lower costs and we're able to do this
on behalf that that the reason why these these uh,

(11:48):
these middle men were needed was well, they can get
prescriptions cheaper, and it feels like less expensive. It feels like,
as with a lot of this stuff, it's quite the opposite.

Speaker 3 (12:00):
Exactly, Yes, and that was again the original intention of
PBMs that they were going to help negotiate you better prices.
And you know, again they're representing probably multiple companies or
multiple insurance companies, so they have some strength of you know, volume,
so some economies of scale. So it's like, well, we're
not if you don't negotiate with us, we're going to
pull out these ten thousand lives. You know, they're no

(12:21):
longer going to be using this particular drug. But yeah,
so PBMs negotiate directly in many cases with the drug manufacturers.
But the interesting part is that so they will ultimately
decide what drugs are on your formulary. So that formula
is kind of like the list of your preferred drugs,
and usually there's multiple tiers. So like Tier one is
all your cheap generic medications and maybe it's ten or

(12:44):
twenty dollars cope. Tier two is maybe the more, you know,
a little bit more expensive, probably usually brand name medications.
Maybe that's a fifty dollars cope or one hundred dollars
to copey. And then maybe your tier three is your
specialty med so things like insulin, things like a lot
of jactable medications or logic medications that are extremely expensive.

(13:04):
So these medications again and some some cases they're carved
out so they aren't covered at all. In some cases,
you know, again they're having to deal with a different
almost like a different PBM that's going to order those
from Canada or someplace else. But so the PBM, though,
is the one that's figuring out for you what is
on your tier one, what is on your tier two,
and what is on your tier three. So let's say,

(13:25):
for example, they go to the manufacturers for prilosec and
then they say to them, okay, well we want you
to give us the best deal on this medication, you know,
And so Prilosec is charging them, you know, let's say
fifty dollars for a ninety day supply. And so again

(13:46):
they're now going to put on your formulary that you
have to use Prilosec versus using zantac. Right, so Zantac
isn't covered at all, similar medications, similar uses, but the
Prilosec is covered. But then the interesting part is that,
so so let's say the cost is fifty dollars, and
then they're they're going to pay the pharmacists fifty dollars

(14:07):
to dispense that medication. But the PBM, they call this
spread pricing, so there's still this ten dollars difference. So
so now every time that prescription, every time there's a
prescription for prilosec written for any of those patients in
that company or on that insurance, the PBM is keeping
ten dollars of that. And this is a very this
is a very common and again technically legal thing that

(14:30):
they are doing. Right, So not only are they getting
you know, they're getting paid a fee to manage the
health the plan benefits for the drugs. Then they are
getting a kickback on every medication prescribed if they're doing
this spread pricing, which is again many of them do,
and then again sometimes they're also getting rebates. So the
drug manufacturer Prilisch is saying to them, you know what

(14:51):
if you if you if you are putting us on
your formulae rather than Zantec, We're gonna give you a
little bit extra. And I think that that could be
done a few different ways. I don't know if that's
a direct payment to the PBM, but I think that
could also be a per drug. So I know there
are sometimes where like every time that drug is dispensed
they're getting three dollars or five dollars just directly to
the PBM. So again there's this kind of false thought

(15:15):
that that that's gonna that money is going to somehow
go back to the insurance or the company and be
that savings is going to be passed on to the consumer.
But it's not. They keep that additional money. Very similarly
to you know, what we've talked about Sean with you know,
insurance companies negotiating discounts, which we've we've talked about in
many cases is almost like a false a falsehood that

(15:38):
they even kind of negotiate discounts anymore. You know, I
always use the example of I think I've used the
example before where I was talking to a company and
they were talking to me about a local company. Here
they have one of the local insurance companies, and they
were saying, like, you know, how expensive the insurance is,
but you know, they negotiate, they negotiate us discounts, you know.

(15:59):
And the example that the HR lady threw out to
me was, you know, a five thousand dollars m Marie,
they're giving us the MRI for three thousand dollars. And
so I said, my response to her after I kind
of looked at her for a while, was well, you know,
if you paid cash for that MRI, it would be
you know, five hundred or six hundred dollars, not three thousand.
So even though they it seems like they're giving you

(16:22):
a discount on this, they actually are marking it up
a lot, right, It doesn't cost them three thousand dollars
to do that MRI. The reality is it probably cost
them like fifty dollars to do the MRI. So so
it makes you kind of feel that the positive feelings
like you're getting a discount, but they're actually making a
lot of money off of this, as opposed to if
we sent you to an independent imaging you know, outpatient

(16:43):
imaging facility. And she kind of just her mouth just
hung open for a while, and so again that that's
kind of the false thing that with insurance companies, and
it's similar to the PBMs. We pay them this additional fee. Again,
some of it because you know, they don't want to
have to manage all the the pharmacy benefits because it's complicated,
it's a lot of work. But then you know, the

(17:04):
thought is that they're going to get some special discounts,
but in many cases that's not the case. They're not
actually passing that cost savings onto the consumer.

Speaker 2 (17:13):
Wow, And I shouldn't be surprised by any of this anymore,
But it's it's And the good thing is that we're
going to talk about some of the some of the
options out there. And I know you work a lot
at Advocate mds as do all the doctors, to keep
prescription prices low and of course inform patients that you're

(17:33):
working with of the best options when it comes to
getting prescription medications. We're going to talk with a doctor
about that in just a moment. In the meantime, if
you haven't had a chance to head on over the website,
head on over there right now. It's Advocates DPC dot com.
That's Advocates DPC dot com. Can learn all about Advocate
MD online again the website Advocates DPC dot com. Great data,

(17:54):
set an appointment, become a member at Advocate MD six
eight two six eight sixty two eleven. That's six eight
eight sixty two eleven. Will continue our conversation with doctor
Nicole Hemkiss of Advocate MD. We will do that next
as full scope continues right here on thirteen ten wib
A thirteen ten WIBA and full scope with doctor Nicole Hemkiss,
Wisconsin's direct care doctor. Talk this week with doctor Hemkiss

(18:16):
about prescription medications and of course pharmacy benefit managers what
exactly their role is in the process, and talking about
the costs when it comes to prescription medications. I think
everybody has has probably heard of or personally experienced shell
shock when it comes to the cost of those things.

(18:38):
And doctor, I know that, I know that one of
the things you work really hard at Advocate MD is
controlling prices, giving a phenomenal service with Advocate MD with
access that's also affordable to your doctor. And one of
the things you're you and the doctor's Advocate MD strive
for as well is helping people find prescription meds at

(18:58):
the lowest cost possible.

Speaker 3 (19:00):
Yes, so our office dispenses generic oral medication, So we
don't do any injectibles. We don't have any brand name medications,
but anything that comes in a generic form, which I
would say probably ninety percent of medications have a generic alternative.
You know, again, one of the kind of scams that's
happened within our medical system in the last ten to

(19:23):
twenty years, you know, you have We're one of the
few countries that allows direct to consumer advertising for pharmaceutical companies,
so they can put commercials on TV where they have
done these designer drugs where they modify, you know, one
molecule in the drug and they rename it and it's
you know, again, maybe the same thing as as a
generic medication that's currently on the market, but when they
change that molecule and rename it, then they can market

(19:46):
it and sell it as something that's better, you know,
you know, less side effects, whatever they want to say,
and then they can charge one hundred times more than
the generic medication. So so many people are put on
to brand name medications, even you know, doctors that trying
to help out and they're giving them samples out of
the office, but unfortunately the samples are only for a
limited time, and then once they run out of the samples,

(20:07):
they're put onto the brand name that they have to
pay for, and the medication could cost you know, two
hundred dollars five hundred dollars a month, and nobody can
afford to pay that long term. So we try to
as much as we can utilize generics. If it is
just as effective, you know, and just as useful to
the patient. We'll use those. But in cases, so anything

(20:29):
that comes in a generic form that includes you know,
blood pressure medicine, cholesterol, thyroid, diabetes medications, you know, skin creams, hormones,
you know, mental health medications like antidepressants, anxiety medications. We
have some more acute meds that we keep on hand

(20:49):
to but let's say it's something that the patient needs
that we do not dispense because it has to be
a brand name, or let's say it's an injectable medication
that we help the patient. We work with them and
we look at the insurance benefit and we see, you know,
how affordable is it if we get it through the pharmacy.
If it's not affordable, we can send medications to Canada. Again,
there are many many options where we can find. You know,

(21:13):
an example I like to use is anticoagulants. So there
are medications that then your blood. You know, one of
them is warfare and or kumen, and that's generic, that's
very inexpensive. But then there are newer brand name medications
like zerelto eloquist where they are blood thinners, but they
can be extremely expensive if they aren't covered by the insurance.

(21:34):
But if we order these medications from Canada, the difference
in price might be a difference of you know, instead
of it being five hundred dollars a month, it might
be one hundred dollars a month or something like that.
So again bringing the cost down to where for some
people that will make it much more affordable for them.
So then there are other options like direct to manufacture
program so sometimes the manufacturer will send you the medication directly.

(21:58):
Some of these are not based on income level or
insurance status. That's becoming more and more common, I would say,
as again, I think some manufacturers are just trying to
cut out the middleman a little bit with all the
things we talked about. And then there are prescription drug
assistance programs through manufacturers. So if you do have either

(22:19):
no insurance or you do have insurance but the insurance
doesn't cover that medication, again, the manufacturer wants you to
use it, so they'll they tend to give you the
medication at a very low cost, usually for a limited
time period like six months or a year, and then
the cost increases. But sometimes we'll give you, you know,
rebate cards and things like that will where if you
fill it out of pharmacy then you get you know,

(22:40):
one hundred dollars off or something like that, so that
can make it again more affordable for patients, and we
will help them try to figure out, you know, how
we can do that.

Speaker 2 (22:50):
It's pretty amazing what all you guys do at Advocate
MD and really advocating for your patients. And as we
talk with doctor Nicole lambcas each week, I hope you've
had a chance to learn more about direct primarycare. If
you want more informational, all you got to do is
head on over to the website Advocates DPC dot com.
That's Advocates DPC dot com. Great website again to learn

(23:12):
more about direct Primarycare and Advocate MD. Now is the
time I've been thinking about becoming a member. Today is
today to make that appointment. Six oh eight two six
eight sixty two eleven. That's six soh eight two six
eight sixty two eleven again the website Advocates DPC dot com.
That's Advocate DPC dot com. Doctor you enjoy this great
weekend and we'll talk.

Speaker 3 (23:32):
Soon you too, Sean. Thank you.

Speaker 1 (23:33):
News is next here on thirteen ten wiv a