Thank you, Mr. Chair. I have a few announcements. First, I wanted to let folks know that we have a couple of new reports on our website regarding hospitals. The first one is the FY 2019 year to date actuals report. This is the first quarter results of the hospital systems, which because for their fiscal year it starts in October, so that's October, November, and December of 2018. And that is, it is on our website or it will be within minutes. I'm looking at our folks out there who are putting that up. The second report that is under, listed under reports on our website is the report on financial health of Vermont's critical access hospitals. This is a report that we submitted to the governor last month regarding the financial health of Vermont's hospitals. So I just wanted to bring your attention to that. Scheduling, no meeting next Wednesday. So February 9th, February 13th, getting ahead of myself, no board meeting. To report out to the board into the public yesterday, we had a very productive data governance council meeting. We had two goals of the meeting. We reviewed updated policies and procedures for that group. And then we also had a presentation from Lynn Cohns, one of our lawyers on the updates to the data rule that we're working on. So it was a very productive meeting and made some great progress there. The last thing, certainly not the least, but many of you probably have heard that our general counsel, Judy Hankin, has been appointed to be the deputy commissioner of corrections. And so she will be leaving us next week. This is actually her last meeting. So I just wanted to formally thank Judy for being on my left side here for the last five years and helping me personally so much as I do my work and the entire Green Mountain Board.  Thank you. Thank you, Judy. Tom will be leaving the board because wherever I go, I'll just announce that now. I told her that I was very disappointed that the current commissioner's only done there since December. So I've got to wait a few years to follow it. From rep to boss to commissioner to board member. As long as you don't follow her in strikes. I don't know what side of the bars he'll be on. So with that, the next item is the minutes of Wednesday, January 30th. Is there a motion? Second. It's been moved and seconded to approve the minutes of Wednesday, January 30th without any additions, deletions, or corrections. Is there a discussion? No, not. I was a favor signify by saying aye. Aye. Those opposed. Nobody's on the phone, correct? No. Okay, then we're going to jump right into our regular business for the day. And the first discussion is pharmacy pricing and PVMs. And we're lucky to have with us today Brian Murphy from Blue Cross Blue Shield. Come down front. And whenever you feel comfortable, take it away. Can I announce one other thing regarding handouts? There are handouts to these presentations on the table up front. And if you're new, there is a sign-in sheet too. Good afternoon everyone. Can everybody hear me? Okay. Good evening. Congratulations on your position. So as you mentioned, my name is Brian Murphy. I'm the director of pharmacy and vendor management at Blue Cross Blue Shield of Vermont. I've been with Blue Cross for about 12 years. Prior to that, I worked for eight years with a pharmacy and vendor by the name of MedCo. And so I've basically been spending 20 years in this realm of either working for a PBM or buying services from a PBM and managing our Blue Cross Blue Shield project with PBM. So a pretty good understanding experience with what PBMs do, how they make their money and everything. And as I understand it, there's questions about PBMs. Because it's not really a clear part of the healthcare delivery model, right? And there are huge companies, but a lot of people don't have interactions with them. So there's kind of a mystery that surrounds them. I just thought I'd be able to hear, to answer everybody's questions and explain what they're trying to do. At the point I'm not advocating for any sort of current model. I'm just here more to try to explain and help people understand their role in it. Additionally, I also have slides on pharmacy pricing. Because a lot of that goes hand in hand with each other. That's how drugs from a PBM get pricing delivered through the cycle. Is that all that makes sense? Yes. And that's basically the agenda. What are pharmacy benefit managers, PBMs, as they're quickly referred to? How are prescription drugs priced? And then getting to... I'm sorry. And then, especially drug increases and generic drug increases. They soon have been in the media a lot lately. So I just thought I'd highlight some of the issues around those, too. Okay, what are pharmacy benefit managers? Since they're not really well known, I thought this slide was simplified. It's a rather complex system that winds up deliriously. And I just want to back up to explain why pharmacy is important. A lot of times, pharmacy benefit is forgotten in the overall healthcare model. It's only 18% of the overall cost. It is really important, though, for a reason being that when somebody goes to a doctor, about 85% of the time that a doctor identifies something, you know, person has a condition, a disease or some sort, the first line of treatment is medication. And while not everybody will have an inpatient stay over the course of a year, they may not seek help from a mental health provider, 75% of the people will fill up prescription at some point during the year. So while it's not the biggest cost, it is a heavily utilized benefit and it's a really key part of people getting better. And that's why it's really important. And often how people feel about their pharmacy benefit leads to how they feel about their insurer or the overall healthcare system. So, you know, I always like to make that point. Because a lot of times, you know, when you look at the dollars, it may not be as big as hospitals and things like that, but it really is an important part of the healthcare system. All right, so as I mentioned, it really all starts with the patient at the bottom. Right there, the patient goes to the doctor. As I mentioned, 85% of the time, if there's something wrong with them, they send it to the pharmacy to go ahead and pick up a prescription of some sort. That would be the pharmacy there. You know, and that's the part of the transaction that everybody is familiar with. Everyone knows that experience of going to the pharmacy, standing at the counter, pharmacist, intrusive computer, but there's really always a mystery of what happened from there. When the pharmacist does enter the information into the computer, what is really basically happening is the information is being transmitted between the pharmacy and what we were calling the pharmacy bathroom manager, the PBM. And the PBM really winds up being kind of an administrator of pharmacy claims. Because there are so many pharmacies in the country and there's so many medications, it would be really hard for every single health plan to go ahead and commiserate all that themselves. So you get economies of scale that go ahead and work in the pharmacy bathroom manager and all the pharmacists are being able to tap into their data clearing house. And so the pharmacy bathroom manager, after having received information from the health insurer, as to we always send them every single month, we send them a file saying, who's eligible for Blue Cross Blue Shield members? MVP does the same, Medicaid does the same. All that information is held at various pharmacy bathroom managers. They'll go ahead and trim it and say, yes, this is the person that is eligible with that insurance. They're currently an active member. Also, what is the co-pay that the person is paying? Or the amount on the deductible they have to go ahead and pay? As well as if they'll do a quick, what we call a clinical or concurrent drug utilization review. There's a quick check, like a drug-drug interaction. The other drugs the person has taken, this new drug cause any sort of interaction and so forth. They'll send them back and alert like that. And also the drug requires a prior authorization. If there's any sort of issue where someone has to call in to get that authorization. All that information goes back and forth between the PBM and the pharmacy within seconds. So now the pharmacy knows what the co-pay is. They'll collect the co-pay from the patient and then they'll submit that claim to the pharmacy bathroom manager for reimbursement. Now this happens 1.3 million times a year for Blue Cross Blue Shield members. It'll happen even more for other plans. So it's very high volume of what winds up occurring. Our members discuss 60,000 pharmacies across the country. Our members will use about 8,000 of them over the course of the year. So it's a really wide, broad network that the pharmacy benefit manager are contracting with to allow people to get easy access to their medications. Then what happens is the pharmacy benefit manager, at the end of every week, they collect all those claims that occurred for Blue Cross Blue Shield members and they send a bill to us. So we get an invoice from them for the amount of the drugs that we've contracted to go ahead and pay them. You know, there's a different pricing for generic drugs, different pricing for brand drugs, different pricing for what we call specialty drugs. And they consolidate all that, they send us one invoice, we'll go ahead and pay them. And then we go around and we are contracted with employers such as the teachers union, the university of Vermont, the auto dealers and so forth. Those are our clients. We'll then go ahead and take all the claims that the PBM sends over to us. We'll consolidate them into various bills and we send through that employer. So the person who the patient is getting an increase from or getting the insurance from would go ahead and their employer would go ahead and pay those claims. Unless it's one where somebody's worth an exchange or they have, you know, it's fully insured, then at that point they're just being billed for the premium and we're just paying the claims at Blue Cross Blue Shield. Does that part make sense so far? Okay. So then at the end of every week as well, they'll go ahead and reimburse the pharmacies. So the money ones are going from Blue Cross Blue Shield to the PBM to the pharmacy. And that's how the pharmacies want it being reimbursed. So they get part of the money from the member in terms of the COPEG and the rest of the reimbursement comes from the PBM. Okay. Now, the other part of it that you often hear people talk about are rebates, right? And this is another role that the pharmacy benefit manager works on. What rebates are? Rebates are payment from the manufacturer. The manufacturer is a key part of this whole model. Obviously they produce the medications, they develop the new medications. They want some to the wholesaler and this wholesaler wants to sell them to the pharmacy. So that part we on the insurance side don't really interact with at all. But that's a key part of the delivery of the medications system. So, but the manufacturers, they're often going about manufacturing and marketing the medications. And a lot of the medications within certain drug classes will be very similar to what we call Me Too drugs. Where one manufacturer comes out with a new drug and they find they have a $3 billion market. Another manufacturer can say, well, if I came out with a very similar drug, I could go ahead and grab some market share in there. And be able to make some money so I'll come out with a drug. And then another manufacturer can say, and you could wind up with a drug class that has a lot of very similar medications, very similar clinical outcomes and so forth, and at various prices. And the patient here doesn't really have a sense of what those different prices are, right? And they're really going to be impacted a lot by the direct consumer advertising to see on TV and so forth. And so what we do is, as an insurer, we create what's called a formula. We'll go ahead and say within this drug class there's five different drugs. We look at the clinical outcomes. We have a pharmacy and therapy use committee review the drugs to say, yeah, we read that all these drugs, the clinical outcomes are very similar. We're indifferent to which ones you guys prefer. And we'll go ahead and look at what's the cost of the drug, right? And so when we're looking at the cost of the drug, we look at the, not that it'll be reversed for, you know, to the pharmacy, as well as a rebate that the manufacturer would be willing to pay. So if a manufacturer is willing to lower the cost of the drug to insurer by paying a rebate, then we're willing to go ahead and take a look at those five drugs that we're all clinically indifferent to and say, we'll go ahead and put this medication on the coronary, give it a preferred status, call it referred drug list, if you will. And that rebate will come back to us through the PBM. Does that part make sense? This is a key part of what the pharmacy management managers do. So at the end of every quarter, they go ahead and collect all the prescriptions for Blue Cross Blue Shield and they'll submit it to the manufacturers to go ahead and collect on those rebates. So we've decided out of those five drugs, four of them are going to be on the formula and one's not going to be on the formula. And there's rebates to be paid on those four drugs. Those rebates will be collected by the PBM on our behalf from the manufacturer. They then turn around and they send them to us. So we get them 180 days after the end of a quarter. So prescription being filled today, the quarter will end on March 31st. We want to receive that rebate at the end of September. So it's a really delayed transaction by the time we want to get it. This is the thing that you may have heard in the news. They were going to talk about trying to move this all the way up to the point of sale. So that may want to happen. They're trying to talk about doing that legislatively. We used to offer that Blue Cross Blue Shield. We used to offer clients the opportunity to have it at the point of sale. And it wasn't popular in the marketplace. So we moved it away from it. We could always go back to it. It's not that big of a difference to us. But it wasn't popular in the marketplace because when we go to sit down with a consultant or a broker and try to explain what our pharmacy pricing is, they would try to compare us to other insurers and PDAMs who are making bids for that employer's business. And they would get the discounts on the branch, the discount on the generic, and then the amount of the guaranteed rebate. And we were having zeros in there for the guaranteed rebate.  Well, it is. It's in there at the price of sale.  If I can't see it, I don't know. It's really there. And so we were losing a lot of business for this. So we stopped offering that. But we could always go back to that model. Brian, would you prefer that we ask questions during the presentation? Sure. Absolutely. You're welcome to stop anytime. Okay. So, familiar with the concept of rebates, although it's a totally different world in the previous life, I own movie theaters. And Coca-Cola would say they have the same price, regardless of who the customer was. But then we would get two forms of rebates. One was an advertising allowance and one was a marketing allowance that were basically determined based on the volume. And so my first question is, are there times when the rebates back to the TBM would exceed the cost to Blue Cross Blue Shield because of the consumer's out-of-pocket payment? Cost to exceed the cost to us? Such that. So let's say I go to the pharmacy. Right. Okay. My co-pay is $20, okay? And the drug is a $40 drug. Is there a situation where the PBM would get more back in rebate than the $20 that Blue Cross is paying for them? So, yes, but not necessarily the co-pay. The situation you're thinking of is within deductible. So the person has to say like a $2,000 deductible is a $500 drug and there's a $100 rebate. The member could want to pay $500, but the cost of drugs is $500, right? Yep. They pay that $500 and there could still be a rebate that would come back, that would go back to Blue Cross. And I was just saying, and then we want to funnel it back to the employer. So that is correct. That situation could occur. So you're convinced that you're getting it back to the employer? Yeah, so what we do is, so here's one of the things that the PBM has different ways that they can make money. We'll just jump to that slide. Right. One of the ways that they can make money is on rebates. Okay. So when I was talking about all of the rebates that they collect from the manufacturers, when we contract with the farms, one of the things that's in the contract is what percentage of the rebates that they collect that they can keep. Okay. We go ahead and say, every three years we do an RFP for these PBM services, right? And one of the things that we say in an RFP is that if you're going to bid on our business, one of the minimum requirements in our contracts, you have to give us 100% of every single revenue that comes from the manufacturer to the pharmacy benefit, okay? Then we turn around and we do that to the employer. And the reason why that's important to us is because a generic drug is always cheaper than a brand drug, even if the brand drug has a rebate. Okay. And so I always want to encourage the use of generic drugs. That's the best way to try and control pharmacy costs. If I'm giving the pharmacy benefit manager an incentive where they're keeping, like, say, 10% of the rebates and they're making money on the rebates. And the rebates are only paid on brand drugs. Now I'm giving them a financial incentive to go ahead and encourage the use of brand drugs when I'm better off than the people taking the generic drug. Right? So we make it such that, to the point, like I said, we require 100% of the rebates and any other revenue streams from the manufacturer. There could be administrative costs that the manufacturer is paying to, 100% of that too. And then we require complete audit rights of the PBM. So we can go in and read every single contract that they have with the manufacturer. Is that true of your competitors, too? I can't speak to them. I don't know if Susan would be able to speak to them. Mike, yes. So insurance companies, this is what we do all day. Like I said, I got 20 years of dealing with this. So this is what... When you spend that much time doing it, you kind of have to know who you're buying from inside and out, and you really have to be sophisticated in buying that. You wouldn't wind up in my position or your crew in position without being somewhat knowledgeable in what you need to have out of contract. So I suspect that they do. But it probably gets a little different when you're a direct... If you're an employer down here, some employers would go ahead and contract directly with the PBM and rather than through an insurer. And in those situations, there's a chance that someone doesn't have the experience of buying from a PBM and they may allow the PBM to make money on rebates, which I would discourage anyone from doing that. They also may not ask for full audit rights. And that would be someone who would definitely discourage somebody from... or would encourage them to always have full audit rights. You really want to be able to go in there, go through all the contracts, go through every single claim, really identify what the money was being generated and make sure that they're adhering to the contract. And if you're not able to get those audit rights, be worried that something would be up. So when you have that transaction between the PBM and the pharmacy, as somebody that's worked in the industry for all these years on both sides of it, do you have concerns when you have things like CVS Caremark and alliances like that? Where CVS Caremark owns their own or CVS owns their own PBM? Yeah, it's not as much a concern as I am. It's another model that I have to be aware of. So if you contract with CVS, and we do contract with CVS for Medicare, our Medicare Part D lives go through CVS, our commercial lives go through Express Grows. So in that case, you have to know that part of their model of having a PBM is that they want to encourage use of their retail stores. The retail pharmacies just want to make more margin than the PBM business. So they want to try and encourage use of that. And you have to make a determination is that really in your own best interest? And so it's something that you have to be aware of and then make sure you have any sort of contractual protections that you need through that process. So for me personally, I have more concern with the consolidation insurer insurers buying PBMs, which is leaving, it comes like Blue Cross would show them off without its own PBM having to contract with another competitor insurer, buying Express Scripts. I now have to contract with SIGNA to have services from Express Scripts. So my competitors now also my partner. It's kind of weird, right? Has anybody ever explored like the Sherman Antitrust Laws and things like that when it comes to those acquisitions? So those things will, they've gone through the FTC or the judiciary and Department of Justice. So they've been reviewed in Washington and they've been allowed to go through. And this gets into like a federal level, discussion as opposed to a local level. And if you look at the top three PBMs, they probably have about two-thirds of the market at this point, between CBS Express Scripts and Optum, which is part of Unite Health. If you look at those three, SIGNA owns Express Scripts, CBS owns Aetna, or it's about to be owned by Aetna and Optum is owned by Unite Health Group. So if you want to be with one big three to get the most negotiating part, you have to basically, as an insurer, contract with another insurer. And that's more what I have a little near problem with. But if you're in this industry alone, you see these things kind of go a second. Back in the 90s, manufacturers were buying the PBM. So the manufacturers saying, oh, why put the PBM? Then I could go ahead and rather than paying a rebate on it, I could go ahead and have control over the formula that the PBM is putting out there, right? And so they were trying that model in the 90s. And then that lasted for about a decade. And then we ended in 90s. You go back and look at it and see that you started spinning them all off. The shareholders started saying, you know what, we think that there's value to an independent PBM, that we're not really getting that value as a consolidated pharmaceutical manufacturer and PBM. So I wouldn't be surprised if we'll go through a period of about 10 years, and else you'll see all these insurers start spinning off the PBMs with this shareholder scale.  So on that same line of questioning on the PBM, did you take a look at the proposal that came from some of the retail drugists in the state that basically said, we're not seeing full transparency in the PBMs. What if the state did a program similar to what they do with liquor control, where they had their own PBM, basically a purchaser or a distributor, whatever you want to call it, and that way there would be complete transparency and they would cut out the profits from the middleman. If you turn on mad money at night, you see Jim Kramer talking about the profits of PBM and why it's a good idea to buy the stock. So obviously there's money that's being taken out of the system that doesn't stay in the system. So did you give that proposal any review? Yeah. So I met with, it came from Jeff Hawker from Brother Farm. So I met with Jeff and also the gentleman from, I think it was H.D. Smith or D.H. Smith. They're the wholesaler that Jeff was talking about, this plan with their original wholesaler, I think out of me. So I sat down and met with them and we went through the model and when we went through it, the model they presented, we still would have to contact with a PBM. So we still have a PBM that would still be a processor to clean, right? And when we went through it, I asked the gentleman, I think it was H.D. Smith.  He goes, no, we're going to make the same money. And I asked, you know, Jeff wanted to be paid a fixed fee, rather than making a spread out. I said, Jeff, are you going to make less money? And he goes, no. I said, and I guarantee you the PBM, I sell the contract with them. They're still going to want to make the same margin. So I'm not sure where the savings are coming from. Granted, we get more transparency, right? But if there's no difference in the actual money, right? What do we really gain? So here's the point I would make with transparency is that when we go ahead and we contract, let me go back to this, going back to how they make money. They make, honestly, if I had to make money, they make money in one of two ways, the top two ways with regards to processing plans. One is called traditional spread pricing and one is called pass-through pricing. And the traditional spread pricing means when they go ahead and they reimburse the pharmacy, they're reimbursing them at a lower rate than what they're charging us, right? So it is a $100 drug or the list price is, say, $100 and they are in contact with us for a 17% discount and they contract with the pharmacy and the 18% discount, they keep that 1% differential, right? That margin in between. And that's how they make their money with the discount spread, right? With a pass-through, whatever they're reimbursing the pharmacy for, that's exactly what they charge, Blue Cross Blue Shield or whoever it would be, right? But you then pay an administrative fee for each link. It might be like $1.40 or something along those lines, right? So when we go ahead and do our RFP, that's in a bit of both ways. I say, you know, give me your best pricing with regards to a spread arrangement versus the best pricing through a pass-through arrangement. And then we'll go ahead and do the analysis to see which one's lower cost for our range because at the end of the day, the thing I care the most about, I'm agnostic as to how they make their money, but what I really care about is getting the lowest cost for our clients, for the employers. I want to lower the cost of medicine as much as possible. So we'll go ahead and do the analysis and get the spread pricing and yields a lower price. I'm going to go ahead and do it. I can't go back to the employers. I can't go to UVM and say, look, I got you this great deal on pass-through pricing. It's really transparent, but it's going to cost you $3 million more. Right? Well, that's great, but I'm going to have to cut some UVM staff because I got that transparency. Right? If I can get transparency, and it's the lowest cost, that's great. It's a nice extra to have. But the number one priority for me is to keep that cost as low as possible. So if the model that they're offering that gives me the lowest price is a discount spread, I'll go ahead and choose that one. Right? And the same thing, my same point is to, when I met with Jeff and the wholesaler, was when I go and do my next RFP, I'd welcome them to go ahead and make a bid. And if the model that they're offering is a lower price than what I'm getting from Express Gryffs or CBS or anybody, I'll gladly sign up for it. Now, I'm not sold on any sort of model. I don't do whatever it takes to lower the cost. I just don't want to have to be locked into only one model and then there's some other option out there that I don't have access to. And I can't get that lower price. Right? So that's, the feeling is the transparency. You know, it isn't nice to have, but it's not ultimately the end, the number one interest for our clients to get that cost as low as possible. So the one other question I had that you already talked about, you talked about formularies and prior OS, and I was just curious, what percentage of prior OS for prescriptions only get denied? I have to go back and look at the last day, but somewhere around the 10 to 12% range. Yeah. So there's not that many scripts that wind up requiring prior authorizations. So I think we're really, like I said, we do about 1.3 million scripts. I think we had about 8,000 prior OS. So just to give you a sense of our magnitude, and of that 8,000, you know, you're talking about the number ones that are denied, about 10, maybe 10 to 15% somewhere in that range is what's being denied from the prior authorization. So in the scope of everything, it's a small percentage of that 1.3 million script. So in a previous board meeting a few months ago, there was a discussion about the possibility of a gold card program. Yeah. It does, but prescriptions follow the same trends in that some doctors are never denied or not. So there are some doctors that are denied less often, and we are looking into gold card programs. Okay. We've been having meetings around different programs. The thing you often hear about the most noise about prior authorizations from primary care positions. Right, the administrative burden to them. But when we look at the data, they have a much higher denial rate than specialists. Specialists are the ones who would most likely want to be in a gold card program. Right? So they'd be kind of in the same situation where primary care positions, being a generalist, you have to know about so many different drugs. A specialist may have one class, maybe two classes of drugs that they have to keep track of everything, and they're going to know those drugs inside and out. Which would be much harder to be a generalist, and that's where you wind up having a higher denial rate. Because they're just not as familiar with all of the different changing indications on medications, you know, to the size of amounts. It's harder in their situation. I think that is part of it. Well, that's why we were wondering at that meeting if it wouldn't be an incentive, if you had the gold card program for providers to step up their game to try to make sure that they're not ever in the situation that they would be denied, and who will be able to achieve that gold card status. And that's a possibility, and we're looking at it. I'm going to agree that I would like to find a way to reduce the amount of sugar. You know, one of the things that we did, we were taking a look at, we took a look at it, and I said, what happens on those renewals? What's the potential? And the counter is only like 3% on renewals of a prior authorization. So we said, what would happen if, on a year prior authorization, we went out to 3 or prior authorizations, right? And we'd actually want to save money because of the cost of having to do fewer reviews. Plus, the fact of the matter is that you're now going that, you know, when the doctor starts someone on therapy, they do the prior authorization, then they're skipping the year 1 anniversary to the year 2 anniversary, and you're just having that year 3, right? So you're now going from 4 authorizations over that time period to 2. So we're going to have a 50% reduction in the utilization of that, right? And, you know, those kind of things are what I think we should all be working for and trying to find. And if Goldberg is part of it, we're willing to go there. I don't want to get rid of prior authorizations all together because, just on pharmacy loan, we save about $17 million a year on prior authorizations, right? For this 8,000, can you take the 8,000? Does that net out, though, headsets with people that are making calls trying to get the authorizations and things like that? When I look at primary care physicians, the primary care physician who has the heaviest volume in the state for requested prior authorizations from Blue Cross Blue Shield is one per week. I don't think they're hiring somebody for pharmacy prior authorizations to get a one to us per week, right? If there's a huge burden on pharmacy from Blue Cross Blue Shield, I'd really like to sit down because when I look at the data, there's not that huge a burden. But if I look at an average, I'd say over all the thousands of providers, I've got 8,000 per year, and I'd say that it takes 15 minutes to get a prior authorization. And then I'd say that's 2,000 hours and say somebody's times worth $100 an hour, you're talking about $200,000, right? I'm sure my math is working my head, but somewhere around $2,000 in terms of cost, it gives time to do that. That is yielding $17 million in savings, right? If there was some other healthcare reform idea where we could get that kind of ROI, we would sign up for it immediately, right? Let's not do away with a home run of a cost savings opportunity because of burden. Let's work to try and reduce that burden and have a whole lot of resell assistance. Right? So, you know, I'd be happy to come back and go deeper into prior authorization to kind of go through the process and so forth, but this meant general feelings that let's work towards reducing the burden without getting rid of entirely. Gold parting would certainly be part of it. You know, there's some other things around technology-wise, that having the prior authorization built more into the electronic medical records of the doctor so immediately on screen they see what the cost of the medication is and the opportunity to do the prior authorization review right then and there. Those things could reduce the burden without having to do away with the savings option. Other than the formulary, does Blue Cross do any counter detailing with docs so that they're getting better information as to what the best cost alternatives are? Yeah, we do. This will be before that kind of detail. We have a pharmacist. Her name's Carrie LaConch, lives in Monkton and her job's solely to travel from the state visiting the doctors to go ahead and inform them of you know, new generic drugs coming on the market, answer our changes to our clinical programs, answer their questions like, if we go ahead and have a change in the formulary or a change in the prior authorization that's going to impact some members, we'll give Carrie the list of the patients and their prescribers and so she can go out there and say, you know, doctor, here's the list of patients that are going to be impacted, here's what these suggested therapeutic alternatives are, do you have any clinical questions about it and so forth, so she goes out and does that to try and you know, really start out with just trying to push back against the direct consumer and direct to physician advertising as well. But it's really more than just a general resource for doctors to be able to tap into. They'd rather talk to a clinician like Carrie than they would here in terms of bureaucrats in the cell. So it's worked out well. Great. I have a question around the audit. So when you in your contract negotiate the full audit rate, do we do that regardless of what kind of financial arrangement, right? Correct. So regardless of whether it's a discount forever for past years, can you talk a little bit about like how often you might exercise your audit rates and how that works? So we pharmacy benefit contracts are typically three years in length and every three years doing our thing. I always see it as like spring house cleaning at the end of that contract, that's when I do my audits. So I'll go back and audit that contract. It's expensive for me to hire somebody to go out and do that audit. Quite often it'll want to pay for itself because we do $107 million a year times three you're over $500 million and it costs me $100,000 to do that and if they find 1% off, it's usually a fraction of that. It's usually like $300,000 to $400,000 off this fraction of a fraction of a percent. But it pays for itself but it's still a lot of money to do and I don't want to have to spend it every single year. So I tend to do it once every three years. With the exception of, if something does go out of the bluey a couple years ago when ExpressGrips was in Mexico they transitioned all the ExpressGrips claims over on Mexico's claims platform and the transition didn't go as they wished and there was a bunch of noise and problems with the setup and everything and I chose at the end of that bet last from like beginning in June to the end of October and of course I haven't audit done specifically for that time period because I was really concerned about what happened during that transition so that would be an exception where if there's something that just really goes sideways I want to have that period isolated and examined with everyone to freshen my mind as to what would the transitions occur. Alright well, let's finish off the last way that PBS make money some loop. The idea there is that I was talking about the timing of the payments so they send an invoice to us we go ahead and pay them and then they pay the pharmacy, right? If they sit on that money between you seeing it from us and paying the pharmacies they can make money on that and you don't think collecting interest is really valuable but ExpressGrips will do $100 billion a year and you sit on $100 billion for one week the interest on that is a lot of money now, Vermont though has taken steps to cut back it used to be that they would pay pharmacies like once a month, right? and it was really a cash flow issue for pharmacies and it used to be that we would pay them every two weeks now they you guys passed the legislature passed some prompt pay laws that say that the pharmacy bank manager hasn't made a pharmacy every single week so that helps with the cash flow there and we change it just independently with the invoice comes all the claims file and we can update the health savings account vendors that we work with to let them know that people have had these claims more frequently so it's just for that little wonky reason we switch one week but also there's no more flow being made for Blue Cross the Shield for Vermont members but it's quite possible for other people if they're paying the PBM and then PBM is sitting on that money before they pay and other states they can make money on the flow there as well so those tend to be the ways they make money on it alright why do we bother contracting the PBM? as I mentioned earlier there's an economies of scale aspect of it there's 16,000 pharmacies there's dozens and dozens of manufacturers there's complex contracts I don't have the resources our entire pharmacy department is myself and a pharmacist who works for me I'm not a pharmacist I've done a great job managing the clinical aspect of our benefit but we wouldn't have the wherewithal the manpower to be able to do that and it would be silly for every single insurer to employ an entire army of people who go on and do all the contracts so also investing in the all of the infrastructure needed to go ahead and do the claim processing for all that it would be worth so it makes for economies of scale but the other aspect of it is negotiating so Blue Cross, Blue Shield, Vermont we are a large insurer in the state of Vermont but Vermont's a small state we're 600,000 people in other places where they would call us a county but when you go nationwide Express Scripts we have 1.3 million claims about 170 million dollars of drug spend Express Scripts they have 1.4 billion claims and 100 billion dollars of drugs when they show up to negotiate with Wegmans with Walgreens or Black So Smith Klein Merck or something like that they're bringing so much more heft to those negotiations than we would ever they're able to get better pricing on our behalf than we would have otherwise the same thing with Kermarki, look at their volume they're getting larger and larger on pop them they have all United Health groups buying plus they're out there now selling their services separately they have a large volume as well so those are reasons why you want to contract the kinds of scale on the volume that they bring what services they provide we've been talking a lot about the claims processing but they do do other services as well the patient safety of this as I mentioned the drug drug interactions they check as the claims come through formulating management we have two formulators we offer our clients one is an Express Scripts formulating so different clients want different things so we have to be able to offer a variety once again for the two of us we can manage multiple formulators we can manage one we have local input from local doctors but there are some clients that don't really care about that local input they just want a different kind of formulating and that's what we use Express Scripts formulating management for nationwide pharmacy contracting manufacturer rebate contracting e-prescribing hub for months actually do pretty well the vast majority of scripts these days are coming electronically and PBMs are a part of that mail order pharmacy we haven't talked about that at all in addition to being a pharmacy they're also a pharmacy they're some of the largest pharmacies in the entire country because they do this mail order in a volume Blue Cross Blue Shield Vermont doesn't encourage the use we don't discourage it we make it available to the members but we only have about 5% of our scripts that go through mail order it's there for a convenient factor people in rural areas may not have easy time getting to a pharmacy people up in Grand Isle I think they only have one pharmacy left up in that area so mail order works better for them especially drug pharmacies especially drugs are high costs, high touch medications often injectables treating rare conditions very expensive medications pharmacy requires special handling some extra care that's given to the people I have with me they provide a social pharmacy that the members can use customer service we have customer service here at Blue Cross but they also have customer service at the out of St. Mary's Georgia for express service they're open 24-7 365 those are broader hours than we keep so they're able to go ahead and order a service for a pharmacy prior to pools we've talked about academic detailing the counter detailing we were talking about they offer that data integration they take our medical claims as well and they feed that into the claims processing part of it account management they have a team of people that help manage our account market bomb they help us with our sales our RFPs that we do for the people who are buying on services from us Broadway's abuse programs as well as on just general data analytics and trend analysis they help us provide us with value a couple questions on the nationwide pharmacy network contract do each one of the major PBMs have their own network or is it like when you're booking a hotel you may have booked it through hotwire but there isn't a kayak platform so they all have multiple different networks so they all have what would be referred to as a broad nationwide network so all the PBMs will contract with just a unless it's a weird small compound it just doesn't want to deal with insurance but that's going to be a rare exception the vast majority of 60,000 pharmacists across the country are going to contract with every PBM so they all have their broad network everything is the same and then you get into the other options again you can have a more restricted network where you can say you don't want to have this chain including network for a long time Blue Cross with Shield didn't have Walgreens as that the reason being is that there was only three Walgreens in Vermont we had very small volume on them by removing Walgreens from the network the other network the other pharmacies are willing to give deeper discounts so by going ahead and removing a large national player with a small impact on our population we were able to get better pricing for our members so we had them removed until they bought a whole bunch of red aids in Vermont recently they bought 31 red aids or something like that and there's no way I could have a network there's 140 pharmacies in Vermont so I can't have a network but I'll 31 of them so we included Walgreens back in last September so now we have that back but you can go ahead and get those restricted networks and then there's also like CBS does things as you mentioned earlier about steering people they'll go ahead and offer incentive that steers people for CBS they'll talk to people about having a tiered co-pay so that people have lower co-pay if they use a CBS and so forth because they won't get in the door so that you're buying all the things that are not, you know, beyond medication you'll buy your KitKats, bloodline linemen you know, photoprocessing and the goodly coupons keep coming back yeah, exactly, I mean that's their model and you know that's one of the tough things for the local entrepreneurs to try to be with because if you go into a local entrepreneur it doesn't look like a small grocery store which if you go into a CBS or Walgreens, it looks like a small grocery store and that's really where they want to get that foot traffic through the door so they want people going use the pharmacy in the back of the store and while they're passing by some more shampoo and things like that and that's where they make their larger margins so if you don't have a cell in the front it's harder to repeat with those changes that's why you see a lot of the independent pharmacies that change as they farfetch get older and retire so we sell them out later which Harvard sold to Kinney's so on that same slide the mail order of pharmacy what are the blue cross rules I know I've had a lot of complaints over the years from people who it's cheaper for them to get a 90 day supply through the mail order because they're out of pocket is reduced and yet they only need it for say 28 days but it's still cheaper for them do you take any steps so that you're not in that scenario where somebody is getting 90 days of a product that they only need 28 days of so that I think maybe we mistake that so the point that the traditional idea of a mail order incentive is that you allow them to pay for 30 days so you can go to a local pharmacy get 90 days of supply and you're going to pay 3 copays so your copay is $20 per month but not if you get it through the mail but if you get it through the mail you're going to pay 2 copays so that's the incentive often is that you're going to save by not having to pay 3 copays you're going to pay 2 copays but if someone is getting a 28 day supply at local pharmacy you're going to pay 1 copay and if you go to the mail order you're not going to pay less than 1 copay you're still going to pay at least 2 copays the only time it would be cheaper is if a person is a deductible where they are getting a 28 day supply at both places and the discounts are deeper there's larger discounts at the mail order pharmacy it would be cheaper for a person out there but that's only if you're getting 28 to 28 days there's no way that the discounts aren't so much better that 90 day supply would be less expensive than a 28 day supply so I would need a specific situation but the next time we get a big mail I'll send you that I'm always happy to dig into these the other thing though is that what has really happened is that it used to be a much larger gap between the discounts at a retail pharmacy and a mail order pharmacy and that's when a lot of those incentives were put in place to go ahead and incentive people to use mail order if you look at discounts these days it's not as large as it is there is still a difference but it's not as large in order to actually break even on incentive people to go to mail order you have to have them pay 2.7 copays at mail order and nobody wants to plan design instead of oh you're going to pay 2.7 copays it's more like no one can really follow it so really what it wants to have these days is most people like our entire exchange population and a lot of groups they've just gone to say if you want to use mail order you're going to pay 3 copays there if you're going to go to a retail pharmacy either way it's the exact same you're not going to have any financial savings it's just a convenience factor for using mail order at that point I would say about the complaints of that retail pharmacists will say that they're being squeezed all the time by the push for mail order and that it's taking some quality away from the patient care because in the old days when they came up the pharmacist knew everything that they were getting and they could console them against counterindicative medicines and things like that those days are seem to be waning so what do you say to that argument? I can send over data that shows that as far back I can pull data back to 2001 out of our database and it is varied between 4% and 5% of our claims that time we're not seeing that increase in mail order that I think other states may have seen that but we're not doing that here and I don't think our competitors are with regards to mail order and the issue for independent pharmacists is really the losing out of their chains if I add this one graph back in my office that shows a market share broken out between chain pharmacies mail order and independent pharmacies and when I started Blue Cross decade plus ago the independence were around 30% and that slipped down to almost 20% and mail orders have been about the same and the difference has been chains have grown chains have a different goal for making money than independence we're going to a chain like I said they're selling all these other things other pharmacies and that's where they can make their money so they're willing to go ahead and basically break even on the pharmacy in the back of the store just to get the foot traffic through to go ahead and make that money and they still have to match those prices to be in a network and that becomes really hard for them so the economics of pharmacy has shifted on them and it's not easy for those independence to go ahead and invest in a large of a space and all that inventory to go ahead and have all that for different independent stores so that's really what has been happening with the independence and they're losing out to the chains rather than mail orders because they have a foreign market share except in that just recently we have started going back to when I was talking about specialty drugs we are now for our exchange population we're requiring then to use a specialty pharmacy and so that is a change where we are moving people over to a specialty pharmacy for that the largest area that we're seeing cost increases is on specialty drugs and the trend is so far beyond anything else in healthcare we're trying to find any sort of possible solution to try to control that cost and the discounts as specialty pharmacies are much greater now one of the things that we've been doing is local pharmacies are allowed to go ahead and participate in that network they can be classified as a specialty pharmacy and be part of that exclusive specialty pharmacy network University of Oregon Medical Center Dartmouth Hitchcock Medical Center and some other local pharmacies I've been working with the specialty pharmacies to go ahead and be part of that as well so that is somewhere, someone wants to make a point that we are trying to drive specialty pharmacy use to certain stores we're starting to do that as a way to try to control the cost on the specialty drugs but in terms of mail orders that's not that much that's where else the news started okay thank you okay real quick about the pharmacy martins if you look at the supply chain going from the manufacturers the pharmacies themselves the pharmacy benefit managers and just pull the 2008 SEC filing speech for them and take a look at where money is being made you know Express Scripts is obviously our PBM they have a player in the state they have an 8.5% margin before overhead, after overhead they're looking at about 3.3 Walgreens the largest pharmacy chain in the state now they have gross margin at 23.4% they have a lot of overhead with all the store locations they each have a lot of their costs, their margins so they get down to around 3.8% margin as well typically for businesses in the United States if you look at expected net income margin those are actually on the lower side which gives us a sense that there's a lot of competitive pressure against them to go ahead and they're not making money hand over fist if you take a look at Amgen manufacturer specialty drugs we're having these very high cost trends on their gross margin for it is 63.9% after all their overhead all their R&D expenses all their marketing expenses they're still making 30.7% and this isn't just an aberration of those ones it's really consistent throughout the market that pharmaceutical manufacturers is where the need is if you're talking about high cost of drugs that's where most of the money is being made I understand people are getting confused about what does that PBMs do it's kind of like a weird business area but when I look at where money could be saved it's really the manufacturers that have the most control and are holding the largest part of the market most of the profits in this market any questions about that alright alright so how how are we doing on time about half an hour is that right we're so fascinated we're just going to let you keep going stop me at any point alright now the question though is how are two different drugs priced in different drugs in pricing but first the levels what are the different categories of drugs so I'm going to clarify brand drugs, generic drugs, and structured drugs those are really the three I'm going to often think about brand drugs are drugs that have been brought to the market but they still have a patent protection you know a patent will often be around 17 years it may take 10 years from the time that they filed the patents and the time they actually reached the market there's a lot of money that's spent into research and development, clinical trials and so forth now these are about 7 years when it's in the market they have patent protection and so forth and that's the time that represents about 12% of prescriptions is about 30% of overall cost generic drugs are the ones that are most commonly used these are drugs where the drug has reached that point and the patent has expired multiple manufacturers can now come into the market we have a really good competitive generic drug market in the United States generic drugs are often cheaper or regularly cheaper in the United States than they are in Canada Canada has cheaper brand drugs we have cheaper generic drugs and so that represents about 86% it's kind of growing except the almost like 87% of all prescriptions but it's only about 20% of cost because those are the lowest cost drugs like I said it's really competitive and these are the ones that you often look at like Walmart talked about their $4 generic drugs deal that was a really great piece of marketing because in fact there's a lot of generic drugs that are all great and they're just patching them all together for $4 lastly special drugs this is a subset of brand drugs as I mentioned these are often drugs that require extra special care handling that can be temperature sensitivity to them they often require self-injections with them and everything they treat rare conditions or uncommon conditions often and these are the ones that are except the 50% of cost to when I started Blue Cross in 2007 they were about 8% of cost and now it's growing to about 50% and it's still only 2% of prescriptions so it's very small percentage of the number of people that actually ever fill a special drug this would be treating like multiple sclerosis, rheumatoid arthritis hepatitis C things along those lines, cancer medications but it's 50% of the cost so this is really where a lot of our folks have been trying to control costs lately any questions about the differentials there alright so when we look at our price in our contract with pharmacy benefit managers this is what we see as an insurer there's the average wholesale price which is the list of prices in the medication then we'll go ahead and negotiate a discount for what that off of the AWP AWP is a price that is set by a company called MediSpan which is owned by a massive company called Ulterscluwer and they are the only one out there that sets AWP and it wants to become an industry standard there's a couple others, there's a thing called Whey Full Sail Acquisition Cost WAC there's also ASP average sales price for DLM PBMs the standard is used at average wholesale price so we might negotiate something like a 16% discount that goes down to what we call a greeting cost of like $84 then the pharmacy also gets paid a dispensing fee which is a flat dollar amount per claim there's about a dollar down to what we call gross cost of $85 the member will then pay their co-pay deductible and then that goes down to a plan cost then rebates are often in aggregate about 6% about the average wholesale price so you figure about $6 and bring down to $5 the tricky part when you look at all this is that somebody will say well what's the cost of the drug and say I'm really upset about cost record well which cost are you talking about are you talking about this net cost at the end where I'm getting that rebate 180 days later is it the plan cost here is it what the member would be paying without the deductible of the $85 or with the deductible of the $85 or is it the $25 co-pay that member so this this is what makes it really hard when we have discussions around the cost of medications because at what point are we talking about the cost of medication the higher wholesale price one is largely being set by the manufacturers and so the PBMs and the insurers have influence over the discount, the dispensing fee and the rebate because those are personally negotiated in that part the deductible or the number co-pay is really set by the employer so whoever our client is is going about making those choices so it can be really challenging for someone stepping into this world trying to figure out what is the cost of drug because it can be different amounts at different points in the process if it's a pass-through arrangement as I mentioned before that also includes an administrative fee so you can add that onto it and it gets slightly higher when I was talking earlier about spread pricing as I mentioned there is like two models there is one right here the pass-through with the PBM where we pay that administrative fee and that's where the PBM makes money or the spread pricing this would be an example where I just walked through our example of our pricing here but there is also the pricing that the pharmacy benefit manager has with Walgreens and so for their reimburse so once again it could be $100 on the AWP but now around a 16% discount where we paid them $84 the PBM may return on paying the pharmacy $83 and where I paid them $1 per script for the dispensing fee it may actually be contracted at 50 cents with Walgreens which means that rather than I'm paying the PBM $85 it's $83.50 which ultimately comes down to a $1.50 spread on the PBM market so once again going back to the complexity of what is the cost of the drug now we're not looking at just this we're also looking at is this the cost of the drug over here it can all get very complex and it makes it challenging to go ahead and prove this is that hope at all or just making money alright this is typically the explanation around in general but then it gets a little different with generic drugs generic drugs have a thing called MAC pricing MAC stands for maximum allowable cost as I mentioned we have a pretty robust generic drug market in the country that means that when a drug does come off patent there's usually a 6 month specific period for one manufacturer to go ahead and produce a drug just to encourage somebody to enter into a generic drug market but then after that 6 month specific period is up anybody can go ahead and make a drug so the idea of MAC pricing is that all these different manufacturers out there make a drug price for the generic drugs and MAC price goes ahead and sets a schedule for what will be reimbursed for that drug regardless of what that manufacturer's price is this is an example for the console the exact same drug the console the whole way up and down same strength 100 milligrams these are all the exact same these are all the different manufacturers are making the console 100 milligram but if you look over here what their adjusted unit price is it can vary from one to the other okay so the idea of MAC pricing is rather than having all of a sudden claims for the exact same drug when it gets approved as a generic drug it has the same molecule and has to be absorbed into the body at the same rate so clinically these are all identical to each other so rather than Blue Cross Blue Shield is saying sometimes we'll reimburse at $36 sometimes it'll be $8.70 sometimes it'll be $24 we want to go ahead and say sort of all by cost and say you know what the cheapest one there is the one from DRX at $8.75 and we're going to reimburse at that you can go ahead and buy from any manufacturer you want but the fact of the matter is that we're going to reimburse at $8.75 right and that's the idea of what MAC price is trying to do so that by putting that in place then the other manufacturer they better lower their prices if they ever want to go ahead and be competitive and try to sell them and then that process will keep on happening somebody will also jump the price on DRX and may reset the MAC price at a certain point to say oh that's the new what the price should be so there's a way to go ahead and use all the different competitors out there to try and make the best buying decision by going ahead and setting that MAC price up and so because this happens so often and then PVM is the one that's going about managing the MAC price we wind up negotiating there an average discount off of generics right off of AWP for generics so they'll go ahead and give me a guarantee they'll say we'll guarantee you that it's going to be 80% discount on all your generics because there's going to be some that's going to be a 30% discount some are going to be a 90% discount some are going to be a 75% discount some are going to be a mull and aggregate we'll guarantee it'll be 80% so that's what we want to work with MAC price any questions about that part especially drug price increases as I mentioned this has been the biggest challenge for us if you take a look at just the average brand price increase over the last several years brand drives in general have just been going up in prices over here you can see the average increase in brand drives including specialty drives in the last decade or so the red line is the inflation rate CPI and you can see it's been outstripping it year over year over year when manufacturers have there's no competition for that drug they would often want to pay these large price increases it gets even more so though when you start looking into the impact of specialty drives that small subset of overall drugs remember these are only 2% of script what has been going on with our drugs this is about how much money what percentage of our overall cost has been spent on specialty drugs and you can see we're now up to 55% it's been growing the red line it's been growing consistently while the other part has been dropping significantly over time so why is that are people using a lot more well here's the number of scripts that have been and so if you look at it once again the red is the specialty drugs we've gone from 6,500 up to around 20,000 so that has tripled but still in terms of a percentage of the overall volume it's really small so reason why specialty drugs has seen that rapid of increase isn't just because of the number of scripts if you take a look at the increase in the cost per script for specialty drugs versus everything else this is really a big difference so back in 2008 it was about $1,300 for a specialty drug and now it's up over $5,500 meanwhile for all the non-specialty drugs we're at around $48 in 2008 and today we're at $63 I'm trying to read my own amount here it's grown somewhat but if that was the entire extent of pharmacy pricing increases over that time period of $48 up to $63 I probably wouldn't be sitting here to talk about pharmacy utility we really care it's this rapid increase that we're seeing on specialty drugs that has been causing problems for enslaving overall our pharmacy costing and healthcare costing jobs do you buy into the argument that sometimes the makers of specialty drugs use that say for example it's an oral oncology drug that it's reducing costs elsewhere in the system because people aren't having the adverse reactions to the chemo and things like that they're not getting the nausea they're not getting this and that do you think there's any offset or so there is an offset it's not entirely to the medication the cost of the medication so the point I always think about that is the cleanest example to really talk about is with hepatitis C because it's a straight up cure people used to have it and this new class of medication has come out as a pill form it has like 95 to 98% cure rate it's trained in fantastic medication and that's the point I always think about especially guys these aren't garbage medication these are wonderful medications these are stuff that we want to have as part of our society someone with rheumatoid arthritis rheumatoid arthritis if you're bedridden with rheumatoid or rice and you start taking humorous embryo and so forth you're up living a normal life that's fantastic that's what we want to have in our society no matter what is global sustainable over the long haul and it's the same thing with hepatitis C when the drugs you know eventually are harvoning Philly at Sciences was a company who brought the drugs to market they charge it initially around $85,000 so in England for their healthcare system they have an institute called NICE NICD that actually does studies to say to that point what is the cost offset what should we be paying for this medication and they came back and they said all the transplants and all the other things associated with hepatitis C the price should be $55,000 Philly at Sciences said at $85,000 so they're basically making $30,000 profit on $30,000 beyond what the cost was before and that's what the issue is now, if you've been living with hepatitis C and all of a sudden there's a cure where you say 8 to 12 month course of treatment and then you're done that's what we want it's just that when Philly at Sciences set that price they said at such a level that they were able to recover 100% of their entire investment in the R&D in year one so there isn't a cost offset I do believe that things that reduce nausea and so forth around chemo there is that but the prices are still set at a point where it's either entirely the cost of the drug is entirely offset or it's even higher than what we're doing and we're just shifting the cost of the medical rounds to the pharmacy so I don't doubt that there is an offset but I don't see a decrease in our overall healthcare cost to result in more medications right, what medication we're talking about especially drugs as I mentioned, Humera treats rheumatoid arthritis and other shields spent the most money on we have 374 patients out of our 140,000 members we've spent $17 million let's get it if you're a veteran of rheumatoid arthritis this is a fantastic sign it's very expensive to go ahead and provide the price of it has now come down it's been on the market for a few years and the initial wave of hep C patients has come and gone and they understand their investment back in year one the price has come down significantly since then for now there's been some other competitors coming to the market to be able to get the price down to around 30,000 for a course of treatment around that at $8,500 um Endrel competitor to Humera the story with Endrel and Humera is they've actually lost patent protection and they are fighting the introduction of the biosimilar which is like biosimilar to the genitor or biosimilar to the brain or the genitor they've been fighting the introduction because they know that we'll encourage use of the biosimilar similarly we encourage use of the genitor and cutting to the largely compact zone for multiple sclerosis tachycardia also for multiple sclerosis but you can see all of them for a comedy once again fantastic medicine for children's cystic fibrosis there's a kid I know in Vermont who has cystic fibrosis and he doesn't work on me and he plays on the high school soccer team which is an amazing testament to how wonderful that medication is that he's able to go around and do a lot of running and everything it's great but 8 patients, $1.5 million once again it's what is sustainable and so the pricing is just really challenging to go ahead and manage this would be when you start I don't want to get to this point I'm going to have a slide in here but the issue is that because there's so few people that take special drugs they impact employers differently so one employer can go ahead and have a couple like three or four patients with special drugs and they're costing them a loan out of the water meanwhile somebody else can go ahead and have nobody that's a special drug patient they look very different they're not having those huge cost increases and that's one of the things that makes it really difficult for some clients and just having to have the bad luck of having a really high cost increase where others don't so this is the slide where we look at our inflation rate to buy drugs and you can see these are the ones that have the largest inflation rate you can see this is the increase in the AWP per unit for the different drugs if you look at Humara and Nimbol there's an increase there Stelaura is another special drug Revlamid Humara again so Gelenia these are the ones that have the largest increase in the CGSE impact from the inflation rate from the price increase taken from 5 million factors so one of the arguments that they all make is that they pay the rebates and the reason why they have to take the price increases is because we keep on forcing them to have to pay the rebates and they're trying to put a cart before the horse it is true that we do want to claw back as much rebates as possible for our clients that's an important thing that we want to do to try to manage costs however the price increases are taking our outstripping the increases in the rebates that we're getting so for example do I hit the wrong button here in 2015 to 2016 the AWP for all of our drugs increased about $18.5 million our rebates at the same time increased about $1.6 million so if I look at the AWP per claim that grew by $31.25 we want the rebate per claim grew by $2.18 so I fell behind by about $29 per claim even though the rebates have wound up increasing you can still wind up having a larger negative impact by the increase in the price of the manufacturers go ahead and take same thing for 2016 and 2017 $22.8 million increase in AWP while our rebates only increased $6.8 million so we fell behind $35 increase per claim on the list price while the rebate fell be grew by only $8.38 when you hear this argument they say they had to keep on increasing the price because they had to pay us more rebates it's a little bit of bologna in that they are taking much larger price increases than what the rebates were if that was the case then it wouldn't be much so biosilvers that I mentioned earlier these are these are what we're hoping to help control the specialty drug things that Vermont took a good step forward last year where they added biosilvers into the substitution law that is out there already for generics there's a law that says we want to go ahead substituting a generic for a brand when it's available they added biosilvers into this now we just need the biosilver market to become more robust than it is right now the biosilver drugs are already available in Europe they tend to be about 25-30% less than specialty drugs the first ones came out in March of 2015 we're still waiting on those ones for the really big drugs they got time and of course they're talking about maybe 2021 by time we see the biosilver for that so we're going to keep on taking large price increases like I was saying back on this slide they know that biosilvers come to market and they know what the insurers are going to do especially if they're going to go over to the biosilvers so they're going to grab as much margin now as they can when that court case gets settled is there any retroactive payment? no but this is one of the things that the member of bills in their floater ran in DC about trying to go ahead and stop the use of the court system to hold up the introduction of generics and biosilvers in the market and this is a really bright place for where federally good law changes go ahead and help out everybody but the FDA we really want the FDA when you look at generic drugs there's a brand name like say Lipitor and then the generic name would be Simistat Simistat is the same for every single generic drug what we want is biosilvers to be also the same sort of naming convention which implies an interchangeability to not have every biosilver come up with his own brand name the FDA to go ahead and impose a naming convention and also its designation of interchangeability between all of them so that we have a really robust biosilver market like we do with the chair and I think we'll get there eventually it's just going to take years of pushing back against and trying to get the right price passed this is just pointing out that the price differential in Europe and so forth I mentioned that generic drug price increases this has gotten a lot of headlines lately in the last few years so I just wanted to address it generic drug prices some examples have occurred where generic drugs have had huge price increases but in general generic drugs have a very little inflation rate remember the chart I've shown earlier with like the double digit inflation rate on the brand drugs if you look at this, this is Blue Cross officials 0.2%, 0.1%, 0.2%, 0.1% those are manageable amounts that's the sustainable levels of inflation that we can deal with, right? there have been some really extreme examples of doxycycline doxycycline went for $1.97 per day up to $2.16 per day in 2015 there were some manufacturing issues and so forth around that Daraprim is the story that with our friend Warren Screlly who was in the news quite a bit for a while this is an issue where there are some really old generic drugs that has so little volume on it that there is only one manufacturer out there but there is still some volume on it and what he and some other companies did they understood that there is so much cost to go ahead and get a manufacturer so they ramped up to get approved to go ahead and produce a drug you can buy the rights to that one drug and that one manufacturer that was doing that and then you go ahead and basically set the market for whatever you want to pick so he took this drug called Daraprim which had been on the market for $13.50 and nobody else was making it nobody was going to go through the expense for the small market but he can go ahead and increase the price of the $750 and nobody can do anything about it right? and there have been a series of these kind of drugs out there we've taken an approach of once again that counter-detailer that pharmacy we have out there we identify what patients would be on those drugs and we work with a compounding pharmacy out in San Diego that they'll go ahead and they'll do a compound called that medication for Daraprim it's often taken with potassium so they'll compound the active ingredient Daraprim with potassium and they'll send it to the person for $1 per pill and they'll have a carry-on visit the doctor and talk to him about $750 for $1 for the doctor we hope to do that so we try to push back on a more nuanced approach to it but in aggregate these are abuses that do occur out there they don't really amount to anywhere aiming at a small smidge in comparison to the impact that there's a price increase for the specialty drugs so in Vermont we a few years go past what I call the shock of shame build that basically the Vermont Care Board working with Diva puts together a list of the highest priced increased drugs for the previous year and previous five years and then the Attorney General can then have conversations with the manufacturer to try to figure out why and one of the frustrating things is that the list that we're getting it does not reflect rebate pricing so it may not be accurate is there a better way that we could be doing this? I think it's been updated now because I know I just worked on these analysis for PAG at the Vermont Care Board as well as Jill Abrams at the Attorney General's office and we're now including rebate information in there too to eliminate that point because the manufacturer will go ahead and say well this is not including the impact of rebates so we're now looking on a post rebate basis what I sent over was that what's that on the website right now so I think that part has been correct Diva's in the audience too Nancy who does the list is here so great but one of the things that was popping up because you're saying that generics aren't really the problem in the growth and several of the drugs that end up on the list were generics so you have to also look at the amount of volume on those ones so there are some that have really high price increases as I mentioned there are some examples that have gone through a family, a drug and such low volume lines on one manufacturer they can go ahead and pure crack monopoly what I would call because if you're actually going ahead and getting your plant up to speed and approve by the FDA to go ahead and produce a drug it's not worth it right so you can go ahead and take that one drug and check on the price but there's so little that doesn't really have an impact on the overall aggregate amount that Blue Cross Blue Shield or any other payers but they've been able to find those opportunities they can make a lot of money for themselves and it's wrong and should be addressed but it's not the overall driver over a drug cost the driver of drug cost is really there's price increases on special drugs like humera and emerald and a big reason for those price increases is the manufacturer will never go ahead and say this the reason is that they know that eventually those biosilvers are going to hit the market and they're going to lose their market share to those biosilvers and so they want to go ahead and take a larger price increase on the price that they already have and they're not going to put that in any sort of statement too because it comes off as rather gauche right but that's basically what's going on this is the size I was talking about impact to so this is a local mental health substance use disorder provider this is the impact especially drug cost if you take a look at this is the non specialty cost for them they have a 3.7% decrease in cost but just a handful of patients for them just an unfortunate thing these are going to get very drugs but the huge price increases they have two patients on emerald patient on opeth patient on carbazone it has 73.8% increase $388,000 additional cost so now that provider has to charge more from your services in order to offset that so this wants to rip one through the entire healthcare system or this is a local college in Vermont that they had 1.5% increase on non-special drugs these are that's why the generic drugs are lumped in like I said this isn't really what the trending problem part is especially drugs where for this employer this local college has a 1.4% increase in specialty drugs just a huge part of that is price increase that's $282,000 that they have to find in their budget to go ahead and take care of from that increase in specialty drugs so that's a really wide impact on a couple of our employers someone else who went out to one day knows specialty drug rating they're like yeah everything's got to do with the issues so any questions about that I have one slide on lab price I just wanted to throw out there we've been talking a lot about these increases in pricing on farm stages I want to give you a heads up that there's a developing issue on a large increase on lab work as well lab is


Welcome to Toffy TV, it is the Everton News Daily. Everton are reportedly very interested in Chelsea's striker Armando Brogiat. Those links have continued today, reports coming out of London that Chelsea wants around 30 million euros for Brogiat. Everton and Frank Lampard are very interested in taking him to Gwdysan Park. West Ham apparently also interested as well. The striker of course spent the season on loan at Southampton last year, did quite well. Frank Lampard gave Brogiat his Chelsea debut when they beat Everton 4-0 a couple of years ago when Lampard was in charge there. He's an interest among Brogiat, he's got a lot of ability. Good age, obviously 20-21. He's a good age, I think Everton could certainly progress him as a player. The fact that he's obviously worked with Lampard before might be a bit of a pull. The fee is obviously prohibitive at the moment but if Chelsea are interested in the Chelsea and are more on that in a minute, then maybe a deal can be done that way. It is a gamble, it is a risk. It's whether or not Everton are prepared to take that risk and 30 million euros is quite a lot of money. But if you get them right, who knows how good he could become but apparently Everton are very interested in taking him from Stamford Bridge to Gwdysan. So we'll have to wait and see what happens with that one. And apparently today Everton are one of a number of clubs interested in signing Christian Eriksson, who's contract at Bremford expired in the summer. Everton have apparently tabled an offer to the Danish football player. He's also apparently got offers from Leicester Manchester United, Bremford trying to keep him West Ham and Ajax among the clubs very interested in the 30-year-old. I don't see this one coming off to be honest. I think if he's got clubs after him who are playing in Europe, he may well be more inclined to go to them than to Everton but according to reports today. Everton are one of the clubs very interested in signing. Who knows. Chelsea are interested in taking the Charleston as I said in the Brojure story before. Thomas Tuchel is a fan of the Brazilian. The 25-year-old scored 10 goals for Everton last season. A 5 assists, he was our top scorer. And apparently he wants to leave. That is what all the reports and all the rumours around them are saying. He's told Frank Llandparty, told the Everton board that he wants to move on this summer. He wants to play in the Champions League. Chelsea obviously a Champions League club. But it's up to them to make an offer that Everton will accept. I've seen stories today saying that Everton have made the mind up on how much they want for him and won't accept anything less. Now whether or not that can be, you can use players in that to make that money up and Everton will be happy with that. I don't know. We know the Blues are interested in Conagallager. Brojure, who we've already spoke about, Calwell, who spent season on loan on Huddersfields and another one who's been muted with a loan move to Godderson. So there is players there who Frank Llandpart might be interested in. But Everton have to hope that Chelsea want to do a deal quickly if that's who we're going to sign them. And get the money in so they can start with their recruitment this summer because we can't just let this drag on. I know we're pretty powerless as to how long it drags on for, but we want to make move for the players we want. And if we're going to lose our top scorer from last season, we have to be looking for ways to replace him. So hopefully things will move quickly. But who knows. And finally, young midfielder of issues who was released by Everton in this summer as they signed a two-year deal with Tramir Rovers. If the 20-year-old made 22 appearances for the under-23 side last season, scored five goals and registered two assists. He's gone over to Tramir, obviously James Vaughan is the sporting director of Tramir. There is a thinking that Everton and Tramir are going to link up a little bit closer from now on and Everton are going to try to send some of their younger players on loan over at Prenton Park. I think it's a really good idea. I think it's something Everton should try to utilise if they can. Obviously we saw Lewis Warrington go on loan there in January and had a successful loan spell over there at Tramir and now Reese Hughes has gone and signed permanently for them. So who knows, maybe a couple of our younger players will go over it on loan this season thinking people like maybe Reese Welsh or someone like that who might think needs games or even Tyler Rangyango if he's not going to be part of Everton's first team squad. May go over there and get games as well. So we'll have to wait and see but apparently a link up is closer between the two clubs. Reese Hughes has gone there and good luck to him. He signed a two-year deal with the Prenton Park club. That is it for the news daily. Give the video a thumbs up, subscribe if you haven't and if you want more videos join us on Patreon. The link is in the description and the QR code is on the screen now. See you later.


OpenAI came out with one of the most advanced chat boards called ChatGPD. ChatGPD is an AI tool that can be used to have conversation and dialogue, and can share responses to any questions asked. We have four simple suggestions on how you can do so. Our first suggestion is that you can use the AI tool to explain a concept. Instead of scrolling through Google and finding out the definition of things, you can simply ask to explain a concept to you. Our second suggestion is to compose text. Say you want to ask your boss for a leave, or you want to send an email about some clarification or a follow-up or any delay. You can ask to fill in these messages for you and make your life a lot simpler. A third suggestion is brainstorming ideas. You can ask it anything. Ideas for what to give your granny for her birthday. A good music playlist for a party. Or some books to read for business ideas. Or even how to advance yourself. There are several things you can ask you to give your suggestions upon. Our fourth suggestion is a bit shocking. Take styling tips. Now ChatGPD has all the information of the board. To say you are ever in a conundrum where you do not know what to wear, it will compile a list of tools and tools and tips and tricks for you to use.


Are the ocean so polluted that it's no longer safe to eat fish? The question I get the most is about mercury, and certain larger fish, especially carnivorous, do accumulate mercury over time, but that's naturally occurring largely negated by selenium as it's antagonistic and pales in comparison to the other stuff that can be in fish. If you simply avoid those higher mercury fish, king mackerel, marlin, swordfish and certain tunas, mercury really is a distraction from the main issues. Now there are thousands and thousands of studies on different types of pollutants in fish, but the general answer is to avoid seafood if you can, it really is that bad. Get your nutrition from land-based sources, not that those aren't polluted, just not as poisonous. And so mega fatty acids, EPA and DHA do primarily come from fish. If you want to include it in your diet, Alaska and New Zealand are probably the least polluted, and of course those fish farms where the elite are raising their caviar. Even so, you want to keep it to smaller amounts of the more nutritional parts of the fish, such as that caviar, salmon roe, and fattier fish in minimal amounts, which is why we do have it on Frankie's free-range meat, as well as raw cod liver oil. If people want it, we might as well provide a high-quality version. In my research, I've come up with 11 categories for these pollutants. The first few fall under POPs, persistent organic pollutants, which were widely used during the boom in industrial production after World War II. These include the well-known ones, PCBs, DDT, and dioxins. PCBs are polychlorinated biphenyls, and they're highly toxic industrial compounds. They were present in electrical equipment, oil, insulation, paint, and plastics, starting in 1929 before they were banned 50 years later, 1979. And they're associated with various types of cancer. They have a fairly long half-life in the body, and can take over a year to be completely detoxed. And that really applies to most of the stuff here. You have to remove it from your diet and be clean, quality, organic for pretty long periods of time to recover. DDT, dichlorodifenyl trichlorothane, probably the longest word we've ever pronounced on this channel, is one of the most controversial pesticides ever made. An estimated 4 billion pounds have been used in the environment. And back in the 1960s, they studied certain birds that became so polluted, the birds were no longer able to produce offspring. Exposure to high doses result in vomiting, shakiness, and seizures. And a lot of these chemicals, you'll see, oh well, it causes problems during development. Yeah, well, that's because babies are less tolerant of toxins.  And I remember, you know, one time I ate a bunch of farmed salmon for two or three days straight carnivore style, and after I ate it, I was laying in bed, like, literally shaking. I felt dizzy. I threw up a few times. I was poisoning myself with probably DDT, and who knows what else. So then we have PPDDs and PPDFs, which are polychlorinated dibenzodioxins and polychlorinated dibenzofurans. And these are more commonly referred to as dioxins. They're products of industrial practices, majorly from incinerations such as burning waste and trash. Environmental exposure to dioxins results in developmental and reproductive toxicity in fish, birds, and mammals. The Great Lakes are an example of an aquatic ecosystem that has become greatly compromised by these types of pollutants, and as with most toxins, they're stored in the fat and liver, create oxidative stress, and as we said earlier, it can take years and years to be detoxed from the body. PPDEs, aka polybromated diphenylethers, are a group of compounds used as flame retardants. They're found in TVs, toaster ovens, mattresses, and drapes, banned in 2004, but still pollute our environment greatly. The level of these flame retardants was five times higher in the Baltic Sea than the Atlantic Ocean. The Baltic Sea being one of the most heavily polluted water sources, so much that fish there aren't deemed safe to eat in most markets. Over a dozen years after these products were banned, they're still poisoning people. And that's something to keep in mind, enclosed water sources take dozens and dozens of years to clean themselves out. Moving on to microplastics. As a result of widespread contamination from human activity, microplastics are ingested by many species of wildlife, including fish and shellfish. Because microplastics are associated with chemicals from manufacturing and they absorb from the surrounding environment, there is concern regarding both physical and chemical toxicity. Following consumption, nanoplastics are transported through the gut into the blood and can cause toxicity in organ cells. There's also chemical toxicity associated with the plastics, but has not been as significant as these other chemical pollutants found in fish. Corexit is a product line of oil dispersants used during oil spill response operations. And one thing we didn't put on here is the actual crude oil coming from those drilled holes into the ocean that is also very, very toxic to wildlife, possibly more toxic than these chemicals and the Corexit itself. I'm sure most of you remember back in 2010 we had that really bad BP oil spill in the Gulf of Mexico where hundreds and hundreds of millions of liters of crude oil were leaked into the ocean and then they put the Corexit in and these different types of coral larvae were dying, their survival rates decreased, same with all of the other wildlife. This is basically just another legal toxin they're allowed to dump in the ocean. Who knows if it's actually making things better. Next up, we have agrochemicals and this is something I speak more about in the context of raising cattle, pork and chicken in a conventional farming setting. And not to say that the farmer isn't irrigating from a water source that does contain this. I would imagine those farms in the Great Lakes area of New York might be irrigated with poisonous water. Therefore, the cattle, the pork, the chicken that's consuming that, it's still better off than the fish but still consuming chemicals outside of the pesticides, herbicides, fungicides and insecticides that they're spraying on the crops. Two agricultural runoff events involving the pesticide, as in Phosmethyl, occurred in July 2002 on the Womott River, Prince Edward Island in Canada. That resulted in the death of thousands of fish. Thousands, it literally killed the fish. That goes to show how much of this stuff they're allowed to dump in the ocean without repercussion. The water is so toxic the fish died, yet the next year people were eating fish out of the same river. Imagine if you went swimming in that water and took a gulp of it, would you have drowned? Who knows? Pharmaceuticals and antibiotics. Not only are farmed fish directly given antibiotics which are dumped into the ocean by the drum fill, except for the elite Sturgeon Caviar, I doubt they're giving those fish antibiotics. Our water supply is laden with urine and fecal waste from millions of people pumped full of various drugs from birth control to antidepressants. This can include all the estrogen in the water. The first priority is to stop drinking that water in your lifestyle, but it's still ending up in the ocean and therefore we're probably consuming metabolites by eating certain fish and shellfish. Heavy metals, zinc, iron, copper, chromium, cadmium and lead all accumulate in fish depending on environmental factors. There are actually nutritional databases where you can see over a 10 fold difference in the mineral content of certain shellfish grown in different waters. One clam has 80 milligrams of zinc, another has 800. Two clams, one's going to poison you with heavy metals. Absolutely crazy. Since many of these minerals are naturally occurring, the levels of pollution in the water correlate to the amount of metals in the seafood, interestingly. These other pollutants, when they're higher, equal more metals in the fish. These pollutants prevent the fish from being able to detox these metals from their organ systems, so they just accumulate in unrealistic amounts. If that ocean life is transferred to a cleaner water source, then the shellfish starts detoxing the majority of the metals in less than a week. I'm assuming that applies to fin fish as well. If you guys hear anyone repeat what I just said, that's a hypothesis. It's not something I've read anywhere. I looked at a few studies and I put some pieces together. I'm assuming that the chemicals are preventing the fish from detoxing the heavy metals. We can deduce that if fish are moved from one water source to another and the metals go away, then that's very likely a true hypothesis. The most gross one might be human waste. Sewage, whether it's urine or feces, it's going somewhere. This relates back to the antibiotics, chemicals, various metabolites that are poisoning us. These create unnatural strains of bacteria in our stomachs, which in turn are excreted in the fecal matter. Then if that fecal matter is consumed via some shellfish or fish that contained it, you can get very, very sick. Come to think of it, I bought some oysters like a year or two ago at a supermarket I probably shouldn't have. When I opened them up, they literally smelled like rotten sewage. They were probably in rotten sewage. I guess this would happen if you were to try to raise oysters near any major city, perhaps the East River of Manhattan, or really any water source near any type of pollution. Now, you could argue this entire topic has been swept under the rug, but nothing more so than the radiation pollution because this might be so bad it wipes all the other stuff out the window. The Fukushima stuff, this one aspect for some people is enough to never consume fish near Japan, certain sources, and that Pacific Ocean where we might find some decent seafood around Alaska and New Zealand might have actually become compromised because of the Fukushima nuclear disaster. These degenerates in charge have been polluting our food for dozens and dozens of years. The ocean is no exception. How have they allowed the dumping of these chemicals combined with the lack of acknowledgement is truly disgusting. If you understood how poisonous fish can be and that they're still even allowed to put it in the supermarket, it's crazy. If you understand the negatives in fish and you can translate that to the rest of your diet, you'll be worrying more about not poisoning yourself as opposed to consuming nutritious food. Personally, I have no issue eating certain things like the caviar, the salmon roe, and I still do on occasion. But I would certainly be wary of the majority of seafood as it is very likely not safe to consume.  But again, there's a reason we have lamb brains and animal brains and that type of stuff on Frankie Syrians meat. It's a much safer source of omega three nutrition. So thank you guys for joining me today. Let me know how you like this and if you know about any other really in-depth fish pollution stuff, definitely point that to me. I'd love to check it out and see how this compares. But outside of that, you can go to frank-defowner.com. You can see everything that's available from Frankie Syrians foods, Frankie's Naturals. Hopefully we have a couple other things going for you guys soon enough to make you as happy and healthy as possible. So thanks again for joining me today guys. If you could please like the video, leave a comment and please if you can share it on social media. We're very hard every day for about four years straight now trying to make it happen. I'll see you guys for tomorrow's video.