Unveiling the Hidden World of PBM Consulting

Trevor Daer, President and Founder of Granite Peak Analytics, reveals the hidden complexities of Pharmacy Benefit Managers (PBMs) and why specialized consulting is crucial for self-funded health plans. He shares his journey from corporate burnout to creating a company that helps employers navigate the convoluted PBM landscape and avoid overpaying for prescription benefits.

• PBM consulting helps benefits advisors navigate pharmacy complexity and secure better contracts for clients
• Granite Peak Analytics was founded after discovering independent pharmacies were being squeezed by PBMs while employers overpaid
• The pharmaceutical supply chain involves manufacturers, wholesalers (McKesson, Cardinal, AmeriSource Bergen), pharmacies, PBMs, and employers
• "The Big Three" PBMs (Optum, Express Scripts, CVS Caremark) control 80-85% of the market and are vertically integrated with insurance carriers
• PBMs have approximately 45 different revenue streams, creating misaligned incentives where they profit as drug costs increase
• Employers without specialized PBM consulting typically overpay by up to 50% on their pharmacy benefits
• Pharmacy costs have grown from 4-5% of self-funded plans to 25-30% today
• Rebates create perverse incentives where higher-cost drugs are often preferred over lower-cost alternatives
• Current trends include rising GLP-1 costs, specialty medications, and biosimilar adoption challenges
• Active management of pharmacy benefits is essential, especially with expensive new therapies

Episode Transcript

Speaker 1 (00:01):
You're listening to Risk and Resolve.
And now for your hosts, benConner and Todd Hufford.

Speaker 2 (00:09):
Welcome back to another episode of the Risk and
Resolve pod.
I'm your co-host, ben Conner,along with Todd Hufford.
Today we have our special guestis Trevor Dare, and Trevor is
the president and founder ofGranite Peak Analytics, which is
a firm that specializes in PBMPharmacy Benefit Manager

(00:34):
analytics, and I'm proud to saythat Trevor is our PBM
consultant.
So I'm excited for the journeytoday and hear Trevor's story,
maybe share what the heck a PBMconsultant is.
What in the world does thatmean?
And then get into the state ofthe PBM and RX world for all of

(00:56):
us nerds that care about thatkind of stuff.
Trevor, thanks for being withus.

Speaker 3 (01:03):
Thanks for having me and congrats on launching the
Risk and Result podcast.

Speaker 2 (01:08):
Yeah, thanks, we're having some fun so far.
So tell us a little bit aboutGranite Peak when you started it
, why you started it and kind ofwhat problem Granite Peak is
solving in the world.

Speaker 3 (01:26):
Yeah, absolutely.
It's kind of a long story soI'll try and keep it short.
But we first of all.
Your question is funny what theheck is a PBM consultant?
Because I was reminded of thisquestion not being all that
clear about a month ago by awell-known consultant that I
consider a friend and a clientand they were like what does PBM

(01:50):
consultant even mean?
I'm like, you work with us, youknow what a PBM consultant is
and they're like no, I mean likewhat does it mean?
What is it?
I don't really like I knowyou're valuable and I know you
help us, but what really is aPBM consultant?
So I started thinking about howour outreach happens and how.
I've always just assumed thatthe market knows Whether you're

(02:13):
a newer advisor or anexperienced advisor.
You just know what a PBMconsultant is.
Turns out that's not the case.
Highest level A PBM consultantis an individual or company that
supports your pharmacy benefitstrategy, primarily in the

(02:33):
self-funded health plan space.
So what being a PBM consultantmeans for us is partnering with
benefits consultants orthird-party administrators or
MGUs or TPA stop-loss carriersand helping them navigate the
complexity of pharmacy.
So what we do is, especially asa benefits consultant.

(02:57):
You've got all these pieces andparts that you're trying to
navigate and build and you know,pull this part out and then
plug this part back in and buildthe stack and make it all work.
And we call it kind ofunbundling the self-funded plan.
But then bundling it back up soit actually works is not an
easy thing to do.
So we sit on the side usuallyof the advisor as our client and

(03:20):
help them guide their clientsto the most cost-effective or
best-fit pharmacy benefitmanager, if you will.
So we view ourselves as reallyan extension of the benefits
consultant to help in what isreally a very complex and narrow
niche in the one of a thousandthings that they're working on

(03:42):
in a health plan.

Speaker 2 (03:44):
So when and why did you start Granite Peak?

Speaker 3 (03:50):
Granite Peak was the brainchild of a pharmacist
friend of mine and myself, andthis was September of 2019 is
when the LLC was actuallycreated and what facilitated it

(04:11):
was.
I went to work for a good friendof mine and pharmacist, mike
Matovich, and he had created acompany that was basically a
group purchasing organizationfor independent pharmacies, and
I had spent my whole career inTPA self-funding world and we

(04:31):
can get into a little bit lateron like what made me take the
leap out of it but about half mytime there was spent in
pharmacy benefits.
Mike managed a cost pluspharmacy that we had started, so
you might say we were way aheadof Mark Cuban in that regard,
way less successful when itcomes to brand awareness and

(04:52):
those types of things, but Ithink ahead of the game as far
as how do we bring transparencyto an opaque industry, and I was
the PBN.
I started peeling back the onionon the PBM contracts and really
realizing a lot of things werewrong or disingenuous and it
kind of lit a fire in me to likefix it, because I kept asking a

(05:15):
lot of questions that Iwouldn't get acceptable answers
to and Mike was the pharmacyoperator that when we brought on
clients and found the right PBMpartners.
They could be the mail orderpharmacy partner and so when I
left there, mike and I haddeveloped a reputation with a
lot of our TPA clients of justbeing like if they had pharmacy

(05:37):
questions they just came to us.
So although I went to apharmacy GPO as an employer, we
still did, like back of thenapkin, pbm consulting.
You know, does this proposalfor the new cost plus meal order
make sense for us as a plan?
Can you analyze our data andtell us?

(05:58):
You know things that maybe weshould be doing, that we're not?
And we would always just do itbecause it was like yeah, of
course we will things that maybewe should be doing that we're
not and we would always just doit because it was like, yeah, of
course we will.
Um, simultaneously, if what Ilearned about the independent
pharmacies and the dynamics withPBMs is they independent
pharmacies are like farmers, inmy opinion, like they bought.
They buy everything at retailand they sell everything at

(06:20):
wholesale and they don't reallyhave any control over the prices
on either side.
So, um, what we were trying tofix or I was kind of tasked with
fixing was going across montanaand meeting with payers uh,
regional carriers or smallmid-market carriers, work comp
companies, and they primarilyworked with what we consider the

(06:43):
big three pbms.
So the big three pbms are optum, express scripts and cvs,
caremark.
Those are the entities thatcontrol about 80 to 85 percent
of the market.
And what we were trying toeducate them on was from mike's.
He's a pharmacy owner and anowner of this group purchasing

(07:06):
organization was you're aMontana based company and your
PBM decisions are actuallydriving your community
pharmacies out of business.
They're paying them so low,below cost in many cases, that
they can't survive, and inMontana's rural right.
So in many cases this lonecommunity pharmacy is the only

(07:28):
healthcare you can get within 50miles.
Like they're not just thepharmacist.
They're the help you read yourlabs, you know, help you make
doctor appointments in thebigger city.
So they're really a hub of care.
And so our job in thesemeetings, or what we intended to
do, was meet with them and saydid you know that your decisions

(07:50):
and none of them knew right,the decisions you made to select
this PBA like you're impactingthem negatively.
And then my job was based on mybackground in PBM contracting
and management was to say oh, bythe way, you're not just
driving them out of business,You're getting taken advantage

(08:11):
of in the meantime, like you'renot paying the lowest you
possibly could.
So what your independentpharmacies are getting paid is
not what you're paying.
You're paying an inflatedamount and there's a middleman
in between that's taking a lotof that.
So you're driving them out ofbusiness and you're overpaying
for yourselves and your people,and we had about five meetings

(08:33):
Go ahead.

Speaker 2 (08:34):
So what was happening in Montana?
Independent pharmacies aregetting squeezed to the point of
they're selling something forless than what they bought it
for.
The employer is actually payingmore than what a market rate
would be for the medication, andthat value is being extracted

(08:55):
by a pharmacy benefit managerwho actually provides zero value
in the transaction outside oftaking the money from both
parties.
Right Outside of adjudicatingthe copay electronically and
facilitating payment, there'snothing really else that was
happening in that but really inany other market in the United

(09:17):
States economy.
You don't need to do a copay.
You just pay the price for themedication and you leave, or you
pay the price for the TV andyou leave, or you pay the price
for gas and you leave.
There doesn't need to be in aseparate party, and if it is,
it's it's a visa and they take3% Right, like yeah, well,

(09:43):
that's wild.

Speaker 3 (09:46):
Right Like yeah, well , that's wild.
So there were these marketdynamics happening and then, as
I got to understand whyindependent pharmacies would
group together to buy, is sothey?
would have a little bit morecontrol over their wholesale
price, that they were acquiringfor Right.
And at the time I joined Mikeand his team like they kind of
had that whipped acquiring forRight.
And at the time I joined Mikeand his team like they kind of
had that whipped, like he had areally cool mousetrap that he

(10:07):
had built that got him into somepricing that was really
unachievable for even mostlarger buying groups and group
purchasing organizations.
So he's like I need you tohandle the payment side, like
you need to educate these peopleand I'll help you.
So we tackled it from twodifferent vantage points.
But I was employed by hiscompany and we were representing

(10:31):
independent pharmacies.
We had about five of thosemeetings and at the end of every
single one whether it be thework comp provider, the regional
carrier, the you know, thebigger broker houses that had
self-funded business in Montanathey all said we had no idea.
What would you like us to doand which?

(10:56):
If you're trying to sellsomething to someone, that's the
best thing you can be askedright, like we had no idea.
What do you want us to do withthis information?
Well, guess what?
We weren't selling themanything, we were just educated.
And so in every meeting.
We're like, well, number one,we wanted you to be aware.

(11:20):
Number two, next time you'relooking at different PBM
providers or your contracts up,maybe hire a PBM consultant to
help you and like we canrecommend one if you get to that
point.
And three, maybe ask you knowyou'll this will resonate with
you.
Then maybe ask your broker whythey've recommended this PBM to

(11:40):
begin with, because they'reprobably getting paid to place
the business with them.
And they're like, oh, wow, yeah, yeah, I mean, that makes sense
, makes sense, okay.
So we, we walk out of thesefive meetings, or I guess I
should say we walk out of thesefour meetings and we drive
across the big state of montanaand get time to catch up and
we're like, man, that meetingwent really well, like they

(12:02):
really understood what we weretrying to tell them, like I hope
, I hope something will happen.
So then, after you know, a fewmonths of follow-up, like it's
not their core business, um,there's, we couldn't help them
do the work, so they just sortof like went on with the next
thing and we just became asqueaky wheel and it's like,
yeah, we get it, we understandthe problem, but we just don't
have time and energy andresources to deploy.

(12:24):
So after the fifth meeting Icouldn't even tell you which
entity it was we were meetingwith.
We're driving back.
This is funny because Mike's apharmacist.
I've been in the business for along time and like to think
that you know I'm a fairly quickstudy, but it took us till the
fifth meeting, coming back,where we had this light bulb

(12:45):
where we were like hold on asecond, we're not making any
impact, we have to do the workfor them.
They're literally inviting usto do some work.
They're saying we had no ideawhat should we do and we're just
leaving the meeting like, well,here's some ideas.
We'll talk to you later.
You know, meet you in sixmonths.
So we're driving back after thefifth meeting and we're driving

(13:09):
by Granite Peak and Mike goes doyou know what the tallest peak
in Montana is?
I'm a fourth generation Montanaand I pride myself on knowing
these things and I couldn't tellhim.
We're literally driving by it,I mean in the distance, and he
goes it's Granite Peak's granitepeak.
Oh my god, cool.
It's kind of weird that Iwouldn't know that.
I'm actually disappointed inmyself.

(13:29):
And he goes where do you thinkit is?
And we're a big state and we'rein the kind of south central.
What you see on postcards ofmontana is like glacier, right
northwest montana, mountainranges, the rockies, and I'm
just kind of thinking, and nowI'm embarrassed that I don't.

(13:49):
I don't know what it was and Idon't know where it's at.
So, my gosh, I don't know.
Mike, he goes, it's right there, it's literally out your window
and we kind of core also okay,I should know this, but I don't.
And it's not because I don'twant to know this, it's because

(14:10):
just nobody told me, nobodyeducated me on it, and it was
kind of like the parlay in thegranite peak, which is like
these people don't know whatthey don't know.
It's not because they don'twant to, it's because no one's
educated them appropriately.
And so it was that conversationplus like we have to do the
work.
But doing the work like apharmacist and an insurance guy
with excel spreadsheets are arecipe for disaster that sounds

(14:34):
like a bad joke, yeah yeah, it'slike pharmacist and insurance
guy walk into the bar with anexcel spreadsheet and yeah, they
walked out with nothing, butthat was where the idea came
from and it was like okay, well,I can't represent you, mike,

(14:56):
and your pharmacies and thesepayers, so we have to create a
separate LLC.
What are we going to call it?
Well, granite Peak Analyticsanalytics, because our joke was
gpa um.
Our combined gpa in college wasa 4.0, so it was like he had a
2.0 and I had a 2.0 um.
Not completely accurate, butalso not completely inaccurate,

(15:18):
so there's a lot of plays on thename which are kind of funny
when you get into the story.
But he was like okay, we'llcreate the company.
And I was like before we do it,though, we've got to find an
underlying data analytics engine.

(15:38):
We can't just do this withspreadsheets.
The data is too complex,they're not good enough with
excel to make this work.
So, anyway, we found a, wefound a foundational like data
pharmacy, data only analyticsengine and we're like okay, when
you create the company.
And then we created the llc as a50 50 partnership in september

(16:00):
of 2019, and I'll never forget,like as soon as I got the
articles of incorporation andthe secretary of state like came
through and I was like holysmokes, like I, I own 50% of
this business that we juststarted.
That is worth nothing.
Do I know enough to even bedoing this?
I was like I had this, like Iwas so confident until the

(16:23):
moment that the LLC was createdand, all of a sudden, the doubt
crept in.
I'm like do I know enough to beadvising people about this?
Surely there's people morequalified.
And it was kind of like I don'tknow.
I wouldn't call it impostersyndrome.
It was just like you know,you're going and you're
confident, and then, as soon asit gets real, you're like well,

(16:48):
wait, is this a good idea?
So that's that's where it wasstarted September of 2019.

Speaker 1 (16:53):
I'll stop there because that was a lot.
That's good, trevor.
I've always wondered why thePBMs never have gotten
disintermediated.
My grandfather graduated IU MedSchool in 1926, and I've got
the fortunate benefit that hekept all of his canceled checks.
And one night recently I tookmy daughter to dinner and just

(17:13):
as some way to pass the time aswe're waiting for the food, I
brought out this brick of checksand they're large size and
they've got these funny littleholes in them to cancel them.
But you'll find thisinteresting.
He regularly wrote a check to acompany called the Upjohn
Company, which of course nolonger exists.
I'm not exactly sure whichpharmaceutical company bought it

(17:34):
.
I think it may have beenJohnson Johnson.
But here, as a local physician,he's buying pharmaceuticals.
I have no idea what it was, buthe's buying it directly from
the manufacturer.
Now, those checks were writtenin the early 30s.
I have no idea what it was, buthe's buying it directly from
the manufacturer.
Now, those checks were writtenin the early 30s.
So sometime between the early1930s in America and today there

(17:54):
was this creation of awholesale market which became
the PBMs.
So if I'm a manufacturer of anykind of medication, I kind of
look across the landscape today,and there are some big players
right CVS, walgreens, walmart,kroger, costco.
I can totally understand why amanufacturer of drugs would not

(18:16):
want to sell to small,independent pharmacists or even
small grocery stores that havepharmacy operations.
But why do manufacturers stillsell through PBMs?
Or, I guess, conversely orinversely.
Why does a Kroger, if you willwork with a PBM, when they've
got so much volume?

(18:37):
Why aren't they buying directlyand why haven't the PBMs been
disintermediated by these largeretailers?
Boy, that's a loaded question.
Um didn't mean the reality is,yeah, the reality.

Speaker 3 (18:52):
what is on the buy side?
You have what are calledwholesalers, and really they are
just a distributor of themanufacturer's medication.
So there's actually a big,there's a big three on the
wholesaler side.
It's McKesson, cardinal andAmerisource Bergen.
Those are the big three on thewholesaler side.

(19:15):
So they negotiate contractswith the buyer of the
pharmaceutical.
So in most cases is thepharmacy on what they, what they
can get the drug from themanufacturer from, have a
reasonable markup or margin orin some cases, unreasonable

(19:36):
markup or margin and sell it tothat pharmacy.
And so then you have you havethe buy side, which is we're
buying from one of those bigthree.
And so then you have the buyside, which is we're buying from
one of those big three,regardless of whether you're a
mom and pop or you're.
Now there's kind of one-off likegeneric wholesalers and stuff
that you'll see across themarket, but by and large like

(19:57):
it's the same on the buy side asit is on the PBM side.
It's just different companies.
So there's a big three thatcover most of the market side.
It's just different companies,so there's a big three cover
most of the market.
So if I'm a Kroger, um, youknow I'm likely working through
one of those wholesalers toacquire my drugs.
Now the whole point of awholesaler right Is like they

(20:18):
can get the medication to me ontime and they can negotiate a
better deal on those with themanufacturer than I could
directly.
So there's a middleman in thatscenario and very few entities
are big enough to not onlynegotiate the price point that

(20:39):
you can get through a wholesaler, but also just the facilitation
of getting it from the dock toyour pharmacy.
The logistics of it yeah, thelogistics side of it.

Speaker 1 (20:48):
Okay, I hadn't thought about that.
That's a good point.

Speaker 3 (20:51):
Yeah.
So that's a very high level ofwhy you see most of the
pharmaceuticals running throughthose bigger wholesalers,
because they've got thelogistics side figured out and
they're constantly negotiatingwith the manufacturers.
Now on the payment side, youhave the pbm.

(21:11):
Pbm doesn't buy or sell aproduct.
Um, all they do like take their, unless they're owning their
own pharmacies.
Take that out of it like thetrue.
The true two primary componentsof a PBM is negotiate with the
pharmacy what you're going topay them and negotiate with a

(21:31):
manufacturer on brand drugs whatyou're going to get a rebate
for, two foundational thingsthat a PBM do.
Well, if you go back to thethirties, there were no rebates.
You know drugs were inexpensive.
Um, well, now you look at aself-funded plan and like a
quarter of the spend, 30% of thespend, is going to
pharmaceuticals.

(21:52):
It used to be 4% to 5%, yep.
So what started as an idea?
So it's almost like there'salways a couple of bad actors
too, like pharmacies that weremaking too much money.
So then we input a prescriptionbenefit manager to negotiate
and make sure that pharmaciesdon't charge too much to health

(22:13):
plans Like this is kind of likeas commercial health plans are
coming of age.
You know what was ERISA 1970,something you know pretty soon.
Now you've got self-fundedplans and I don't have this
memorized.
But the first PBM was reallyjust an ID card and to not

(22:36):
necessarily adjudicate thebenefit but to obtain the data,
because it was more of a managedcare play.
These health plans at the timedidn't have the pharmacy data
and they realized if we can getthe pharmacy data, our picture
of health of this individualbecomes a lot more clear.
So that's where the first PBMwas kind of founded, under this

(22:58):
great idea of we need more dataon these people to help them
manage their care.
Well, fast forward through theyears it became look at all this
data we have Now.
Let's vertically integrate.
Now our job is not necessarilyto negotiate on their behalf,
it's to negotiate on our behalfand extrapolate all of that as

(23:18):
profit.
Oh, by the way, we are eitherowned by a mega insurance
company or we're so big andprofitable we bought one of the
biggest insurance companies inthe country so.
So that's, you know, the costand the complexity of
pharmaceuticals.
I think has been one thing, butit like the negotiation with a
pharmacy on what you're going topay them.

(23:40):
There's not much negotiationthat goes on there, so it's
really just a transaction of hey, I'm supposed to have a $5
copay on this generic, thegeneric's 15 bucks.
My card runs through a computerand it allows the patient to
pay five instead of 15 and nothave to do what we consider

(24:01):
reimbursement plans.
Right, I pay 15 and then Isubmit.
All.
Right, the shoebox effect.
Right, I'll keep all mypharmacy receipts and I'll
submit them all to my healthplan.
That's what a lot of folks usedto do.
It's just a full reimbursementplan.

Speaker 2 (24:13):
So PBMs have evolved your grandchild 95 years later.
Right yeah, In the form ofcanceled checks.

Speaker 3 (24:22):
Exactly, exactly.
I don't know if I answered yourquestion other than to say it's
highly complex and there's alot of hands in the pot and
there's a lot of money involved,other than to say it's highly
complex and there's a lot ofhands in the pot and there's a
lot of money involved.

Speaker 2 (24:33):
So is there a world where pbms, like health plans,
could operate without a pbm?

Speaker 3 (24:37):
yeah, that's what I was gonna ask yeah, I think when
you talk aboutdisintermediating, I think that
world can exist.
Let's take, like, if you lookat generic drugs in general,
fairly inexpensive right.
Um, now the pricing changes andvery substantially depending on

(25:00):
your pbm deal and the pharmacyyou go to and all those things.
But in general the average costof a generic should be about 20
bucks.
So do you really need anintermediary to facilitate that
transaction?
It's kind of like do I need, doI need, an insurance company to
facilitate my primary care andinsure my primary, my annual

(25:22):
exams?
Like no, you don't.
Like our car insurance doesn'tcover oil changes, so why are we
trying to insure these smallexpenses?
So I do believe that if you justlooked at the generics, and yes
, there's outliers, but therecould be a world where you just
had an adjudicator, um, or likebecause with the evolution of

(25:49):
health plans and highdeductibles and things like that
, like people want credit forwhat they're paying.
So really that would be thedisintermediation, where you pay
a flat transaction fee, theymake sure you get the right
benefit and it applies to yourbenefits and that's really their
only job.
Like you don't need tonegotiate a better deal on a $7

(26:11):
generic.
Like you got it for $6.50?
Okay, great.

Speaker 1 (26:16):
There's no juice.

Speaker 3 (26:18):
Yeah, there's no juice there.
So I do think Ben's actuallyasked me this question before.
Why do we even need these guys?
And that is usually my answerNow.
The problem now is you havehigh-cost brand drugs.
Well, in any given brand druglet's just say typical, don't

(26:38):
even talk about specialty themanufacturers compete for
formulary placement by offeringwhat's called a rebate, and that
rebate can be 50% of the drugcost, percent of the drug cost.
That's why pbm still have amajor place in the american
ecosystem is because of howmanufacturers get placed on

(26:59):
formularies to then get in thehands of consumers, and it's a
rebate bribe that can sometimesbe really substantial.
So, without some type of entitynow you can call it whatever
you want pbm or pba or someonethat's going to the manufacturer
and saying hey, we had apatient fill this and you know

(27:21):
we put it on this tier.
So they would.
We know you're offering arebate for that.
Give it to us.
I don't know who else does that.
So so couldn't we?

Speaker 2 (27:32):
just get rid of the PBM.
Have someone like Stripe orVisa adjudicate payment, keep
Granite Peak involved, and thenwhat Granite Peak does is it
takes the information and thenyou go to the manufacturer and
say you owe the plan this rebate.
Get rid of the pbm altogether,use a, you know, have a visa or

(27:57):
some sort of payment methodologythat takes like a flat dollar
amount per transaction and thenwe're on our merry way yeah, we.

Speaker 3 (28:07):
I mean we'd end up being essentially a core
function of a PBM at that pointand we're submitting to the
manufacturer.
Now the problem with that is atleast starting off.
I don't have a lot of leveragewith App-V so you could say, hey
, we're running you throughGranite Peak, go get me a great
rebate on Humira.
Well, app-v is going to gonumber one.

(28:29):
We don't know who you are.
Number two, if you want arebate, it's going to go number
one.
We don't know who you areNumber two.
If you want to rebate, it'sgoing to be way lower than
anyone else because you don'thave any volume.
So then we get to a point wherethe bigger PBMs are going to
come in and say these guys aregetting like half the rebates
that we can get.
And that's unfortunately howcompetitive bid processes still

(28:49):
place a high level ofreliability on how much rebates
we can get.
So if I'm showing your clientthat through Granite Peak and
Stripe I can in a year get them$100,000 in rebates in the
disintermediated arrangement,and one of the more established

(29:09):
PBMs is like we can get you$300,000.
Well, which one are you goingto take?

Speaker 2 (29:14):
Should employers be buying that way by looking at
rebate value?

Speaker 3 (29:20):
My opinion is rebates are an unfortunate piece and
part of our pharmaceuticalsupply chain.
You can hate them all you want,they're a piece and a part and
they've gotten so big that youcan't ignore them.
So should you get them whenthey're available?
Yes.
Should you chase them to getthe largest rebate possible?

(29:42):
No, because typically if youchase a rebate, you're not
paying the lowest possible price, right?
It's like, for example, you'vegot a $1,000 drug that offers a
$600 rebate.
Your net cost is 400.
Well, that's one of the gamesthat PBMs play is like.
Well, we're going to put thaton the highest tier because

(30:05):
we'll take a chunk of thatrebate when it comes in.
Well, why wouldn't you put thedrug that's only $250 on the
formulary and take that highlyrebatable one off?
Well then, you can't hide yourpricing and make money here and
make money there.
So it always comes down toalignment of incentives, and the
PBMs in general, theiralignment of the incentive is to

(30:29):
, especially in the largermarkets.
They answer to Wall Street theyneed to make money, and they
make money as costs go up, notas they hold costs down.
So understanding that thenallows you to evaluate different
opportunities, right To dothings a little differently.

Speaker 1 (30:47):
Go ahead, Todd what would happen if tomorrow rebates
were outlawed?
What would the downstreamreactions be?
If all rebates were outlawed,what would the downstream
reactions be.

Speaker 3 (30:58):
If all rebates were outlawed, that would be a great
day.
I think Some unintendedconsequences I can't think of
would obviously occur.
But if rebates were outlawed inthe US, I think you'd see more
pricing parity with other tierone countries where we've gotten

(31:19):
rid of the rebate game.
So the pricing for a brand drugspecifically, you have to
compete on price, like net price.
There's no more back end rebate.
There's no more net price.
There's no more back-end rebate.
There's no more bribe.
There's no more steerage.
There's no more steerage,unless it's like we'll give it

(31:39):
to you at 400 bucks and we'llgive it to you at 600.
It's no longer like well, we'llboth give it to you at retail
at a thousand, but on the backend I'm going to pay you more.
It's just like here's the price.
And then let's compete onclinical efficacy.
And why are drugs better?
That's another problem.
It's almost like we'd have tooutlaw rebates and then we'd
have to change the FDA approvalprocess to actually consider

(32:04):
clinical effectiveness, whichother countries do Right.
We just don't like.

Speaker 1 (32:09):
We approve a drug and don't consider the fact that
maybe better, morecost-effective drugs are out
there do you have a feel forwhat percentage of the pbm
revenue is in rebates versus anyother sources of their revenue?

Speaker 3 (32:24):
it's definitely changed over time.
There's a great um, there's agreat graph and I'm blanking on
the name of the company that putit together but it basically
showed PBM revenue over time andwhere it shifted.
So I'd say rebates used to be ahigher percentage of revenue

(32:46):
for them, but over the yearsthat's been targeted.
So whether it's been targeted,you know, by public perception,
um legislation, federalinvestigations, yeah, or
consultants saying we want allour rebates, why are you keeping

(33:08):
those?
Those should go to employers.
The first thing they did isthey just shift.
So in a world of like, we haveto maintain a certain margin.
The PBMs say, okay, well, we'llgive you 100% of the rebate,
but now we changed thedefinition of rebate, so we'll
give you 100% of what we'vedefined but we're still going to

(33:29):
keep it over here.
So I wouldn't trust a lot LikeI think gosh Optum just came out
and said we already passedthrough 98% of rebates and now
we're going to pass through 100.
It's like that seems a littledisingenuous to me.
But you can kind of track Gosh.

(33:51):
I really wish I could give ashout out to this company
because I think it's nephronresearch is the name of the
company, but they have trackedpbm revenue over time and it
went from like highly spread, somaking a lot of margin on
generics between what we pay apharmacy and what we bill a plan
to rebate and manufacture fees,and then now it's primarily in

(34:15):
specialty pharmacy, like if youown your own specialty pharmacy,
that's where all the costs areand that's where we can generate
more revenue.
We'll pass through more of therebate.
So it's a complex question tosay it depends on the employer.
Like we've seen employers wherethe broker was keeping all the
rebate, so PBM was making zeroor a portion thereof.

(34:39):
I don't think they're makingzero, but the broker was keeping
all the rebate, not passing it.
That's crazy.
Yep, yeah, wild, like fall offyour chair, type numbers right
when you're like how is that?
And then you talk abouttransparency and you look at the
deal and you're like well,technically they were
transparent.
They wrote on this contractlike we are going to absolutely

(35:00):
hose you and make too much moneyand the employer signed it.
So, you know, it's like theywere transparent.
That's what we all want, right?
Is transparency?
Yeah, that that's a long-windedanswer, which is typical of the
answers I give, because itdepends.
But the larger pbms that haveprime, the big three that have

(35:20):
primarily worked on spreadtraditional type arrangements
rebates have been a part oftheir revenue stream for a long
time and they've just simplyadapt to well, what do we call a
rebate?
What do we not call a rebrebate?

Speaker 1 (35:34):
So here's the visual I'm coming up with, Trevor, I've
got on the far right side, I'vegot the manufacturers.
I've got Lilly, I've got AbbVie, I've got all these
manufacturers of drugs.
On the far left side, I haveemployers that have their
employees that they're trying toprovide for, Right smack in the
middle we have the pharmacist.
Okay, so those are threedifferent parties, but then
there are two intermediariesBetween the manufacturer and the

(35:58):
pharmacist.
We have basically the grouppurchasers the McKesson, the
Cardinals, the Amerisource,Bergens, and so every pharmacy,
whether it's Kroger down to yourlocal one store, mom and pop in
small town America, they'reusing this wholesaler to
negotiate with the manufacturer.
Then, in between the pharmacyand the employer, who's

(36:21):
advocating upon the employee orthe American population, you
have the PBMs.
Now let's camp there for asecond.
We also have the big three.
Right, Our whole country isbased on the big three.
Every industry has a big three.
We've got Express Scripts.
Seems kind of unrelated toanybody, seems pretty
independent.
But then we've got CVS,Caremark.
How is it that an employer issupposed to be negotiating with

(36:46):
the pharmacies when the PBMitself is owned by, if not the
one of the largest pharmacies,and then the third one, Optum?
Many people know most don't isa UnitedHealthcare entity, so
now it's a.
You know it's a pay.
How do those three relate toeach other, and is one better
than the other in their setup?

Speaker 2 (37:06):
Well, Todd, fact check on that Express Scripts is
owned by Cigna.

Speaker 1 (37:11):
Oh, that's right.
So we have two plans that ownit, and one is owned by the one
you're trying to negotiate with.

Speaker 2 (37:17):
And CVS owns Aetna, so they did the reverse
acquisition.
So they're all verticallyintegrated.

Speaker 1 (37:26):
So how does that work when you're trying to negotiate
Trevor?

Speaker 3 (37:31):
Well, talk about misaligned incentives, or we
call you know fox guarding thehen house.
When you look at a core, thecore duty of a PBM is to
negotiate with pharmacies.
Right, I mean, that's just likeat the highest level we want.
I, as an employer, will want myPm to negotiate a price with

(37:55):
the pharmacies.
That is fair.
If my pbm owns 15 000 retailpharmacies, what's the
likelihood of them negotiatingwith themselves?
Really, really well, I mean,you're like it's just the math
doesn't math right.
And then you add in mail orderand then you add in specialty

(38:17):
the.
The amazing thing about um cvsis like now they're into
manufacturing, now they'remanufacturing humera,
biosimilars.
So now not only do they controlthe benefit, design, the
pharmacy, pharmacy reimbursement, they're controlling

(38:37):
acquisition costs anddistribution.
Talk about verticallyintegrated.
How that's legal, I have noidea.
It's like it's got to be aloophole, um but and then sold
in a package, probably a rebateto Congress on that one.

Speaker 2 (38:53):
Yeah, you know what I mean.
Yep, yeah, probably.

Speaker 3 (38:56):
Yeah.
So that's why a lot of timespeople say, too, they're like
well, what's the likelihood ofyou know PVMs being outlawed or
you know this happening and I'mlike it's too much money?
Yeah, pretty pretty slim tonone, like it's a bipartisan.
They agree pharmacy costs areout of control.
They agree that what theyunderstand of pbms is probably

(39:18):
not great, um, what they don'tagree on is wow, I'm gonna lose
that big old check, um, and whatpharma has done a good job of
is started painting the pbm asthe bad guy, because it used to
always be big pharma.
Right, big pharma has done agood job of is started painting
the pbm as the bad guy, becauseit used to always be big pharma.
Right, big pharma's greedy, um,you know, big pharma fueled the
opioid crisis, all thesedifferent things, and big pharma

(39:42):
was always in the crosshairsand pbm just kind of operated
under the like we're just doing,god we're just doing.
God's work over here negotiatingwith those big bad guys.
Well, they've slowly built upthese massive, massively
profitable enterprises.
That is fine, like I'm I'm acapitalist.

(40:04):
Like go do good work and makemoney, but doing it under the
guise of like we're helping,when there's so many misaligned
incentives and places they'regetting paid.
Like I think last time welooked at like different ways of
traditional PBM can get paid,it was like 45 different ways
they can make money.
So when you go to negotiatewith those entities, you just

(40:26):
kind of know what you're goingto get.
It's like so it's an educationprocess with the client.
What you're going to get, it'slike so it's an education
process with the client.
I can get you to better or lessbad, but I can't.
I can't align someone'sbusiness model.
I can't realign that through acontract.
Even the best negotiation, thebest you know scale, whatever it
is like, I can't change theirbusiness philosophy and model

(40:49):
through a really good contract.
And they understand that andthey get like you know.
Then there's other options outthere.
There's the middle market thatis looking at the 85 percent
dominated by the big three andsaying that's a lot more
prominent and get validated bythings like Mark Cuban putting

(41:13):
his name behind some of them bylawsuits that are coming out as
far as like Arisa based lawsuitswhich I think two of the three
have been thrown out already,but I don't think they'll stop
so did I answer your question?

Speaker 2 (41:30):
Yeah, yeah, okay, well to think of.
Like you, you say that it'svertically integrated fox
watching the hen house.
You know who's going tonegotiate with themselves, but
you know there's really only oneentity that can get involved
and provide pressure andcreativity and that's an

(41:54):
employer.
That is the only party.
I guess Congress, they couldlegislate that, but if they're
getting a rebate themselves, ifyou will, you know, from from,
from these companies to allowthem to stay intact, and
Congress really doesn't knowwhat they're doing anyway.
So really it comes back to asavvy employer with being

(42:16):
headstrong and creative.
Right, like that's it.

Speaker 1 (42:18):
Well, and having a partner that can adjudicate it,
because an employer bythemselves can't go to
pharmacies and make the plan.
They've got to have anindependent PBM that's willing
to work on their behalf, right.

Speaker 3 (42:32):
Yeah, and a benefits advisor that gets it and can put
it together, and a.

Speaker 1 (42:38):
PBM consultant so.

Speaker 2 (42:41):
Yeah, I mean, I was going to ask about that Trevor,
like, what would you say to anemployer who, at this, at this
stage in the game?
And obviously, like, let's bereal, you, you stepped out into
this because you saw the need.
So you're, you're biased to the, to the concept, but like, like
, what is an employer facing ifthey don't have somebody that is

(43:02):
special, a specialist, aconsultant, in this PBM space?
Like, what are they facing ifthey don't have someone like you
on board?

Speaker 3 (43:15):
I mean overpaying substantially.
By substantially I mean upwardsof 50% sometimes on kind of all
facets of their pharmacy plan.
So you've got you've got allthese different areas where PBMs
can make money and theirresponse when getting pressure
is always like well, our dealsare negotiable.

(43:38):
It's like well, if you don'tknow how to negotiate it, and
why would you expect amanufacturing company to be able
to negotiate a pbm contract?
Like that's what they face.
And those are the things weidentify over and over again
where it's like you know you'vegot clients who have been with

(43:59):
the pbm for years and years andnever renegotiated their
contract.
So it's st, stale and it's oldand the PBM is making money hand
over fist, but until the painis too great or they realize
somebody educates them and helpsthem realize like yeah, they
take you golfing and do allthese nice things because
they're making so much money onyou, it's not because they're

(44:21):
keeping your cross down.
Sometimes you to help andthat's where we come in is
educate with independent data,like we're not trying to sell a
bill of goods.
It's like we'll just tell youwhat the data shows us and you
can make an informed businessdecision just like you would any
other business decision youmake.
So I will caveat that with, likeI've said multiple times, two

(44:43):
primary things.
One, I don't think our businessshould exist.
It shouldn't have to, like wesaw a need.
Um, we've been fortunate towork with great partners and
help a lot of folks, but if pbmsdid what they say they do, we
wouldn't need to exist and,candidly, we shouldn't need to.
It's just that's how theAmerican pharmaceutical system

(45:04):
works, is they're going toextract as much profit and
revenue that they can andbasically put it back on the
buyer who's writing the check,which is the employer and the
patients.
It's their money, right?
Pbm is not going at risk foranything.
They're just taking theemployer's checkbook and writing
checks on it.
Right, taking the employer'scheckbook and writing checks on

(45:25):
it, right?
So if, if, something.
And then the second thing Ialways it's always weird because
people are like you're tellingme your business shouldn't exist
.
I'm like it really shouldn't,like it does and there's a
reason for it, but like ifeverybody did what they're
supposed to do, we wouldn't needto be here.
And then, secondarily, like ifCongress fixed it, if they did
something and they've madeprogress in the past few years,

(45:47):
honestly, like they've given ussome gifts that I never thought
they would.
But federally, if they couldfix it, I would be OK with that.
Like if they just likelegislated me out of a job and
everybody in America all of asudden could afford their
medicine and stay compliant andall the games were kind of
removed, like I'd be totallyokay with it.

(46:07):
I'd find something else to do.
I don't know if I'd be aspassionate about it.
I'd probably have to be like ayouth sports coach or something.
But uh, like I, that's what I.
That's how I really feel is weshouldn't need to exist, but we
do and we and then if we everdidn't need to exist, like that
means that hopefully theamerican people are getting the

(46:28):
best deal on their medicine yeah, unfortunately, I don't have a
whole lot of confidence that thecongress is gonna gonna do
anything about it.

Speaker 2 (46:39):
I mean, I, I just thought in this last political
cycle, when, when, uh, when acongress person or the president
or whomever like celebrate thatthey negotiated like five drugs
, it's like, wow, good job, guys, you negotiated five drugs.
How many are there again?

(47:00):
Yeah, like, get out of herewith this.
You know, like I don't if, if I, if they're, if they're dancing
the celebration dance on fivedrugs.
Like I don't have a whole lotof hope that we're going to get
a movement on that front.
Um, so, um, no, no, along theconsultant path, I can say from,

(47:23):
from our perspective, um, ourpartnership has been fantastic.
Um, and the consultant path, Ican say, from our perspective,
our partnership has beenfantastic.
And what I've appreciated aboutthe partnership is number one.
It's a partnership that'scommitted to excellence and
making sure that we're holdingfolks accountable, good folks
accountable Like I, like our PBMpartners.
I think they are well-intended,um, but there there needs to be

(47:47):
accountability and we, we foundopportunities there.
Um, you know, just a slightrounding error that you found,
my friend, where, even just lastquarter, we uncovered that,
just because of a manual, amanual entry error, uh, we found
, uh, almost a half a milliondollars of rebates that should
have been paid, that weren't,and they may have caught it

(48:09):
later.
But we didn't have to wait tilllater.
We were proactive and Trevor'steam found it, and so it's just,
we're keeping our eye on theball.
We're committed to excellence,we're committed to sound
practices on the contract sideand that sort of thing.
So, number one I think that'sbeen fantastic.
Number two is not only are wereviewing data, trends and those

(48:34):
sorts of things, but we'rehaving strategy calls about how
do we do things better.
Have those dream calls too,really, where it's like can we
replace a PBM?
Can we do it?
Is there a way to do it?
And going back and forth andhaving an expert to you know
sharpen the saw with has beenfantastic.

(48:58):
If there's a business leaderout there who is not connected
to a pharmacy benefit consultantwithin their health plan, it's
a huge mistake.
I can say that I know that.

(49:19):
Trevor, when I first heard youkind of share your business
model, like immediately, I waslike we got to have something
like this on board.
Do you remember who you wereintroducing at that conference
that I met you at.
Do you remember that?

Speaker 3 (49:28):
Yeah, I was introducing Dr Marty McCary, I
believe.

Speaker 2 (49:32):
Yeah, fda director.
Now he wasn't then no big deal,I think I called him a goat.

Speaker 3 (49:40):
I was like he's the Michael Jordan of you know, of
all these things.
I can't remember what all thethings were, but it's pretty
cool.
Yeah, it's Marty.
Dr McCary has always been likesuper forward thinking and, I
think, at least well intended.
So yeah, and he always speaksvery, very well.

(50:01):
So I thought he knocked it outof the park, but yeah, that was
it.
Yeah.

Speaker 1 (50:05):
The funny thing about business.

Speaker 3 (50:06):
Business too, I agree .
I agree that was a great pick.
I always think it's funny too,because that was pretty early on
in our journey as a company andyou were working with a pretty
good PBM at the time.
So even after we met, I reachedout to just say like hey,
really enjoyed meeting you.
I just want to tell you likeyou're working with a good

(50:27):
entity, like there's probablynot a lot of room for us to help
you at this time, like kind ofpigeonholed myself into not
winning a deal, and you werelike no, I need your help, like
right now on this group, and Iwas like okay, yeah, we can do
that.
Maybe I should have led withthat, I don't know, but it just,
it happens organic and I thinkour partnership's been great
because of that, because we'renot afraid to just be direct

(50:48):
with each other.
And I do feel like the dreamkiller sometimes, because Ben
comes with like these amazingideas and I'm like man, ben, I
just don't know, see how that,like I can't get there in my
mind, but maybe it's stillpossible, right, I don't want to
kill the dream, but that'swhere I think we've come up with
a lot of cool, creativesolutions for our clients, just
starting with this big what ifand then kind of tailoring it

(51:09):
back.

Speaker 2 (51:12):
So it's been a pleasure.
It's been very good, and one ofthe core values for our firm is
excellence in the details, andthere is no way a broker can do
everything and if they can, Iwouldn't believe them.
It's impossible.

(51:32):
You have to surround yourselfwith the subject matter experts
that can elevate everyone's game, and so you know we always look
for those.
First of all, we demandpartnerships that make us
excellence and excellent in thedetails, but we also, you know,
subscribe to that, to that idea.

(51:53):
If we find the right partners,somehow one plus one ends up
equaling five.
When you find the right partner, that math actually happens and
it's it's.
It's wrong math, but it ittends to exist Still maths?
Yeah, happens and it's, it'swrong math, but it it tends to
exist still maths, yeah, yeah,it does.
Um, before we, before we closeand before we get to our final
question, I wanted to talk for alittle bit about, um, just the

(52:15):
state of of pharmacy, um, sometrends to watch out for, uh,
some things that you're seeingfrom data and information, um
that you think will beopportunities or challenges that
can ultimately be opportunitiesfor employers in the next, you
know, maybe through the end ofthe year, as things are

(52:38):
happening in the PBM andpharmacy world.

Speaker 3 (52:43):
Yeah, I mean trends, boys.
I mean all the trends are upand it's it's our favorite um.
I, I guess we I would call it afour-letter word.
You know glp ones um, that's atrend that everybody's
experiencing, some worse thanothers.
I think being able to beopen-minded and creative about

(53:05):
solutions there andunderstanding the difference
between covering for approvedconditions like diabetes and
covering for things like weightloss that most plans don't cover
, that's really critical andimportant.
Specialty drugs aren't goingaway.
They're in the pipeline, moreand more of them.

(53:25):
Specialty drugs aren't goingaway.
They're, they're in thepipeline, more and more of them.
Manufacturers are are peelingback on generics.
Generics have been deflatingfor a long time and you know
it's hard, it's hard to makemoney in that market.
So I think they're focusing alot of their efforts on
specialty drugs and have beenfound, you know, to be

(53:45):
successful and it's amazing.
It's amazing time to be alive inthe sense that science has come
so far.
And you know I look at a lot offolks that have like rheumatoid
arthritis and they can use oneof these biologics to help them
live, you know, virtuallypain-free life.
It's amazing, you know my, mygrandfather passed away of.

(54:06):
You know complications fromrheumatoid arthritis at a fairly
young age.
So the fact that we have thisscience available is great, but
it's always balancing, like atwhat cost and who's going to pay
for it, and that's you know.
Budgets are strained, andhealthcare budgets especially.
Budgets are strained, andhealthcare budgets especially.

(54:29):
So what I see in the data andthe trend now we've got tariffs
right Everybody's like well,what's going to happen with
tariffs?
I don't know is the answer.
I get the intent.
The intent is to bringmanufacturing back to the United
States because the majority ofdrugs are not manufactured here.
Will the tariffs work?
I don't know.
Will they be passed through?
Right now, pharmaceuticals, asof today, have been exempt from

(54:52):
the tariffs, from what I've seen.
You know, as of this morning,will that continue?
I don't know.
But those are things toconsider.
You know, maybe more into 26and watching what happens there.
So you've always got.
You know, every January mostbrand drugs increase 10-ish

(55:14):
percent, 9.9%.
So you've got continued kind ofinflation.
You've got utilizationincreases.
So you know, I don't thinkanyone's got a silver bullet,
but you're surely behind theeight ball if you're not
actively managing your pharmacyplan, like if you just executed
a three year PBM agreement andyou're just like, well, let it
ride.
And you know, increase premiumsand stuff to like.

(55:39):
You're really missing out outand at this point, based on the
fact that, like putting yourhead in the sand and saying I
didn't know is not really areasonable defense, especially
in our, in our RISA case anymore, like pharmaceutical expenses
are so front and center in thenews and in lawsuits that you

(56:01):
can't be like, well, I didn'tknow.
Um, you have to be doingcertain things to show that you
can't be like, well, I didn'tknow.
You have to be doing certainthings to show that you've done
your due diligence and you'vebeen a good fiduciary of your
plan.

Speaker 2 (56:12):
Yeah, so from the lawsuits you're talking about
fiduciary responsibility to themembers of the plan.
And just for context, aroundtariffs we're recording in early
April.
So obviously this will bereleased later.
Um, but at this point in timeuh tariffs of china have gone up

(56:32):
and there has been what a90-day uh freeze, uh for
everyone else, uh to let ussettle, and negotiations I guess
uh happen with the trumpadministration and uh the the
you know, 75 nations that havereached out, or whatever that
may be.
So just some context around uhtariffs.
But yeah, I did see that uh,pharmaceuticals were uh uh

(56:57):
exempt from that.
I think it's pretty interesting.
Like there's a lot ofpharmaceuticals that are
manufactured, like there's a lotof pharmaceuticals that are
manufactured overseas.
In general, that to me seemslike a like a defense.
That's a defense issue ratherthan like a like an economic
issue.

Speaker 3 (57:16):
Right.
Yeah, no, I don't disagree withthat.
I think I don't know thenumbers off the top of my head.
We were just doing someresearch.
My team was on like whatpercentage do we get from
overseas and which countries arethey coming from?

(57:38):
And I think you know a fairamount comes from India.
And we were just in this worldwhere if it shows up in American
pharmacy, we we suspect it'ssafe and there's been a lot of
cases where that's not true.
Right Like right.
Especially we've had some gosh,at least in the last 10 years.
Right Like manufacturers comein pharmaceuticals coming from

(58:04):
China having issues.
Right.
So I do To your point.
I think it's more of a securityissue but there's such an
economic impact to it and I meanwe subsidize the rest of the
world.
That's just the point blankperiod facts, like we overpay
for pharmaceuticals and thatallows other countries to get

(58:25):
them for less.

Speaker 2 (58:28):
Which makes it a little interesting that they're
exempt from tariffs.

Speaker 3 (58:31):
Yeah, yeah, I was surprised.

Speaker 2 (58:34):
You would think that that would be something to
pursue other countries about,especially because the tariffs
is.
Tariff and trade deficit iswhat the administration is
focusing on, versus tariff andtrade deficit is what the
administration is focusing on.
You know, I think.
One thing, another thing justto highlight from a trends and
some things that came out fromour conversations that I found
fascinating.
You mentioned GLP-1s andthey're being approved for a lot

(58:58):
of different disease states.
But what's really interestingand actually our team did some
research on this too Um, like,it is approved to be used for
sleep apnea.
Um, and it's really, you know,it's so easy to see, like, like,
what they're doing, causeobviously you, you lose a lot of

(59:19):
weight on a GLP one.
So any condition that can beimproved with weight loss,
they're going for approval,plain and simple.
But what's interesting, whatour team found about that is it
still recommends, even if youtake the GLP-1 for C-Papnea, it
still says the clinical guidanceis to still use the C-Pap.

Speaker 3 (59:43):
So it's not replacing the CPAP in that expense.
Yeah, no.

Speaker 2 (59:50):
So that that goes back to active management around
GLP ones, because, like fullconfidence to say this, if you
are covering GLP ones like carteblanche for whatever it's
approved for, your health planwill go bankrupt.
Your employees will pay more.
That is a spiral to hell withthat type of a strategy.

(01:00:14):
So tough decisions that youhave to stay on top of and
manage.
And also something to know isthere was a biosimilar that came
out for Stelara speaking on therheumatoid arthritis front, but
is that necessarily a greatalternative at this point?

(01:00:37):
The biosimilar for Stelara?

Speaker 3 (01:00:41):
I mean, I think we can glean some things from
Humira, which was the biggestblockbuster drug of all time,
and biosimilars finally made itto market and it was kind of
like the market didn't reallyknow what to do with it.
Specifically, going back to therebate game, so we saw slow

(01:01:04):
adoption for two reasons One,not being placed on formularies
by PBMs fearing losing theirAbbVie rebates.
Two, being placed onformularies but not being
preferred or guiding patients tothe biosimilar.
And then three was provideradoption.
So providers have been usingHumira to treat and the patient

(01:01:27):
has responded.
Well, you know they're going tobe hesitant.
They're also influenced by drugreps.
So you know you take kind ofall those different components
and the Humira biosimilarconversions were slow.
I think they've gotten betteras we've had more options and
you've got pbms that I think arereally making the best net cost

(01:01:49):
decision.
Also, rebates skyrocketed tomaintain market share for humera
too.
So it kind of made the decisionhard.
It's like well, we do we givethem the upfront or do we get
the better net cost, time, value, money, all these different
things right.
So all that to say, I thinkStelara launch will be better.
I think the market's moreprepared for it and providers,

(01:02:13):
specialists, that really dealwith these conditions.
I think if they had successmoving a patient from a Humira
brand to biosimilar, they'regoing to be much more open to
the Stellara conversion thanthey might have been otherwise.
So I do think it'll have apositive impact.
The reality is, what we also seeis these things called rebate

(01:02:35):
credits.
So the house will usually win,or always win, if you're working
with the big three.
So even if they give you, ifsomeone fills the Stellar Bio
similar, it's substantially less.
Yes, you're going to lose therebate, but it should be dollar
for dollar.
And what we're findingoftentimes is it's not dollar

(01:02:56):
for dollar, like the house getsmore and the employer pay, like
it looks good because our topline went down.
But when everything settles outwith rebates, it's not the
lower net cost because they tooka little chunk.
So just something to keep aneye out on.
We could talk about that foranother hour probably.

Speaker 2 (01:03:16):
Wow, man, it's interesting talking about PBMs
and taking money from here tothere and the legalized theft
that comes along with pharmacybenefit managers and the
movement of money.
But we're thankful, trevor,that we have you on our team,
that we can call foul when afoul occurs.

(01:03:38):
But wanted to end ourconversation today with our two
questions that we ask all guests, and the first one is what is a
risk that you have taken thathas changed your life?

Speaker 3 (01:03:58):
I'd say the biggest risk I took is I had spent
almost a decade, right out ofcollege, with a third-party
administrator and I kind of youknow what do they say climbed
the corporate ladder and I wasat a point in my life that I was
completely burnt out in allphases emotionally, spiritually,

(01:04:21):
physically and I needed to makea change.
And I knew I needed to make achange and I knew I needed to
make a career change Like thatwould.
That was one of the primaryreasons for a lot of different
dynamics that were happeningthere and I took a leap Most
people don't know this.
I quit my job and leapt into astartup that wasn't even Granite

(01:04:48):
Peak, it was a corporatewellness startup.
And I remember coming home andtelling my wife like, hey, I
quit my job and I think I'llhave it through the end of the
month, and most people don'tquit their job without a plan B.
And I'm like I had a plan B.
It's in my head, I'm going todo this, I'm going to be a part
owner in this, and it's I.

(01:05:08):
Just I needed to do it Right.
It was like it was my.
It was my get out of jail freenot saying I was in jail, but it
sure felt like it, um, justwhere I was in my life.
So I took a pretty big riskthere and, um, it definitely
changed my life.
It changed my life for thebetter.
I learned a lot about businesswhen that fell through and I

(01:05:32):
needed.
You know, at that point I waslike, okay, now I need to figure
out a way to find a job becausethis didn't work out and it all
worked out.
You know, it's amazing, likeI'm right where I'm supposed to
be doing exactly what I'msupposed to be doing.
But it was sure hard in between.
Um, that startup wellness,corporate wellness company was

(01:05:58):
was the the catalyst to get memoving in a direction that I
probably needed to go, but itdidn't end go but it didn't end
up being right.
Yeah, it didn't end up beingwhat actually, you know what,
what I envisioned it being it,just, it just got me on the path
and, um, there's a little touchand go for a while and a lot of

(01:06:18):
prayer, a lot of you know.
Hey, honey, just trust me andme going.
I actually don't know what'sgoing to happen, but it all
worked out.
And that's where Mike Mitovichgrateful for him coming in and
being like you know, I was goingto become a broker.
This was before remote work,right.

(01:06:40):
So you're a guy in Montana who'sworked for a third party
administrator for a decade.
You've got a lot of experienceand like good, unique experience
.
But you can either go work forone of your two competitors
One's Blue Cross, the otherone's, owned by Cigna, Just felt
wrong, neither of them wereclose enough, so, again, remote
work wasn't there or you canwork with a broker, like become

(01:07:02):
a broker consultant, and sothose were kind of my three
options.
Until I give a lot of credit toMike Matovich going, don't take
any of those until I can puttogether an offer for you.
And had it not been for him,granite Peak would have never
been formed, so Wow.

Speaker 1 (01:07:20):
Our clients and our team is ever grateful you can go
home tonight and tell your wifethat Connor and his clients are
thankful that you made thatvery difficult decision.
It worked out.
It worked out.
Our second question is this Iswhat is left yet unfinished that
you have the resolve to finishor complete?

Speaker 3 (01:07:42):
Oh man, oh man.
I think what's reallyunresolved for me is just
feeling like there's so muchmore people to help and educate
and, candidly, just like givingpeople, giving people that come

(01:08:03):
to work for us an opportunity tokind of do something a little
bit different and learning frommy own burnout.
So I'd say, like what'sunresolved is like I always say
when we hire someone, like we doa lot of good work and we're
not perfect and we make mistakes, but we've got a lot more
people to help.
And also I want you to live alife that, like you never even

(01:08:25):
could imagine.
Like that's you're not going toburn out.
Like we're going to have busymonths, we're going to have busy
weeks, but we shouldn't haveyears that you're just like
grinding away until midnight,like that's not a life.
And so let's do really goodwork and crush it, but let's not
, um, let's not do what I didfor too long, which was kind of

(01:08:48):
sacrifice the important thingsin life with my family and
relationships that were muchmore important.

Speaker 1 (01:08:54):
So you're casting a John 10, 10 vision for your
teammates that they could livelife to the full.

Speaker 3 (01:09:02):
Yeah, yeah, I mean, I've never really thought of it
that way, but, um, I reallybelieve that I think we've we've
got a lot more people to help,whether that be people that join
our team or people that we workfor as clients, and so, um, I
feel like we're just gettingstarted.
I mean, we just hit the 90,000lives threshold.

(01:09:24):
So it's like, like, you know, alot of people out there yeah,
we're, we're not the biggest I Icouldn't say I imagined getting
there.
Um, when I started especiallywhen I started and went, is it,
can I do this?
Give a lot of credit to uh, youknow I practice what I preach,

(01:09:44):
you know.
Give a lot of credit to uh, youknow I practice what I preach.
You know we tell advisors, uh,you know, if it's not your core
competency, like, hire us, wecan make it a core competency.
Um, my core competency was notselling, so I hired Ryan Miller
as a sales coach.
Um, very recently, like tech,not my core competency hired a
fractional CTO back, not my corecompetency, hired a fractional

(01:10:09):
cto.
Like, I think those are thingsthat just being vulnerable and
knowing that we don't knoweverything is what will continue
to drive us and resolve to helpmore people, like you said.
Yeah, 90 000 it's a big number,obviously.
100 000 is like well, that'sawesome and we've been fortunate
to help that many people, butit's like it's only 100 hundred
thousand out of I don't knowwhat the commercially
self-funded world is.
The last numbers I've seen werepretty darn big and we've got a

(01:10:32):
lot of work to do.

Speaker 2 (01:10:34):
It's a lot of opportunity, trevor, thanks for,
uh, thanks for joining us today.
Um, love hearing your story andand uh, talking PBM and just uh
, it's cool to hear just evenwhat you just said there, like
fractional CTO and Ryan on thesales front.
So we talked about ofexcellence in the details, like

(01:10:58):
all the little things matter.
Um, so, thanks for joining us.
Thank you for to our listenersfor joining another episode of
Risk and Resolve.
We will catch you next time,thanks for having me.