April 22, 2025 • 23 mins
In this episode of ShiftShapers, host David A. Saltzman sits down with David Blair, founder and CEO of LucyRx, to explore a growing crisis in American healthcare: pharmacy deserts. As rural and underserved communities lose access to local pharmacies, millions are left without a vital link in the healthcare chain. David unpacks the economic and systemic challenges driving pharmacy closures and shares how LucyRx is stepping in to reshape the future of pharmacy care.
From the SPARC (Sustaining Pharmacy Access & Rural Care) program to the push for federal regulation, David outlines what it takes to restore pharmacy access, reduce costs, and deliver more integrated care. This conversation also highlights the importance of aligning pharmacy locations with care providers—a proven strategy for improving outcomes and affordability.
📌 Related Resources:
- AMA: Physician Shortage is a National Emergency
https://www.ama-assn.org/press-center/press-releases/ama-president-sounds-alarm-national-physician-shortage?utm_source=chatgpt.com - HCSC: Linking Medical and Pharmacy Benefits Improves Care
https://www.hcsc.com/newsroom/category/affordability/connecting-medical-pharmacy-benefits-improve-care-lower-costs?utm_source=chatgpt.com
🤖 Sponsored by BenePower
BenePower is an AI-powered platform helping advisors build high-impact, self-insured health plans quickly and seamlessly. By integrating best-in-class point solutions and eliminating inefficiencies, BenePower reduces costs, improves member outcomes, and positions advisors as industry leaders.
🔗 Learn more at BenePower.com
🔑 Key Takeaways from This Episode
📌 Pharmacy Deserts Are a Healthcare Emergency
Millions live without convenient access to a pharmacy, leading to delays in care and worsening health outcomes. David Blair explains how this silent crisis is affecting rural and underserved populations.
📌 SPARC: A Scalable Solution for Pharmacy Access
LucyRx’s SPARC program brings pharmacy services back into communities through a hybrid of innovation, advocacy, and strategic partnerships.
📌 Federal Regulations Could Reverse the Trend
David advocates for smarter, centralized policy to address industry-wide economic challenges and ensure that pharmacies remain viable in low-density areas.
📌 Integrated Care Saves Money—and Lives
Blair highlights how co-locating care and pharmacy services leads to better health outcomes and significantly reduced costs.
📌 The Future of Pharmacy Is Local + Digital
The industry is evolving toward community-based pharmacy care that is supported by modern tech infrastructure and national reform.
⏱️ In This Episode
00:00 – Introduction to Rural Pharmacy Challenges
00:09 – Meet David Blair of LucyRx
01:07 – The Role of Pharmacists in Healthcare
01:48 – Understanding Pharmacy Deserts
02:41 – The Impact of Pharmacy Closures
05:31 – LucyRx's SPARC Program
07:18 – Advocating for Federal Regulations
09:58 – Economic Challenges for Pharmacies
17:05 – Integrated Specialty Care Network
20:58 – Future of the Pharmacy Industry
22:47 – Conclusion and Final Thoughts
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
How can we ensure that rural communities aren't
left without vital pharmacyservices and support, both
everyday health and sometimeseven emergency care?
We'll find out on this episodeof Shift Shapers.
Speaker 2 (00:14):
Change either energizes or paralyzes.
The choice is yours.
This is the Shift Shaperspodcast, bringing the employee
benefits industry interviewswith individuals and companies
who are shaping the industryshifts.
And now here's your host, davidSaltzman.
Speaker 1 (00:36):
And to help us answer that question, we've invited
David Blair, founder and CEO ofLucyRx.
Now, some of you who are payingattention may recall that back
in February, in episode 505, weinterviewed Susan Thomas, who's
also at LucyRx.
We don't usually do interviewswith the same company so closely
to one another, but David'shere to talk about some really
(00:57):
interesting new initiativesthey've just rolled out on a
particular challenge.
So welcome, david.
Speaker 3 (01:03):
Thank you, david, it's great to be here on a
particular challenge.
Speaker 1 (01:05):
So welcome David.
Thank you, david.
It's great to be here.
It's my pleasure to have you.
So I had a guest recently tellme that the average American
sees their pharmacist 12 times ayear and their physician or
provider three times a year.
Can that be accurate?
Speaker 3 (01:21):
Yeah, I think so.
If you think about thepharmacists, right, they're one
of the most trusted resources inthe healthcare delivery channel
and most Americans are on atleast one medication, and so
they're seeing their pharmaciston a regular basis, whereas
they're lucky to see a doctoryou said three times.
You know, I think my experiencemight be lucky to see him one
time, but it's a vast difference, for sure.
Speaker 1 (01:47):
Now we talk and we have talked a number of times
because it's a subject that Icare a lot about underserved
populations and the so-calledmedical deserts.
Can you give us a baselinedefinition of what those
communities are and what theylook like across whatever
spectrum there is?
Speaker 3 (01:59):
Sure, david.
So we have a huge problem inthe United States, which we call
pharmacy deserts, right, and wedefine a pharmacy desert as
only one pharmacy within a10-mile radius, and the
challenge with this is oneindividuals are less likely to
get their medications if they'rein a pharmacy desert.
In fact, there was a report outthat 27% less often they'll
(02:22):
pick up their meds.
But it's not just picking uptheir meds, and it's what it was
.
Your first question, dave, thatI want to circle back to, which
is this is part of thehealthcare delivery system,
right?
So it's not just someone goingin and seeing their pharmacist
to pick up their meds, but maybethey have a question about an
OTC product or a chroniccondition or side effects.
And so, as we see thepharmacies closing, there's more
(02:45):
and more pharmacy deserts, andthat's having an adverse effect
on health outcomes.
Speaker 1 (02:50):
Well, because pharmacies, especially in those
areas, have, as I alluded to inour open, have become kind of
more than just pill dispensingplaces, haven't they?
Speaker 3 (02:59):
Absolutely.
The pharmacist and I've saidthis for 20 years is probably
the most underutilized resourcethat we have in the healthcare
delivery system.
Right, these are individualsthat have gone through six,
eight years of advanced clinicaltraining and, because of
antiquated regulations andinadequate reimbursement models,
too often times they're justcounting pills and we're not
(03:22):
getting the full value fromthese pharmacists, and that's
very much an untapped resourcethat candidly, as a country, we
need to tap into because we arefacing clearly a healthcare
crisis with an aging populationand we have a massive shortage
in physicians.
We've got to do a better jobleveraging the assets that we
have.
Speaker 1 (03:43):
What are some of the things that folks we may not
think about it in the audience,but some folks go to pharmacies
about.
Speaker 3 (03:52):
what are some of the things that pharmacists help
with?
Well, so, david, this is reallydriven at the state level today.
So I imagine that, regardlessof what state a pharmacist
resides in, they're going to beproviding similar services, but
it's whether or not they'regetting reimbursed for those
services and so like in Idaho isprobably a great example of a
state that has allowedpharmacists to prescribe certain
(04:16):
medications for chronicconditions and minor conditions.
You have other states, newMexico, for example.
They have a licenseddesignation I think it's called
a pharmacy clinician where notonly can they write
prescriptions, they can requestlab work, they can provide
medication therapy management.
So the pharmacist right as thattrusted resource is answering
(04:38):
questions to the patients asthey come in and really guiding
them to the most care andcost-effective solutions.
The challenge we have isoftentimes we're not getting
paid for it, right, and, david,in the last six or seven years,
I think, I saw 1,200 independentpharmacies have closed.
So we've got to do a muchbetter job of keeping these
pharmacies in business, and partof that is making sure they're
(05:00):
getting paid for the work thatthey're doing.
Speaker 1 (05:03):
And yet we see headline after headline about
some of the big chains closinghundreds of stores.
How do you explain the two?
It seems like a dichotomy.
Speaker 3 (05:12):
And I think, david, it's actually thousands of
stores from Rite Aid, Walgreensand CVS have closed, and it's
only going to get worse.
Right, walgreens was sold inthe last couple months and no
doubt there's going to be moreclosures, and independents are
actually closing at a fasterrate, if you can believe that
about two to one independentpharmacies are closing, and so
one of the things that we'vedone at LucyRx is we've
(05:34):
reimagined every element of howthe prescription care is
delivered in this country, and akey element is the pharmacist
and making sure that we'regetting the best value and
service from them.
That's part of the programsthat we've introduced.
Speaker 1 (05:47):
Is that what you call your SPARC program?
Speaker 3 (05:49):
Right.
So SPARC stands for SustainingPharmacy and Rural Care, and so
what it does, it's really threeprongs.
So one we want to reimburse thepharmacies more money for those
pharmacies that are in apharmacy desert.
They deserve that and they needthat.
They just have lower volumes.
We also advocate at the statelevel for smarter legislation,
(06:16):
and I gave you a couple examplesabout New Mexico and Idaho.
But we really need guidelinesfrom the federal regulators,
because each state needs to bepursuing this.
This is a national problem,right.
And when you think rural care,you might think, oh, is this
like Wyoming or Montana thing?
No, 46% of all counties in theUnited States have at least one
pharmacy desert.
So this is a national problem.
And then, lastly, david, wepromote the pharmacy as a
(06:40):
healthcare hub, right, becausewe know that that pharmacist can
provide other servicesvaccinations, preventative
maintenance, chronic conditionmanagement.
So we promote that pharmacy.
And so those are the threeinitiatives that we pursue
through that SPARC program tohelp keep these independent
pharmacies in business.
Speaker 1 (06:59):
You mentioned that it's a nationwide problem, and
indeed it is.
Has anybody approached folks onthe Hill and seen if there's an
appetite for any kind offederal regulation, or would the
states be a better venue forthat?
Then you've got 50 phone callsto make.
But where's that at?
Speaker 3 (07:19):
Well, it has to be right.
And so we're fortunate thatwe're outside of Washington DC,
and so we have connections withthe new administration officials
, and we've been advocating forfederal regulations.
And here's David, here's what Isay.
Okay, if you look at theAmerican Medical Colleges, they
had a report recently.
They're projecting they'regoing to have 86,000 physicians
(07:41):
shortage, a shortage of 86,000physicians over the next decade
or so.
In round numbers, we have400,000 licensed pharmacists in
this country.
200,000 are in retail.
Now, of course, a pharmacistcan't completely replace a
physician, but it can make a bigdent.
So when you think about thistidal wave that we have coming
(08:02):
with this aging population andthe physician shortage, the
answer is right in front of us.
We have 200,000 pharmaciststhat are around this country
that have been trained for sixto eight years in a clinical
environment and we're not fullyutilizing them, and so we've got
to change their scope ofservices so that we can not only
(08:23):
address the problem but keepthose pharmacies in business.
Speaker 1 (08:26):
So have you had any significant conversations so far
with folks in theadministration around the Hill?
Speaker 3 (08:31):
I have, and here's what comes up with the new
administration is a distrust foranything big right.
So they're very skeptical aboutdrug manufacturers, big PBMs,
the big retailers.
They absolutely believe thatthe average American is getting
the short end of the stick andthey're trying to figure that
(08:53):
out.
They're moving with urgency andwhen I've met with the
healthcare officials, evenbefore the new president was
inaugurated, they already hadtheir staff selected.
There's a mission to get thisdone and, david, it's Washington
DC and I've lived here my wholelife and I have seen a lot of
(09:15):
activity and oftentimes not muchprogress, I don't know.
I mean, I think for sure we'llsee more and more progress with
the states, but I would love tosee some federal regulations
come in, at least to give thestates guidance on how they can
be, you know, expanding thescope of a, you know, pharmacist
services.
Speaker 1 (09:33):
My oldest daughter and her husband live in the
district and so I completelyunderstand and they both work at
different pieces of that touchgovernment.
So I and I've been up a lot.
You know, with my involvementwith the National Association of
Benefit Insurance Professionals, I've been up there a lot and
so I understand it's kind oftake one step backwards, two
step, one step forward, rathertwo steps backwards sometimes,
but it's tough.
Let's, let's help the audienceunderstand a little bit.
(09:56):
But pharmacies don't run7-Elevens because they want to.
They've got grocery stores inthe front of the store because
their margins in the back, wherethe pharmacy is, aren't really
good.
What is a pharmacy average andwhat do they take on the work
that they do in the pharmacycounter?
Speaker 3 (10:15):
Well.
So, david, you've got to.
That's exactly right.
So over the years the back ofthe counter has really become
almost I'll call it a lostleader, because the price of
generics, the margins, are laserthin, right.
So a pharmacist might begetting 95% off on a generic
(10:35):
drug, so super thin margins.
But that could have been madeup with front store sales.
But now the problem is with,you know, let's say, amazon and
other big box retailers.
They've taken that share away.
And then the compound, theproblem we haven't talked about
this are the mandatory mailprograms.
So 20 years ago the big PBMsoftentimes put in mandatory mail
(10:57):
programs and, david, what yousaw over that 20 year period is
the delivery of medications forchronic conditions and specialty
meds has gone from 20%delivered through mail to 40%
through mail, and so that'staken business away from the
pharmacy.
And so now you don't have peoplecoming in to pick up their meds
(11:19):
and maybe picking up sodas orwhatnot on the way out the door.
But also you've eliminated aninteraction, a clinical
interaction with someone.
Perhaps someone was seeing thepharmacist once a month and a
conversation.
Especially in these rural areaswith independent pharmacies,
it's likely a conversation mighthave started around.
Maybe it was allergy season orthey had asthma or something
(11:40):
along those lines, and nowyou've robbed the patient of
that because now they have to gothrough mail, and so one of the
things that at LucyRx is wedon't have any mandatory mail
programs.
We want our patients to gettheir drugs where they want to
get them right, meet them wherethey want them, versus trying to
force them to.
You know, one size fits allsolution.
Speaker 1 (12:01):
Well, and the whole carrot in that program was that
you paid for two months and yougot a three month supply.
Is that something with awilling advisor and a willing
client, let's say in aself-insured plan where they're
building their own pharmacy plan?
Is that something that you guyscan accommodate?
Speaker 3 (12:17):
Not anymore, david.
So most of the drug costs inthis country are out of control
and we see employer afteremployer cutting back on
benefits because they just can'tafford it, and so that two for
three that you said, that's goneby the wayside.
That's no longer possiblebecause employers just can't
(12:37):
afford that.
And there's not that big of adifference between 90 days at
mail and 90 days at retail.
The pricing has gottencompressed over the last 10
years.
Speaker 1 (12:48):
Is it compressed to the point where you can make the
argument that there's virtuallyno difference.
So go to your local pharmacist.
Speaker 3 (12:55):
Absolutely, absolutely, and I think it's the
same.
That's why, when we let's goback to what we talked about,
david, about the independenceand the retail pharmacy chains
closing is because the marginshave gotten so compressed.
That it's you know.
Here's something this happenedjust this week, david.
So Arkansas passed yesterdaythat they're going to decouple
PBM.
You can choose.
(13:16):
You can either be a PBM or youcan be a retail pharmacy.
You can't be both.
Okay, because it's always beenthe Fox watching the hen house,
right when it's like.
If you're the PBM, you're goingto and guess what CVS has said
they're going to do?
They're going to shut down.
They have five locations inArkansas.
They're going to close thosefive locations, so they'd rather
be in the PBM industry.
So you can guess that there's.
You know, this is this is a.
(13:36):
They are on retail pharmacies,so they're going to close five
more pharmacies and that mightcreate five more pharmacy
deserts for all we know.
Speaker 1 (13:48):
It's just like the old story about.
You know, they asked WillieSutton, the famous Boston bank
robber, why do you rob banks?
Speaker 3 (13:52):
He said, that's where the money is yeah, I think
that's the same thing, Likewhere's the money?
It's in rebates and that'swhere the big PBMs run to.
Speaker 1 (14:00):
Yeah, it's a mess and it's getting messier and
messier and messier.
It is nice to see that some ofthe bigger PBM players are being
called on the carpet, and we'veseen some of that in the news
in the last couple of weeks, andso that's kind of interesting.
But it's a formidable foe tofight, isn't it?
Speaker 3 (14:18):
Absolutely, yeah, absolutely.
And we often talk about costversus price because the big
three will show you the lowestprice per pill, which makes
(14:39):
sense because they sell more gas, but Exxon is going to put you
in an SUV that gets like 11miles to the gallon, right, when
maybe you need a hybrid orsomething.
And so we talk about cost.
And to bring that back topharmacy, if you think about it,
if you're reimbursing thesepharmacies so little that they
go out of business, yourhealthcare costs are going to go
(14:59):
up, right, because now you havepatients that aren't taking the
medications, they're going toend up in the ER, they're going
to have chronic conditions.
So, don't you know?
Don't focus so much on price ofa pill, but think about the
overall, you know, healthcareequation and how you can get the
most care and cost-effectivesolutions.
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And now back to ourconversation.
So I know Spark is somethingthat you guys are working on.
It's near and dear to yourheart and to mine as well, but
you've also just recentlyannounced an integrated
specialty care network.
What's the challenge there andwhat does that solve?
Speaker 3 (17:13):
So what it is is we have about 130 specialty
pharmacies in our network andthey're affiliated with major
health systems.
So think, like BostonChildren's Hospital or
Dana-Farber cancer, so they'rewithin a health system and the
the reason that's important isbecause there's great studies
out there about how, if patientsare getting their care and
(17:37):
their medications at the sameplace, adherenceence goes up, er
visits goes down, your qualityoutcomes goes up.
There's actually a 32% lowerspend for patients that are
getting their meds where they'regetting their care.
And just think about it, davidif you have, let's say, a cancer
patient that's seeing theironcologist newly diagnosed,
(17:59):
right, if they can walk out ofthat doctor's visit and pick up
their oral meds, they're muchmore likely to be on those meds.
Or, let's say there's a sideeffect the next day they're on
the phone talking to their docversus waiting, you know, 8, 10,
15 days for a central fillpharmacy to send it.
And that's how the big threehave morphed, right?
(18:20):
So if you're working with a bigthree PBM and many others for
that matter they have a centralfill model and they require you
to go to central fill.
And so what we found?
Kind of reimagining howprescription care could be
delivered, and in some respectsit's similar to our pharmacy
desert program, which isempowering the pharmacist right
(18:40):
Because they're right there inthe community, and so what we do
is we have something called aspecialty concierge and when
someone's newly diagnosed, we'lltell them hey, did you know you
can get your meds right here inthe community, and why?
That's ultimately going to bebetter for them and their health
plan.
Speaker 1 (18:56):
Is this a case of everything old is new again?
I mean, I remember years agoand I can remember back a few
more years than you can when itwasn't unusual for there to be
pharmacies inside medicalfacilities.
Is this a resurgence, or havethey always been there, but
people just don't know aboutthem?
Speaker 3 (19:13):
Well, I think the traditional pharmacy has
probably always been there,right, where you could pick up
your kind of we think of yourold school brand and generic
drugs.
But the specialty drug markethas, you know, gone through the
roof right.
It's going to be $700 million,$700 billion by the end of the
decade, and so I think thespecialty pharmacy is probably
(19:35):
newer in the last 10 years andyou see health systems investing
in those facilities.
But it was funny when you saidold is new and new is old.
It reminds me back of if you goback 25 years ago, when Medco
was owned by Merck, so you had adrug manufacturer owning PBM.
You had Eli Lilly own PCS backthen and the FTC came out and
(20:00):
said, okay, this verticalintegration is anti-competitive,
it is not in the, i'll'll say,the country's best interest, and
put all sorts of guidelines inplace to separate those.
You know, fast forward 25 years.
We're right back to where westarted, which is through
vertical integration.
You have a company that mightbe manufacturing a pill, selling
(20:20):
a pill, getting paid toadminister the pharmacy benefit,
you know, insuring the patient,and there's no doubt that
conflicts emerge when you're inthat many businesses that are
related.
Speaker 1 (20:32):
I was a TPA back then and so I remember it well and I
remember the craziness that itcaused and how it just kind of
somehow parts of it seemcounterintuitive.
But it's interesting thatthings go around and come around
and, you know, kudos to youguys for bringing it to the
forefront.
It's nice.
It's nice to see a firm likeyours that's doing some
innovative stuff and doing goodstuff for the communities as
(20:55):
well.
There's not really an awful lotof that to go around.
So we've got a few minutes left.
Look into your crystal ball.
What do you see in yourindustry in the next couple,
five years?
Speaker 3 (21:06):
Yeah.
So I just want to go back tothe first point that you said.
It's not just Lucy.
There's a dozen innovative PBMsout there that see the same
opportunity that we see and areaddressing the shortfalls in the
market, and so we think we're aleader.
But there's other greatcompanies out there that see the
same things that we do.
Where is the market going overthe next five years?
(21:28):
So disaggregation is one thingthat I see a lot, which is
health plans and employerssaying, okay, I'm not going to
have one contract with a PBM,I'm going to have five contracts
, I'm going to have one personthat's going to provide
specialty mail claimsadjudication network.
And so you see thisdisaggregation model.
Blue Cross, blue Shield ofCalifornia kicked it off a
couple years ago and they werethe first to kind of jump in.
(21:51):
And now you see more and moreof that because I believe
employers and health plannersbelieve if you disaggregate it
you can drive bettertransparency.
You'll see it certainly moreand more at the state level
banning the pass-through ofretention of rebates level
banning the pass-through ofretention of rebates.
I've mentioned Arkansas earlier.
The states have gotten a lot ofmomentum in driving smart
(22:16):
changes.
I'd say it's a jump ball.
Whether or not the feds will getinto further regulating PBMs, I
don't know.
I wouldn't be surprised to seeif the big three break up.
If CVS ends up having to divestsome of the assets there's a
lot of pressure on Wall Streetfor them.
Would that be a more valuableasset if it was split up in
different companies?
But no doubt middle market nextgeneration PBMs like LucyRx are
(22:37):
going to continue to pick upmarket share and we see that.
You can read the press releasesof companies like LucyRx, you
know, winning new business inthe market.
Speaker 1 (22:48):
And that's a great place to end our conversation
for today.
David Blair, founder and CEO ofLucyRx.
David, great conversation.
We hope you'll come back.
Speaker 3 (22:56):
Absolutely, David.
I really appreciate youbringing attention to this
really important topic.
Thank you.
Speaker 1 (23:06):
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Speaker 2 (23:24):
This Shift Shapers podcast is copyrighted content
and may not be reproduced inwhole or in part without the
express written permission ofShift Shapers Solutions LLC.
Copyright 2024.
How can we ensure that rural communities aren't
left without vital pharmacyservices and support, both
everyday health and sometimeseven emergency care?
We'll find out on this episodeof Shift Shapers.
Speaker 2 (00:14):
Change either energizes or paralyzes.
The choice is yours.
This is the Shift Shaperspodcast, bringing the employee
benefits industry interviewswith individuals and companies
who are shaping the industryshifts.
And now here's your host, davidSaltzman.
Speaker 1 (00:36):
And to help us answer that question, we've invited
David Blair, founder and CEO ofLucyRx.
Now, some of you who are payingattention may recall that back
in February, in episode 505, weinterviewed Susan Thomas, who's
also at LucyRx.
We don't usually do interviewswith the same company so closely
to one another, but David'shere to talk about some really
(00:57):
interesting new initiativesthey've just rolled out on a
particular challenge.
So welcome, david.
Speaker 3 (01:03):
Thank you, david, it's great to be here on a
particular challenge.
Speaker 1 (01:05):
So welcome David.
Thank you, david.
It's great to be here.
It's my pleasure to have you.
So I had a guest recently tellme that the average American
sees their pharmacist 12 times ayear and their physician or
provider three times a year.
Can that be accurate?
Speaker 3 (01:21):
Yeah, I think so.
If you think about thepharmacists, right, they're one
of the most trusted resources inthe healthcare delivery channel
and most Americans are on atleast one medication, and so
they're seeing their pharmaciston a regular basis, whereas
they're lucky to see a doctoryou said three times.
You know, I think my experiencemight be lucky to see him one
time, but it's a vast difference, for sure.
Speaker 1 (01:47):
Now we talk and we have talked a number of times
because it's a subject that Icare a lot about underserved
populations and the so-calledmedical deserts.
Can you give us a baselinedefinition of what those
communities are and what theylook like across whatever
spectrum there is?
Speaker 3 (01:59):
Sure, david.
So we have a huge problem inthe United States, which we call
pharmacy deserts, right, and wedefine a pharmacy desert as
only one pharmacy within a10-mile radius, and the
challenge with this is oneindividuals are less likely to
get their medications if they'rein a pharmacy desert.
In fact, there was a report outthat 27% less often they'll
(02:22):
pick up their meds.
But it's not just picking uptheir meds, and it's what it was
.
Your first question, dave, thatI want to circle back to, which
is this is part of thehealthcare delivery system,
right?
So it's not just someone goingin and seeing their pharmacist
to pick up their meds, but maybethey have a question about an
OTC product or a chroniccondition or side effects.
And so, as we see thepharmacies closing, there's more
(02:45):
and more pharmacy deserts, andthat's having an adverse effect
on health outcomes.
Speaker 1 (02:50):
Well, because pharmacies, especially in those
areas, have, as I alluded to inour open, have become kind of
more than just pill dispensingplaces, haven't they?
Speaker 3 (02:59):
Absolutely.
The pharmacist and I've saidthis for 20 years is probably
the most underutilized resourcethat we have in the healthcare
delivery system.
Right, these are individualsthat have gone through six,
eight years of advanced clinicaltraining and, because of
antiquated regulations andinadequate reimbursement models,
too often times they're justcounting pills and we're not
(03:22):
getting the full value fromthese pharmacists, and that's
very much an untapped resourcethat candidly, as a country, we
need to tap into because we arefacing clearly a healthcare
crisis with an aging populationand we have a massive shortage
in physicians.
We've got to do a better jobleveraging the assets that we
have.
Speaker 1 (03:43):
What are some of the things that folks we may not
think about it in the audience,but some folks go to pharmacies
about.
Speaker 3 (03:52):
what are some of the things that pharmacists help
with?
Well, so, david, this is reallydriven at the state level today.
So I imagine that, regardlessof what state a pharmacist
resides in, they're going to beproviding similar services, but
it's whether or not they'regetting reimbursed for those
services and so like in Idaho isprobably a great example of a
state that has allowedpharmacists to prescribe certain
(04:16):
medications for chronicconditions and minor conditions.
You have other states, newMexico, for example.
They have a licenseddesignation I think it's called
a pharmacy clinician where notonly can they write
prescriptions, they can requestlab work, they can provide
medication therapy management.
So the pharmacist right as thattrusted resource is answering
(04:38):
questions to the patients asthey come in and really guiding
them to the most care andcost-effective solutions.
The challenge we have isoftentimes we're not getting
paid for it, right, and, david,in the last six or seven years,
I think, I saw 1,200 independentpharmacies have closed.
So we've got to do a muchbetter job of keeping these
pharmacies in business, and partof that is making sure they're
(05:00):
getting paid for the work thatthey're doing.
Speaker 1 (05:03):
And yet we see headline after headline about
some of the big chains closinghundreds of stores.
How do you explain the two?
It seems like a dichotomy.
Speaker 3 (05:12):
And I think, david, it's actually thousands of
stores from Rite Aid, Walgreensand CVS have closed, and it's
only going to get worse.
Right, walgreens was sold inthe last couple months and no
doubt there's going to be moreclosures, and independents are
actually closing at a fasterrate, if you can believe that
about two to one independentpharmacies are closing, and so
one of the things that we'vedone at LucyRx is we've
(05:34):
reimagined every element of howthe prescription care is
delivered in this country, and akey element is the pharmacist
and making sure that we'regetting the best value and
service from them.
That's part of the programsthat we've introduced.
Speaker 1 (05:47):
Is that what you call your SPARC program?
Speaker 3 (05:49):
Right.
So SPARC stands for SustainingPharmacy and Rural Care, and so
what it does, it's really threeprongs.
So one we want to reimburse thepharmacies more money for those
pharmacies that are in apharmacy desert.
They deserve that and they needthat.
They just have lower volumes.
We also advocate at the statelevel for smarter legislation,
(06:16):
and I gave you a couple examplesabout New Mexico and Idaho.
But we really need guidelinesfrom the federal regulators,
because each state needs to bepursuing this.
This is a national problem,right.
And when you think rural care,you might think, oh, is this
like Wyoming or Montana thing?
No, 46% of all counties in theUnited States have at least one
pharmacy desert.
So this is a national problem.
And then, lastly, david, wepromote the pharmacy as a
(06:40):
healthcare hub, right, becausewe know that that pharmacist can
provide other servicesvaccinations, preventative
maintenance, chronic conditionmanagement.
So we promote that pharmacy.
And so those are the threeinitiatives that we pursue
through that SPARC program tohelp keep these independent
pharmacies in business.
Speaker 1 (06:59):
You mentioned that it's a nationwide problem, and
indeed it is.
Has anybody approached folks onthe Hill and seen if there's an
appetite for any kind offederal regulation, or would the
states be a better venue forthat?
Then you've got 50 phone callsto make.
But where's that at?
Speaker 3 (07:19):
Well, it has to be right.
And so we're fortunate thatwe're outside of Washington DC,
and so we have connections withthe new administration officials
, and we've been advocating forfederal regulations.
And here's David, here's what Isay.
Okay, if you look at theAmerican Medical Colleges, they
had a report recently.
They're projecting they'regoing to have 86,000 physicians
(07:41):
shortage, a shortage of 86,000physicians over the next decade
or so.
In round numbers, we have400,000 licensed pharmacists in
this country.
200,000 are in retail.
Now, of course, a pharmacistcan't completely replace a
physician, but it can make a bigdent.
So when you think about thistidal wave that we have coming
(08:02):
with this aging population andthe physician shortage, the
answer is right in front of us.
We have 200,000 pharmaciststhat are around this country
that have been trained for sixto eight years in a clinical
environment and we're not fullyutilizing them, and so we've got
to change their scope ofservices so that we can not only
(08:23):
address the problem but keepthose pharmacies in business.
Speaker 1 (08:26):
So have you had any significant conversations so far
with folks in theadministration around the Hill?
Speaker 3 (08:31):
I have, and here's what comes up with the new
administration is a distrust foranything big right.
So they're very skeptical aboutdrug manufacturers, big PBMs,
the big retailers.
They absolutely believe thatthe average American is getting
the short end of the stick andthey're trying to figure that
(08:53):
out.
They're moving with urgency andwhen I've met with the
healthcare officials, evenbefore the new president was
inaugurated, they already hadtheir staff selected.
There's a mission to get thisdone and, david, it's Washington
DC and I've lived here my wholelife and I have seen a lot of
(09:15):
activity and oftentimes not muchprogress, I don't know.
I mean, I think for sure we'llsee more and more progress with
the states, but I would love tosee some federal regulations
come in, at least to give thestates guidance on how they can
be, you know, expanding thescope of a, you know, pharmacist
services.
Speaker 1 (09:33):
My oldest daughter and her husband live in the
district and so I completelyunderstand and they both work at
different pieces of that touchgovernment.
So I and I've been up a lot.
You know, with my involvementwith the National Association of
Benefit Insurance Professionals, I've been up there a lot and
so I understand it's kind oftake one step backwards, two
step, one step forward, rathertwo steps backwards sometimes,
but it's tough.
Let's, let's help the audienceunderstand a little bit.
(09:56):
But pharmacies don't run7-Elevens because they want to.
They've got grocery stores inthe front of the store because
their margins in the back, wherethe pharmacy is, aren't really
good.
What is a pharmacy average andwhat do they take on the work
that they do in the pharmacycounter?
Speaker 3 (10:15):
Well.
So, david, you've got to.
That's exactly right.
So over the years the back ofthe counter has really become
almost I'll call it a lostleader, because the price of
generics, the margins, are laserthin, right.
So a pharmacist might begetting 95% off on a generic
(10:35):
drug, so super thin margins.
But that could have been madeup with front store sales.
But now the problem is with,you know, let's say, amazon and
other big box retailers.
They've taken that share away.
And then the compound, theproblem we haven't talked about
this are the mandatory mailprograms.
So 20 years ago the big PBMsoftentimes put in mandatory mail
(10:57):
programs and, david, what yousaw over that 20 year period is
the delivery of medications forchronic conditions and specialty
meds has gone from 20%delivered through mail to 40%
through mail, and so that'staken business away from the
pharmacy.
And so now you don't have peoplecoming in to pick up their meds
(11:19):
and maybe picking up sodas orwhatnot on the way out the door.
But also you've eliminated aninteraction, a clinical
interaction with someone.
Perhaps someone was seeing thepharmacist once a month and a
conversation.
Especially in these rural areaswith independent pharmacies,
it's likely a conversation mighthave started around.
Maybe it was allergy season orthey had asthma or something
(11:40):
along those lines, and nowyou've robbed the patient of
that because now they have to gothrough mail, and so one of the
things that at LucyRx is wedon't have any mandatory mail
programs.
We want our patients to gettheir drugs where they want to
get them right, meet them wherethey want them, versus trying to
force them to.
You know, one size fits allsolution.
Speaker 1 (12:01):
Well, and the whole carrot in that program was that
you paid for two months and yougot a three month supply.
Is that something with awilling advisor and a willing
client, let's say in aself-insured plan where they're
building their own pharmacy plan?
Is that something that you guyscan accommodate?
Speaker 3 (12:17):
Not anymore, david.
So most of the drug costs inthis country are out of control
and we see employer afteremployer cutting back on
benefits because they just can'tafford it, and so that two for
three that you said, that's goneby the wayside.
That's no longer possiblebecause employers just can't
(12:37):
afford that.
And there's not that big of adifference between 90 days at
mail and 90 days at retail.
The pricing has gottencompressed over the last 10
years.
Speaker 1 (12:48):
Is it compressed to the point where you can make the
argument that there's virtuallyno difference.
So go to your local pharmacist.
Speaker 3 (12:55):
Absolutely, absolutely, and I think it's the
same.
That's why, when we let's goback to what we talked about,
david, about the independenceand the retail pharmacy chains
closing is because the marginshave gotten so compressed.
That it's you know.
Here's something this happenedjust this week, david.
So Arkansas passed yesterdaythat they're going to decouple
PBM.
You can choose.
(13:16):
You can either be a PBM or youcan be a retail pharmacy.
You can't be both.
Okay, because it's always beenthe Fox watching the hen house,
right when it's like.
If you're the PBM, you're goingto and guess what CVS has said
they're going to do?
They're going to shut down.
They have five locations inArkansas.
They're going to close thosefive locations, so they'd rather
be in the PBM industry.
So you can guess that there's.
You know, this is this is a.
(13:36):
They are on retail pharmacies,so they're going to close five
more pharmacies and that mightcreate five more pharmacy
deserts for all we know.
Speaker 1 (13:48):
It's just like the old story about.
You know, they asked WillieSutton, the famous Boston bank
robber, why do you rob banks?
Speaker 3 (13:52):
He said, that's where the money is yeah, I think
that's the same thing, Likewhere's the money?
It's in rebates and that'swhere the big PBMs run to.
Speaker 1 (14:00):
Yeah, it's a mess and it's getting messier and
messier and messier.
It is nice to see that some ofthe bigger PBM players are being
called on the carpet, and we'veseen some of that in the news
in the last couple of weeks, andso that's kind of interesting.
But it's a formidable foe tofight, isn't it?
Speaker 3 (14:18):
Absolutely, yeah, absolutely.
And we often talk about costversus price because the big
three will show you the lowestprice per pill, which makes
(14:39):
sense because they sell more gas, but Exxon is going to put you
in an SUV that gets like 11miles to the gallon, right, when
maybe you need a hybrid orsomething.
And so we talk about cost.
And to bring that back topharmacy, if you think about it,
if you're reimbursing thesepharmacies so little that they
go out of business, yourhealthcare costs are going to go
(14:59):
up, right, because now you havepatients that aren't taking the
medications, they're going toend up in the ER, they're going
to have chronic conditions.
So, don't you know?
Don't focus so much on price ofa pill, but think about the
overall, you know, healthcareequation and how you can get the
most care and cost-effectivesolutions.
Speaker 1 (15:18):
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Find your power with Benapower.
And now back to ourconversation.
So I know Spark is somethingthat you guys are working on.
It's near and dear to yourheart and to mine as well, but
you've also just recentlyannounced an integrated
specialty care network.
What's the challenge there andwhat does that solve?
Speaker 3 (17:13):
So what it is is we have about 130 specialty
pharmacies in our network andthey're affiliated with major
health systems.
So think, like BostonChildren's Hospital or
Dana-Farber cancer, so they'rewithin a health system and the
the reason that's important isbecause there's great studies
out there about how, if patientsare getting their care and
(17:37):
their medications at the sameplace, adherenceence goes up, er
visits goes down, your qualityoutcomes goes up.
There's actually a 32% lowerspend for patients that are
getting their meds where they'regetting their care.
And just think about it, davidif you have, let's say, a cancer
patient that's seeing theironcologist newly diagnosed,
(17:59):
right, if they can walk out ofthat doctor's visit and pick up
their oral meds, they're muchmore likely to be on those meds.
Or, let's say there's a sideeffect the next day they're on
the phone talking to their docversus waiting, you know, 8, 10,
15 days for a central fillpharmacy to send it.
And that's how the big threehave morphed, right?
(18:20):
So if you're working with a bigthree PBM and many others for
that matter they have a centralfill model and they require you
to go to central fill.
And so what we found?
Kind of reimagining howprescription care could be
delivered, and in some respectsit's similar to our pharmacy
desert program, which isempowering the pharmacist right
(18:40):
Because they're right there inthe community, and so what we do
is we have something called aspecialty concierge and when
someone's newly diagnosed, we'lltell them hey, did you know you
can get your meds right here inthe community, and why?
That's ultimately going to bebetter for them and their health
plan.
Speaker 1 (18:56):
Is this a case of everything old is new again?
I mean, I remember years agoand I can remember back a few
more years than you can when itwasn't unusual for there to be
pharmacies inside medicalfacilities.
Is this a resurgence, or havethey always been there, but
people just don't know aboutthem?
Speaker 3 (19:13):
Well, I think the traditional pharmacy has
probably always been there,right, where you could pick up
your kind of we think of yourold school brand and generic
drugs.
But the specialty drug markethas, you know, gone through the
roof right.
It's going to be $700 million,$700 billion by the end of the
decade, and so I think thespecialty pharmacy is probably
(19:35):
newer in the last 10 years andyou see health systems investing
in those facilities.
But it was funny when you saidold is new and new is old.
It reminds me back of if you goback 25 years ago, when Medco
was owned by Merck, so you had adrug manufacturer owning PBM.
You had Eli Lilly own PCS backthen and the FTC came out and
(20:00):
said, okay, this verticalintegration is anti-competitive,
it is not in the, i'll'll say,the country's best interest, and
put all sorts of guidelines inplace to separate those.
You know, fast forward 25 years.
We're right back to where westarted, which is through
vertical integration.
You have a company that mightbe manufacturing a pill, selling
(20:20):
a pill, getting paid toadminister the pharmacy benefit,
you know, insuring the patient,and there's no doubt that
conflicts emerge when you're inthat many businesses that are
related.
Speaker 1 (20:32):
I was a TPA back then and so I remember it well and I
remember the craziness that itcaused and how it just kind of
somehow parts of it seemcounterintuitive.
But it's interesting thatthings go around and come around
and, you know, kudos to youguys for bringing it to the
forefront.
It's nice.
It's nice to see a firm likeyours that's doing some
innovative stuff and doing goodstuff for the communities as
(20:55):
well.
There's not really an awful lotof that to go around.
So we've got a few minutes left.
Look into your crystal ball.
What do you see in yourindustry in the next couple,
five years?
Speaker 3 (21:06):
Yeah.
So I just want to go back tothe first point that you said.
It's not just Lucy.
There's a dozen innovative PBMsout there that see the same
opportunity that we see and areaddressing the shortfalls in the
market, and so we think we're aleader.
But there's other greatcompanies out there that see the
same things that we do.
Where is the market going overthe next five years?
(21:28):
So disaggregation is one thingthat I see a lot, which is
health plans and employerssaying, okay, I'm not going to
have one contract with a PBM,I'm going to have five contracts
, I'm going to have one personthat's going to provide
specialty mail claimsadjudication network.
And so you see thisdisaggregation model.
Blue Cross, blue Shield ofCalifornia kicked it off a
couple years ago and they werethe first to kind of jump in.
(21:51):
And now you see more and moreof that because I believe
employers and health plannersbelieve if you disaggregate it
you can drive bettertransparency.
You'll see it certainly moreand more at the state level
banning the pass-through ofretention of rebates level
banning the pass-through ofretention of rebates.
I've mentioned Arkansas earlier.
The states have gotten a lot ofmomentum in driving smart
(22:16):
changes.
I'd say it's a jump ball.
Whether or not the feds will getinto further regulating PBMs, I
don't know.
I wouldn't be surprised to seeif the big three break up.
If CVS ends up having to divestsome of the assets there's a
lot of pressure on Wall Streetfor them.
Would that be a more valuableasset if it was split up in
different companies?
But no doubt middle market nextgeneration PBMs like LucyRx are
(22:37):
going to continue to pick upmarket share and we see that.
You can read the press releasesof companies like LucyRx, you
know, winning new business inthe market.
Speaker 1 (22:48):
And that's a great place to end our conversation
for today.
David Blair, founder and CEO ofLucyRx.
David, great conversation.
We hope you'll come back.
Speaker 3 (22:56):
Absolutely, David.
I really appreciate youbringing attention to this
really important topic.
Thank you.
Speaker 1 (23:06):
I want to give a quick shout out to our sponsor
and our producer, hatcher Media.
Hey, if you need podcastproduction or professional
graphic design, josh Hatcher isthe expert to contact For more
information.
Visit him at HatcherMedianet.
That's H-A-T-C-H-E-R Media dotnet.
Speaker 2 (23:24):
This Shift Shapers podcast is copyrighted content
and may not be reproduced inwhole or in part without the
express written permission ofShift Shapers Solutions LLC.
Copyright 2024.
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