Imagine this. You're at the Swiss Hotel in
Chicago surrounded by top executives from leading insurance
companies and health systems.
Welcome to Becker's Fall Pair Issues Roundtable, November
4th through 6, 2024.
Picture the excitement as you gather business cards
from over 500 executive level attendees,
building invaluable connections.
Feel the energy as you participate in over
26 educational sessions led by 90 elite speakers.
Envision yourself engaging in lively discussions about new
health plans, hospital at home models, behavioral health,
and price transparency.
Now imagine being inspired by keynotes from boxing
legend, Sugar Ray Leonard, and 4 time NBA
All Star, Chris Webber. Their stories will leave
you motivated and ready to innovate.
Don't miss out on this unique opportunity. Get
registered today. Visit beckershospital
events page. See you in Chicago.
Hello, everyone. This is Jacob Emerson with the
Becker's Payer Issues podcast.
Thrilled today to be joined by a special
guest. Cronos Manolis is the chief pharmacy officer
at UPMC Health Plan. Cronos, thank you so
much for taking the time to sit down
with us on the podcast today.
Thanks, Jacob.
So, Cronos, before we dive into everything that
we wanna talk with you about, can you
tell us a little bit more about yourself,
your background in health care, and what it
is that you're doing today at UPMC Health
Plan?
Yeah. So,
pharmacist by education, been in the business,
for lots lots of years, really within,
all the pharmacy channels. So I've worked in
specialty pharmacy,
worked in retail pharmacy,
worked at a PBM,
and, for the past,
almost 19 years,
worked here at UPMC,
where I, am the chief pharmacy officer of
been really responsible for all things,
on the pharmacy service line.
Fantastic. So a long career in in health
care and and a long one at UPMC
specifically.
In that vein, Kronos, can you hoping to
talk with you a little bit about your
perspective on
the pharmacy and drug access landscape
right now. There's obviously there's so much we
could talk about from the federal level and
things like Medicare negotiation powers,
and access issues to on the private side
in terms of GLP ones right now. It's
obviously a hot topic within the pharmacy space
and the costs and access issues there.
So from your role as as chief pharmacy
officer, can you give us a 30,000 foot
level view of where you view pharmacy
and drug access issues
today?
Yeah. So, you know, you framed it right,
Jacob. There is tons of complexity in pharmacy
today, and we could we could do,
a number of these. Right?
And, you know, from my perspective,
you've said it. Right? I've had a long
career, and I have never seen the kind
of complexity
and attention that pharmacy is getting. I really
believe it's reached its apex.
If you think about it, I have seen
more
headlines about health,
insurers struggling
with their costs,
but drug being one of the top three
reasons that really has never happened in the
past, and it's almost, like, repetitive.
But if you think about it,
we've got a pipeline
that is gonna hold promise for drugs that
we've we've never seen before,
onetime cures, etcetera.
That is only gonna get enhanced by AI,
and other tools. And then you've got a
Fed
that
has accelerated approval programs, things like that. So,
you know, really, the track is
is slick and and drugs are gonna come.
And then you've got, you know, drug pricing,
which never seems to end.
And then the IRA.
You know, I I think the IRA,
what's been done for the benefit
is just tremendous for patients, for providers.
We're finally gonna close the donut hole. We're
gonna cap, you know, patients' cost at $2,000
on drug. I mean, that's literally a 150
plus a month,
and you get all the drugs you want.
And and so, and then we fundamentally
changed the math
in the equation. So who's responsible for what?
So you're gonna see, you know, you're gonna
see some growing pains as we get through
that. And then, of course, we have drug
negotiation, which will kick in,
a little while, and anyone that tells you
they they understand the
of
that, we're only just speculating
at this point.
And and you've got PBM reform.
And and PBM reform is gaining attention.
You see all the activity. You see a
lot of the rhetoric coming out of the
the FTC,
and who knows where that lands.
But at the end of the day, we
we can't let any of this distract us.
We have
we have we have got to get the
value of drug. And so, you know, at
at my plan,
we're really trying to engage all the stakeholders,
our members,
our providers,
pharmaceutical manufacturers,
retail pharmacists,
anybody who touches the patient because I think
that's the way we're
gonna get to better care,
better member education, etcetera.
Absolutely. It's such a great message that there
is a lot of swirling conversations and messages
going on right now all over the country
and certainly in Washington around
drug costs. You mentioned the PBM conversations that
are going on in the headlines that we
see almost daily, Cronus, around this this topic,
but a but a great message that you're
focused on on drug costs and access for
your members at UPMC Health Plan.
And fascinating to hear you talk about how
you think we're at the apex of of
pharmacy,
interest right now across across the media and
the general public.
But you mentioned something earlier in terms of
drug costs and
one drug class that we've seen mentioned over
and over again this year,
by health plans like you,
by self insured employers,
by public health plans like state governments all
over the country. They're talking about GLP-1s.
So and the cost, some some payers have
even completely dropped coverage of these drugs because
of because of the high costs.
So how are you dealing with this? Some
have some have called this GLP one insanity,
dominating the pharmacy space. Where do you view
this from from the perspective of UPMC Health
Plan?
Well, you know, let let me take a
step back first because, you know, when we
talk about Apex and and what that means,
I I judge it very simply.
What what drug names does my CFO know?
Right?
Everybody knows the GLPs. Right? The the my
neighbors know about GLPs, and it really and
I I think January of 23,
the combination of the pandemic,
and, you know, really the world getting back
together,
there was just this really social media craze
about what these drugs could do. We've had
GLPs for diabetes for a long time.
And but there was just a whole different,
accelerant there.
But I I think, you know, the way
I look at it is we have to
really separate the 2 types of GLPs. There
there are GLPs for diabetes,
and those are Ozempic and and Monjaro and
Trulicity, and then there are the GLPs for
weight loss.
And, you know, the the and we tend,
as a population, we just blend them all
together.
And,
and and it's because of the shortages.
You know, people were trying to use one
instead of the other, and and, you know,
we we've got shortages that are impacting diabetics.
And sometimes the shortages are for the weight
loss drugs that impact other you know, interrupt
people's treatment.
But at the end of the day, the
demand is incredible.
We've had shortages,
and
these shortages are being mitigated.
It makes us really nervous to see what
is gonna happen to this category. We've had
sequential
quarter over quarter growth
in double digits,
And I can't remember a drug category
that's had that kind of action to it.
And, you know, I and think about it.
For weight loss drugs,
most people don't cover them. Right? So you
Medicare, it's a it's an exclusion,
and I guarantee you
it won't be that way for long.
We will start to see,
the pressure
from all sides to to cover these drugs
in Medicare.
And in commercial, you know, we it's a
buy up generally. And commercial plans like ours
that have large fully insured books, we're on
the same pressure.
You you can't have it both ways. You
can't blame obesity,
on everything that ails us downstream
and then, you know, not cover the drugs
because these are effective drugs. It was different
when we didn't have effective drugs. These drugs
were 15%,
you know, body weight potential.
So but it's such a massive population.
And the data, the early data is just
really early discontinuing
rates. Right? So what did we really accomplish?
And the other thing,
the elephant in the room is people gain
the weight back. Not everybody. You know, if
you if you adopt the right lifestyle, who
knows? But that's where a lot of the
manufacturers are going next. How do we find
drugs that where you don't gain the weight
back as easily when you return return normal
life? So and, additionally, you know, you we
had all these compounding shops that are popping
up all over the place,
and and then we've got the manufacturers
themselves going direct to consumer.
You don't see a lot of that certainly.
So here's where I just have a real
challenge,
and I get it, but these are really
good diabetes drugs.
We went from a period of time for
type 2 diabetes that we didn't have great
drugs. These are good drugs. You know, they're
cardio protective. They you lose weight, which helps
in type 2.
You have a one c reduction.
And yet
the explosion
of cost and demand has caused a lot
of our stakeholders to say,
you know, manage these drugs. Put more prior
auth on. Put, you know, more management.
We can't afford the costs anymore.
And I I you know, again, I've been
I've been at UPMC for for 18 plus,
and I've been,
in the industry in managed care for a
long time. I I don't ever remember
that we put barriers on diabetes drugs,
and that is really something to think about.
What what are we gonna do tomorrow when
the innovation
is gonna be even greater?
I I I think that is
our challenge.
But look. You know, I I also,
I came from the
the you know, a world where, you know,
there's been lots of these kinds of blips,
and we'll manage through them. But, anyway, I
think that's what we're trying to hold on
to.
Wow. I I mean, just so interesting to
hear you talk about this. So many different
angles and nuances that we could attack this
conversation from, but so interesting to hear that
this is the the most explosive drug growth
you've seen in your career,
Cronus. And and, you know, to your point
is well heard in terms of people often
do gain the weight back on these drugs.
And we saw the largest study
to date on on that topic from Blue
Cross Blue Shield come out earlier this year,
finding almost 60% of the people prescribed these
medications
don't actually reach a meaningful health benefit. So
to your point, it is fascinating to see
the research and and the data points that
are coming out about this.
You you had said earlier too that it's
not it's not necessarily just GLP ones, you
know, driving up these costs. It's specialty drugs
in general. And we've also been hearing employers
self insured this year talk about the the
rising cost of cardiac and cancer drugs.
So I think the broader question here, Cronos,
is what's keeping you up at night from
a broader drug access and affordability perspective
for your members?
Well, I think the biggest change that I've
seen over my career is we just were
running out of levers in pharmacy
to manage cost. If you whether you like
them or not, our traditional levers were really,
you know, pay
squeeze pharmacies
more,
drive try to squeeze pharma
more, in the in the sense of more
rebating.
It was really a volume play.
And if if you if you kinda look
at it and and utilization management, prior auth.
Right? And if you look at those levers
and and so we would live off of
really just driving,
the supply chain down
and squeezing
cost out of it. And and now you
look at it.
Prior authorizations
is is out of favor. You know, there's
lots of enemies out there.
I don't know that I agree with it.
I think it's it's right,
but there is there is it's become table
stakes. It's not really
a lever the way we used to think
about it.
Network pharmacies have become really noisy, and and
rightly so.
And that's what's driving all the PBM consternation.
So anyone who's thinks they're gonna live on
reduced pharmacy reimbursement,
it's not gonna happen.
I see it as like hospitals.
We give hospitals
cost of living increases. That's never happened in
pharmacy.
But I think
network pharmacies have really reached the bottom.
You know, in one sense, PBMs did their
job. We went out and charged them
to reduce costs, but, you know, we've kinda
tilted too far to the other side.
So I I think that's a lever that's
not gonna happen. Rebate uncertainty
is is really what's out there. Right? So
there's been
you know, we've we've rode that wave.
Now with drug negotiation
on the Medicare side,
what will pharma do on the
on the rebate side? What will they do
crossover into commercial? Will there be unintended
consequences there?
And, you know, biosimilars,
sure, we've saved some money,
but, you know, not like I think everyone
thought. It's it's it's opaque.
It's hard to explain. The brand name companies
are are
all involved.
And and so I I think, you know,
you you you you have these levers.
You have the demand for,
these innovative therapies,
like,
the gene therapies and rare therapies. They just
come to market faster and faster, aided by
the FDA,
aided by technology,
and then you layer on
inequities and health disparities.
Even when we give drugs away, people don't
understand them. They don't take them, and that's
not gonna be,
something.
So at the end of the day, you
know, we have been through this before. So
in the in the early 2000,
5 drug categories
drove
a significant
cost.
Those categories
were statins,
PPIs,
non sedating antihistamines,
SSRIs,
and,
ACEs and ARBs. And if you look at
it, those 5 categories, they're still the standard
of care. They're all just generics and pretty
much give them away. But managed care had
to work their way through it.
I find ourselves in a similar spot. We're
gonna have to work our way through it.
The pressure will be there. The demand will
be there.
But I do get I do get,
concerned that the lever's
not sure where the affordability is gonna come
from.
Absolutely. So so health plans, your employer customers,
you're running out of the levers to manage
these pharmacy costs. I think the natural question
to that, Cronos, is if you you personally
could wave a magic wand, what are the
some of the things that you would change
policy wise
in in the private market to ensure preservation
of the pharmacy benefit?
Well, I mean, I I I'm gonna make
this simple,
and it's not. But,
you know, we need value in pharmacy. There
there's very little value based
construct
in pharmacy. And what I mean by that,
we still pay you know, I I I
worked at a retail pharmacy,
you know, many, many, many years ago. It's
it's not a whole lot different. You have
automation. You have technology,
but you're still making margin on on drug.
You're still make you're all of the clinical
services
we get out of pharmacies
are funded by drug margin.
It it doesn't make any sense. Right? It's
certainly
you know, it flies it's the direct opposite
of what we do on the medical side
of the house where we, you know, we
have the ACO model. We have more physicians
at risk.
You're you have alignment. We don't have any
of that pharmacy today.
And I think, that's just one aspect of
it. When you think about these rare therapies
that are coming to market,
The structure we've had over the last 20
years has been,
let me get my drug on formulary, and
I'll pay you a discount. How about let's
see if your drug works,
and then we'll see what the price is
gonna be. So outcomes based contracts, value based
contracts, we need those in pharmacy as well.
Those are coming, but they're I think we're
kicking and screaming and dragging everybody with us.
And then physician risk models as well. We
we we talk all the time with
docs are frustrated because the drugs are so
expensive. They don't always have the tools.
But at the end of the day, they
control the scripts, so we have to have
them involved. So in my opinion,
in order to,
really get everybody aligned, including the PBMs who,
you know, started out as the greatest concept,
you know, you can real time alert people
before the drugs go over the wall. All
that great technology, but they've, you know, they've
been able to
vertically integrate and and really find themselves in
lots of different businesses with lots of different
conflicts.
We need to get value.
We need to get everybody,
on board.
And I think it's gonna be uncomfortable for
a lot. And because we didn't get here
overnight,
if you want change, everyone's gonna give,
and it's gonna be a you're gonna have
to give to the uncomfortable point. But we
gotta start somewhere.
Kronos, what what do you make of, some
of the large PBMs,
Optum,
Caremark,
I believe Express Scripts has as well, launching
with what they call,
more more cost plus transparent
models
amid the rise of Mark Cuban's pharmacy company.
Any any thoughts there in terms of, you
know, you mentioned the value based outcomes based
contracts.
Are these new models examples of what you're
talking about, or is this more
public relations fluff? Where do you kind of
fall on that?
Well,
TBD. Right? I mean, I've been advocating for
a cost plus model,
from the PBMs for a lot of years.
And,
we currently use Express Scripts, and we we
talk about it a lot.
But I think,
cost plus needs to be associated with transparency,
and I think what's happening is you're you're
getting,
you're getting the little guys to force the
big guys to to get get in line.
But
I think I think the fundamental challenge we
have
is that
government
business is really tough, Medicare especially. I mean,
think about the rocket science of
having to calculate
all those dollars
in real time, and and, you know, a
lot of smaller PBMs don't wanna invest in
Medicare.
So plans like ours
that have,
multiple lines of business, you know, there's a
there's a limited field out there. But, you
know, it's a start. It it's that's what
competition does, so so that's great.
You know, I I think,
personally, though, I'll I'll I'll say this.
The more we fragment the care, the more
cost plus pharmacies that show up.
It's gonna destroy the PBM model. I'm not
shy about saying it, and I'll defend it
all day long.
The PBM model was built for all the
claims to be in the pool.
When the claims are in the pool, you
can run all those safety checks. When the
claims aren't in the pool anymore,
Think about what a medication reconciliation.
So we've got CMS
paying us to do med rec in our
stars programs.
And yet, you know, 3 of the 12
claims are missing.
What? How does that help? So I am
very sympathetic that people have to find their
ways
to affordability.
But if we don't data share and care
coordinate to make sure all of our current
safeguards
operate,
I'm not sure what we've accomplished.
It's fascinating and big predictions
from you, Ronis. Yeah. Any anything else we're
missing? Any any final thoughts you wanna provide
while you have the ears of a lot
of health plan peers all over the country?
You know, I think we can't get distracted,
and we have to weather the storm.
It is like I said, it's pretty intense
environment right now,
and it's also, you know, being,
driven by it's complex on the medical side
as well. And so for the first time
in a long time, you know, drug was
kind of the sidecar,
but, you know, you've seen all the Medicare
Advantage,
all the utilization.
You've seen a lot of the challenges with
Medicaid.
And then drug is just
you could in the past, maybe have bailed
some of that out, and now it's just
it's really challenging in drug as well. And
I think it just puts a lot of
pressure on, but we've gotta
stay committed to the membership.
I think there's a lot of value
in good clinical care and education that makes
up for the dollars and the cents. It's
harder to do, takes more resources, and you've
gotta be able to engage.
But I I don't I don't think that's,
I think that's the answer. I think that's,
that's one of the levers that we're gonna
have to develop.
Fantastic.
Really great insights. Cronos,
really appreciate you taking the time to sit
down with us and for sharing your insights
with our listeners. We truly appreciate it. Thank
you, Jacob. If you'd like to listen to
more podcasts from Becker's Health Care, you can
visit beckershospitalreview.com.