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Transcript:
Steve Shain: Hi everyone and welcome back! So now that the big conferences-HIMMS, The NIC and of course ECAP – who can forget ECAP? – are now over, it’s time to get back to work and try to focus on what’s coming up ahead. A few weeks ago, I was at the AJAS conference, so I was speaking to a crowd there and I showed them a picture of this individual and I asked them “Does anyone know who this is?” No one did. I even said his name; his name is Alex Azar “Does anyone know who that is?” and they didn’t. And this is a group of health care providers in the room.No one did, so don’t feel bad if you don’t know either. Mr. Alex Azar is the Health and Human Services Secretary of the Untied States of America. He’s probably the most influential person in the healthcare industry that there is today. A little while ago Mr. Azar got up and he said that he is looking to disrupt healthcare as we know it. He’s looking to make major changes and he’s looking to do them extremely quick.
What is his focus?
Mr. Azar is looking to get the industry to go into the direction of value-based care. Value-based care does not look at how much care or the level of care that you’re giving to a patient, but rather the outcome.
What are you doing to rehabilitate the patient?
That is the focus and with that is a larger focus of lowering the cost of healthcare in this country.
How does he want to do that?
Well first line of business is to focus on the health insurers and the pharmaceutical industry. Until now, these two industries were really two separate things but lately the health insurers have been acquiring some of the companies on the pharmaceutical side. We have CVS Caremark that now merged with Aetna, we have Cigna that just recently announced that they’re buying out Express Scripts. Express Scripts is not really a pharmacy, it’s actually a PBM. A PBM – no, a PBM is not a proud bald man – no PBM is a pharmacy benefits manager. Pharmacy benefits managers were put in place in order to make sure that the drug makers don’t hike up prices too high. They were kind of like policemen to make sure that the prices would be fair.
But now, the insurers have acquired these PBMs. They could police the drug makers but who’s going to police the health insurers for making sure that they don’t hike prices up? Enter this guy. This is Mr. Scott Gottlieb, he is the FDA Commissioner. He got up last week and gave a fiery speech to health insurers, telling them that they cannot get away with anything like this in the future. He said that this is very, very dangerous. From the three largest PBMs that are out there, they are controlling more than two-thirds of the PBM industry right now. And he said that it’s no lie that when you get these PBMs joining with health insurers, that is making the market much less competitive. Much less competitive is making the prices go up and they are putting a stop to it.
What are their goals?
Basically, what they’re looking to do is bring a lot more drugs to the market quicker. So, they’re going to bring generic drugs at a quicker pace. Drugs that usually would have to go through red tape in order to get FDA approval in order to hit the market are going to get a little bit of a faster pace in order to get the market kind of flooded with a lot of medication, a lot of available medication, which will bring the prices down.
So, focusing on that on the pharmaceutical side and on the health insurer side, and on the healthcare provider side, they’re looking for value-based care, focusing on value and outcomes, and not value and…incomes. This is all going on at the same time as we have the three billionaires from Amazon, Berkshire and Chase that have been scheming together trying to give small hints about a huge disruption that they’re going to bring to the healthcare industry as well. We don’t know what it’s going to be, hopefully it’s going to be good. But come to think of it, Mr. Bezos here, he is definitely a PBM if you know what I’m talking about. So only good things can come from those people, so hold on tight we’ll see what happens from these new players that are in the market that are looking to change it. And until next time, thank you so much for watching and of course if you have any comments, questions, please feel free to reach out to me, that way we can make this better for you. Take care.