This episode features an interview with Doug Ramsthel and Jaclyn Rielly of Burnham Benefits. Doug serves as the Executive Vice President and Partner of Employee Benefits, and Jaclyn is the Vice President of the Irvine Office. In this episode, Sasha, Doug, and Jaclyn discuss how the shift in pharmacy is affecting employers and members, the rising trend of GLP-1s, and why covering gene therapy drugs is important.
This episode features an interview with Doug Ramsthel and Jaclyn Rielly of Burnham Benefits. Doug serves as the Executive Vice President and Partner of Employee Benefits, and Jaclyn is the Vice President of the Irvine Office.
In this episode, Sasha, Doug, and Jaclyn discuss how the shift in pharmacy is affecting employers and members, the rising trend of GLP-1s, and why covering gene therapy drugs is important.
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“If I can convert somebody from a drug where I'm getting a $382 rebate to a cheaper drug where my net cost is a lot lower, that's a better benefit strategy. The only way to do that, in my opinion, is to take control as an employer. Self-fund and be able to start hitting these control buttons that will customize the plan, so you're focusing on the right things. Whereas the PBMs could be focusing just on their rebates because they're getting a slice of it. That's how they make their money.” – Doug Ramsthel
“Employers are really starting to get creative when it comes to managing their drug spend, and they have to, while focusing on different financial factors, as well as member behavior, when it comes to controlling costs. As plan costs for prescription drugs increase, member costs typically follow suit, whether it be through increases in cost sharing or premium contributions. With over 70% of office visits and hospital visits involving drug therapy, the rising costs of pharmacy are becoming more and more visible at the member level. I think the biggest shift, though, in pharmacy affecting members today really is that of access and affordability.” – Jaclyn Rielly
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Episode Timestamps:
*(01:13): How the shift in pharmacy is affecting employers and members
*(16:18): Doug discusses his book and obesity treatments
*(19:46): Doug dives into GLP-1s
*(33:08): Jaclyn discusses gene therapy drugs
*(45:50): Jaclyn explains the value-based formulary idea
*(49:40): Final thoughts on gene therapy drugs and GLP-1s
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Links:
Connect with Jaclyn on LinkedIn
Connect with Sasha on LinkedIn
Learn more about Collective Health
Sasha Yamaguchi: Let's face it, healthcare is confusing and costs are continuing to rise. Employers are looking for ways to improve the health of their people and their bottom lines. The good news? Many leading companies are leveraging self funded health plans and innovative benefit solutions to do just that. Learn from some of the best minds in employee health.
Sasha Yamaguchi: Welcome to the Benefits Playbook, Strategies for Self Funded Health Plans. I'm your host, Sasha Yamaguchi, commercial leader at Collective Health. On today's episode, we are joined by Doug Ramsell and Jacqueline Riley from Burnham Benefits. Doug, He serves as the Executive Vice President and Partner of Employee Benefits, and Jacqueline is the Vice President of the Irvine office.
Sasha Yamaguchi: Thank you both for being with us here today. This is our first episode with two guests, so I'm really excited.
Doug Ramsthel: Good to be here.
Jaclyn Rielly: So are we.
Sasha Yamaguchi: Great. So, you've both been in the industry, of course, and I've worked with both of you for a while. I would say, probably one of the most talked about topics in our industry right now is pharmacy.
Sasha Yamaguchi: So, I would love to just start with Let's dive into pharmacy. We're going to talk about many things, but in general, how's the shift in pharmacy affecting employers and members? I would love Jacqueline to start with you on this topic, and then Doug, I would love for you to add on as well.
Jaclyn Rielly: Great, so I think that employers have started taking a more active role in managing their pharmacy costs, given prescription drugs are becoming a lot larger percentage of the overall health plan costs.
Jaclyn Rielly: And we've seen that over the last 10 years, from increases in utilization, which we've seen most recently with GLP 1s. to increasing drug costs driven by the high cost of specialty drugs and the emergence of new gene and cell therapies. Employers are really starting to get creative when it comes to managing their drug spend, and they have to, while focusing on different financial factors as well as member behavior when it comes to controlling costs.
Jaclyn Rielly: As plan costs for prescription drugs increase, member costs typically follow suit, whether it be through increases in cost sharing or premium contributions. With over 70 percent of office visits and hospital visits involving drug therapy, the rising costs of pharmacy are becoming more and more visible at the member level.
Jaclyn Rielly: I think the biggest shift, though, in pharmacy affecting members today really is that of access and affordability.
Sasha Yamaguchi: And Doug, would love for you to add on any thoughts around, from your perspective, the shift in just pharmacy being such a main topic for us.
Doug Ramsthel: Yeah, I actually have the benefit over Jacqueline at being in the industry for a long time.
Doug Ramsthel: And so I've seen quite a few changes actually with pharmacy. For example, like in 1985, when I first started into the business, actually it was 86, the per capita healthcare spend was a lot less than it is now, clearly. In fact, it's gone up 600%. Since 1985 to 2020, when adjusted for inflation. So there's been a huge increase in drugs for a variety of reasons.
Doug Ramsthel: And with that increase in drugs, there's been a lot of scrutiny. I always say, where the money is, that's where it gets all the attention. And that's what you find happening right now with both employers, both the U. S. government. Individuals, right now, 82 percent of adults, according to a Kaiser Family Foundation study, say that they think RX costs are unreasonable.
Doug Ramsthel: And in fact, when you look at RX costs, we've all read these stories, drug costs in the U. S. versus other countries, they're almost three times more expensive. Meanwhile, the PBM industry, Pharmacy Benefit Manager industry. It's very confusing. There's a lot of money flow in a lot of different places, rebates coming back from the drug companies to the PPM.
Doug Ramsthel: Are they getting shared with the employer? Are they getting down to the member level? And with all of that money and increase, there's been a lot more of a grab for profit, should I say, including insurance companies who now are looking at this as a real profit source. So the goal now is. There's a lot of money going here.
Doug Ramsthel: How do we prevent it? How do we be efficient? How do we be smart about how we're spending our money in this area?
Sasha Yamaguchi: Those are all really great points. And I would say the thing I thought of, Doug, as you're saying that and Jacqueline, is pharmacy of all things, medication. And for that many. adults to think it's unaffordable or high cost.
Sasha Yamaguchi: I mean, medicine is some things that people actually really need and they don't have a lot of option, right? They have to take certain things. So having it be so expensive and not being able to control it, I'm sure is really affecting some of the members that need to access this. Let's talk a little bit about, Jaclyn, you touched on a couple of things, but just diving a little bit more into, you know, pharmacy and talk a little bit about what you're seeing, maybe behind the scenes of pharmacy and what we're having to manage as brokers as administrators in our industry.
Jaclyn Rielly: Yeah, definitely. I think it's important to understand that at our core, the healthcare system is structurally inflationary, largely due to provider contract charges and prescription drug pricing. And when we're looking at contracting with providers, those contracts are usually up every two to three years.
Jaclyn Rielly: So, you know, insurers come to the table along with hospitals and providers. And over time, we've just seen, you know, in order to prove bigger and better discounts, inflation take place in that market. And the same thing's happening with prescription drug pricing. And, you know, it's not a surprise that 18 percent of our GDP in the U.S
Jaclyn Rielly: is healthcare, whereas most other developed nations, it's around 11 to 12 percent. With regard to pharmacy, it's widely known that the U. S. pays more for drugs compared to other countries, like Doug mentioned. It's really not surprising though, given that we have the pharma lobby and there's really no central negotiating authority in the U.S.
Jaclyn Rielly: So the government negotiates Medicaid and some drugs, but By and large, most drugs aren't being negotiated by a central authority. So that's problematic. And also, another piece of this is the pharmacy supply chain. So, the lack of transparency with regards to rebates, Discounts and fees flowing from pharmaceutical manufacturers to PBMs has really just become a shell game for employers.
Jaclyn Rielly: For example, Eli and Lily, a pharmaceutical manufacturer, disclosed that their average reduction to list prices is almost 65%. So, as you can imagine, that's a lot of rebates flowing through the system. And let's face it, healthcare business models that have emphasized vertical integration have shown the strongest growth over the past few years.
Jaclyn Rielly: It's not uncommon for insurers and prescription benefit managers to be owned by the same parent company now. Especially given that ACA capped insurance companies profits, whereas PBN profits remained uncapped. And so by capping them with the MLR rule, I think that a lot of health insurance companies became aware of this and shifted their gaze.
Jaclyn Rielly: For example, you have UnitedHealth Group, which owns UnitedHealthcare, the insurance company, and also owns Optum, the PBN. We've also seen CVS. Who owns CVS Caremark, which is a PBN, Purchase Aetna, an insurance company. This is all to say that transparency is super important in this industry, especially given that the three Largest PBMs account for more than 80 percent of the market share in pharmacy.
Sasha Yamaguchi: No, those statistics are amazing. And I think for those listening that don't know how all of this works the way that we do, I actually would love to go back to a point and either Jacqueline or Doug maybe hit on this, maybe share with the audience how that works, right? That list price. And I think the stat that you gave out is the 65 percent, there's a reduction from the list price, maybe talk about how, and it can be very complex to explain, but at a high level, how a drug is priced, how the rebate works, I would love for one of you to just give a very kind of one on one on how that process works for anyone listening that doesn't understand. Because I think that's a really important part.
Doug Ramsthel: You like the good questions, don't you? Yeah. I'll give it a whirl. I will give a caveat to say that anytime I've seen somebody try to explain How the pharmacy benefit management world works.
Doug Ramsthel: It involves a huge whiteboard with a lot of different schematics that end up being confusing. So I'll give it a whirl. Essentially what happens is the PBMs are the third party administrator that for you and I, when we go to swipe our card at the pharmacy, card swiping, that functions through a PBM.
Doug Ramsthel: They're the administrator. And the PBM promises volume to drug manufacturers. And they do that by creating a list of drugs, often called a formulary, and in exchange, the drug manufacturers say, Hey, look, if you give a certain amount of volume to us, we're going to give a rebate. And that rebate goes back to the PBMs.
Doug Ramsthel: The PBMs also can make money by doing what's called spread pricing. So they'll charge more to the insurance company than they'll actually pay to the pharmacist. So there's a lot of ways they can make money. And these rebates then, and this is where it gets tricky, do they come back to the employer 100 percent or not?
Doug Ramsthel: And how much is retained and how much profit is made by the PBM? That's where a lot of the discussion around the PBM industry has happened. Now, What are rebates? Jacqueline mentioned like 65%. I'll give you an idea. I was looking at a proposal this morning that we were working on in our pharmacy benefit consulting practice and the guaranteed rebates per prescription for retail on this deal were 382 a script for a 30 day supply and for specialty 4, 029.
Doug Ramsthel: That's the amount that actually the employer in this instance would get back. So there's a lot of money flow, and with prescription drugs now costing about 22 percent of overall healthcare spend, you can imagine how there's so many interested parties. being involved and try to get the profit.
Sasha Yamaguchi: Thank you Doug for and I thought that was you laid it out very well.
Sasha Yamaguchi: I think what two things why I think that's important for people to listen. One, just knowing that's a part of pharmacy and pharmacy plans. But two, I think this ties to A lot of what we've talked about on this podcast is why employers should also look to go self funded, right? So I assume, and would love for you all to, to confirm this for the audience, a big piece of moving fully insured to self funded is you now get the chance to partake in these rebates, right?
Sasha Yamaguchi: So any employer listening, a broker that has a lot of fully insured business, this is a lever and something that you all as consultants are able to now bring to your employers if they move self funded, correct?
Jaclyn Rielly: Exactly. And it's becoming more and more important to really be able to scrutinize that contract that's in place between the employer and the PBM and make sure that the contract isn't limiting certain or excluding certain drug categories, because it's not really that great if there's a specialty rebate coming back to the company in the word of 4, 000, but they're excluding half of those specialty drugs.
Jaclyn Rielly: So I think that's also really important to be able to take control of those costs and have someone that's looking out for the employer's bottom line. And yeah, that's it. A hundred percent. That's one of the main advantages to moving to, you know, a self-insured platform is being able to now capture those rebates instead of the insurance company.
Doug Ramsthel: True. And just to add to that is not just focusing so much on the rebates that you're not thinking about lowest net cost. If I can convert somebody from a drug where I'm getting a $382 rebate. to a cheaper drug where my net cost is a lot lower. That's a better benefit strategy. And the only way to do that, in my opinion, is to take control as an employer, self fund, and be able to start hitting these control buttons that will customize the plan so you're focusing on the right things.
Doug Ramsthel: Whereas the PBMs could be focusing just on their rebates because they're getting a slice of it. That's how they make their money. So if they're maximizing rebates and not low net costs, that might be at odds with what an employer is concerned about.
Sasha Yamaguchi: I love that. And I, I like this hitting the control button and being able to really know all the different factors of your plan and looking at everything to see where it makes sense.
Sasha Yamaguchi: So that's great.
Jaclyn Rielly: And I think we've seen that, right, through the adoption of bios. Some PBMs adopting biosimilars more rapidly than others, and, you know, the long term effects that will have in the market. Being able to drive to the lowest net cost drugs is extremely imperative, especially removing drugs that are high cost, low value.
Sasha Yamaguchi: High cost, low value, right? So this, I mean, ties straight into what we're really here to get into, which is quite a bit of news. There's news in the pharmacy world, lots going on in our world, in our industry. So I think this is a perfect segue to really talk about how we've discussed GLP 1s, gene therapy drugs.
Sasha Yamaguchi: This is probably the highest percent of conversation we're having right now with clients, right? Doug, I'll start with you. I would love first, just talk a little bit about Burnham and what are you all doing at Burnham? I know that you bring a, an offering, a solution to your clients, but let's start there.
Sasha Yamaguchi: And then I would love to get into how these drugs are affecting our industry.
Doug Ramsthel: Yeah, so Burnham is part of Baldwin Risk Partners. Actually, we just rebranded the Baldwin Group. It is about the 18th largest, 19th largest brokerage firm in the U. S. Burnham, I've been there for about 14 years, and about six years ago, I developed, along with the Uh, some of my colleagues, a pharmacy benefit consulting practice because when I was witnessing this freight train of costs going on, I knew there's something we had to do.
Doug Ramsthel: And so our mission when we formed this was to create more transparency and cost efficiency for employers of all sizes, not just for. mega employers who can cut special deals with pharmacy benefit managers, but all sizes down to a couple hundred lives if they're self funding. So that was really our mission in forming this practice.
Sasha Yamaguchi: So, Doug, one thing you mentioned that I just want to say again for everyone that's listening, all sizes, right? So, years ago, self funded pharmacy solutions, cost efficiencies, a lot of groups or brokers felt that was only for large and jumbo. And I love to always hit on this during the podcast that this is not just for large employers.
Sasha Yamaguchi: It's for any size. So I love that you said that. I know your wife and you created and co wrote a book a couple of years ago. I would love for you to hit on that book for a second, but I feel like it really was ahead of the time too of what's going on this year, right? So mention a little bit about the book and then I would love to get into the obesity treatments that are out there right now that we're all talking about.
Doug Ramsthel: Sure, yeah. So my wife is an obesity board. Certified physician and she's been in weight loss medicine for a long time and her frustration in dealing with the clinical aspects of treating obesity really was the start of this book. And the book then became, well, how is this obesity medicine handled and how is treatment paid for?
Doug Ramsthel: Buy insurance? Maybe. And that's really what this book is about is how was obesity treated in the past? And then in 2013, we really had a watershed moment in the medical industry where the AMA defined in 2013, obesity as a disease. Now, just if you kind of think about that, if I came to you and I said, I've got an issue, I wish I went to the doctor and I'd just been diagnosed with MS, You probably have a lot of sympathy and, my gosh, please take care of yourself.
Doug Ramsthel: Do what's right. Take the right medication. Now, if I was overweight and I came to you in the office and said, hey, I was at the doctor's office and they just diagnosed me with a disease. What is it? It's obesity. Your reaction ordinarily would be very different. I knew that. You, you lack self control and you need to be more disciplined.
Doug Ramsthel: I mean, that's the view that I think traditionally people have had towards obesity. But if you think of it as a disease and put your head in that same frame of mind with any other disease, there's a very different approach that we would take. So in 2013, this began the journey for the medical community, very slow to change, which is we need to start treating it like a disease.
Doug Ramsthel: And the book highlights. How physicians need to be paid for it. For example, you know, 10, 15 years ago, your obesity conversation as a medicine and medical provider was a consult and you got paid 28 bucks for it. So how can we treat a disease when we're not getting paid for it? That's really the, the genesis of the book that we produced and it was out in 2022, but then came a whole social media revolution, right?
Doug Ramsthel: That we're going to talk about, which is the drugs that actually really work to treat. Obesity, and that's the GLP-1s.
Sasha Yamaguchi: So, I, the point you just made, uh, reminds me, I was just talking to Dr. Das from Lyra Health, and we were talking about mental health and substance abuse, and this actually came up of looking at certain Certain things that people are going through as a disease allows it to be treated and given the attention that it deserves.
Sasha Yamaguchi: So I love that you hit on that. And I will say, even as you were saying that, giving that example of somebody walking up in an office, and I even reacted when you gave it, right? So yes, I was diagnosed with obesity and I think anybody's reaction would be like, okay, so go take a walk, right? But it's true. It is a disease.
Sasha Yamaguchi: So, we're going to get into a lot of specifics on drugs that people are hearing every day, but For anyone listening that doesn't know the term GLP 1, I would love to start with, explain what GLP 1s, we all say it in the industry quite a bit, what that is, and then of course I would love to start talking about some of the medications that we're hearing about really every minute of every day lately, so.
Doug Ramsthel: Sure, are getting a lot of attention, 1s, you've certainly heard of Ozempic. But GLP 1s have been around since about 2012 to treat diabetes and GLP 1 stands for Glucagon like peptide and what it is, it replicates a natural producing hormone in your body that it binds with receptor and essentially decreases.
Doug Ramsthel: Your desire to eat food, it basically increases what they call satiety, and it actually, this is where the revolution happens, is it works really well. Unlike any other anti obesity medications before it, it produces a weight loss of 15 to 20%. And so this is truly a watershed moment. And you look at investor magazines like T Bro Price came out with an investor report recently and they said this is the golden age of health care because this true medication actually works and it's creating a ripple impact not only in health care but through the entire economy because of the fact that it does work and it's creating a lot of changes.
Sasha Yamaguchi: It's amazing how often it's talked about and over such a short and quick period of time, I feel like it's just in the news constantly. There's so much we could start with this, but what I would say is, what are you seeing the insurers do? I think we have a member effect, right, where members are wanting to use it and it makes sense and it works for them, but then it's also affecting our industry as a whole.
Sasha Yamaguchi: So I would love to start with just you. What are you seeing employers do in offering these medications to help their employees and being able to either build them in or maybe some employers are excluding them? What are you seeing mostly with your clients?
Doug Ramsthel: It's, it's changing literally almost by the week.
Doug Ramsthel: So whatever I say today will probably be different tomorrow. But let's set a little bit of a foundation of concern of what employers are focusing on. And of course, a lot of it is cost. Now, to set the overall strategy and picture, most employers really want their employees to be healthy. And we do know this.
Doug Ramsthel: Obesity is costly. Generally speaking, if somebody, if we compare a cohort of somebody who's not obese versus a cohort with those that are, it's almost twice. And overall health care costs, the difference. So it's two times more expensive for those who are obese. Now there's a lot of, we've heard them before, comorbid conditions, hypertension, musculoskeletal issues, cardiovascular.
Doug Ramsthel: So the overall goal is let's get people to be healthy and part of that is let's help cure this disease of obesity. So there's motivation for that. Now, the problem is. These drugs, these new drugs, GLP 1s, and there's really two drugs that are specifically approved by the FDA right now for obesity, and that is Wagovi and Zep Bound.
Doug Ramsthel: And those are the versions of another diabetic drug, Ozepic, and Manjaro. Those are approved. If I approve this as an employer and say it makes perfect sense, let's get people healthy, it costs about 1, 400 a month. And 42 percent of your population is going to be eligible for this. So if I open up the door and say, let's go, it's going to be really blowing up my health insurance plan.
Doug Ramsthel: So I really can't afford it. And that's the dilemma that employers are facing. So what I see employers doing is like, please help us. What do we do? We want to do the right thing. But how do we do it? How do we start at this gradually? How do we crawl, walk, run? And that's further complicated by this. That there's various studies that show even if people are given this medication at no cost, most of them don't complete their therapeutic dose.
Doug Ramsthel: There was just a report that came out from Blue Health Intelligence, which is the Research arm of Blue Cross Blue Shield, and it said that 30 percent of individuals drop treatment of GLP 1s after the first four weeks. It takes 12 weeks minimum for there to be a clinical value of these drugs. 58 percent of those on the treatment plan actually dropped before the 12 weeks.
Doug Ramsthel: So, if I do this, and people don't finish their course of treatment, it is literally money down the drain. And this is a little bit of the dilemma that employers are facing. Want to do the right thing? How do I do it? Without blowing up the bank.
Sasha Yamaguchi: Wow. No, that's really fascinating. I would say, well, a couple questions, but that was my first thought, as you were saying, the four and 12 weeks of how many employees are like, Oh my God, I'm going to try it.
Sasha Yamaguchi: Miracle drug. Four weeks in, 12 weeks in, they stop. They've already spent 1, 400 a month. It's hitting the plan. And then they're not even better, right? Their health isn't better. Why are so many people of those statistics not going past the four weeks? Is it the side effects? Is it Just curious if you have statistics on, like, what is the main reason they're not going past the 12 weeks, really?
Doug Ramsthel: Well I think, and this Blue Health Intelligence report actually supports this, that it's being partnered. with the right health care provider who's an expert in obesity medicine. Now, remember I said obesity was classified as a disease pretty recently in the health care world, which is 2013. And so there's not that many medical professionals that are really good at treating obesity.
Doug Ramsthel: Here's something that, that shows this. Obesity board certified physicians. There's only 8, 200 in all of U. S. and Canada. But there's over 975, 000 board certified physicians. That's the gap that we have. And so the study on Blue Health Intelligence Report said that even though people dropped, if they had regular visits to a healthcare provider, And they were seeing a provider who was an expert in obesity medicine that improved dramatically their likelihood of completing the 12 weeks.
Sasha Yamaguchi: Now that makes sense and I was going to ask that as a question as well of I feel like a lot of people are using these medications but not even seeing a physician at all really. I mean you can go into some medical clinics and get it pretty easily where you're not having a full on doctor visit. So, Back to your original point of it being a disease, of why you're seeking out these medications, if you're not talking to a physician at the same time.
Sasha Yamaguchi: And most likely they're not saying, you need 12 weeks for this to work, right? It reminds me of mental health medication of, people will take it for a week or two, I don't feel better, I need something different. Well, it probably, it takes a while, and if you're not being told that, people are doing it four weeks, five weeks, and then giving up because they're not seeing a doctor, I would assume.
Doug Ramsthel: Yeah, and changing behavior is hard, isn't it? And I think we all know what we need to do, but do we always do it, right? I can think of many things in my own life that's like that, and I think that's, Really at the core of a lot of this, it's very complex. And here's another point I want to make, is while we've seen a huge increase in expense in these drugs, even for those employers who said, I don't want to cover it for weight loss, which is about half of them right now, we've still seen these drug expenses go from 3 percent of drug spend So it's still happening and there's a lot of reasons for that we can talk about, including prior authorizations, which are intended to restrict the use of drugs.
Doug Ramsthel: Don't work that well. Well, we also know, and I think there's a tsunami coming up of expense, is that right now these drugs are, there's a national shortage and the FDA will turn a blind eye to patent enforcement when there's a shortage. National shortage of what's deemed essential medications. And because these treat diabetes, they're considered essential medications.
Doug Ramsthel: So what's happened? You have now this whole underground economy of compounded medications, semaglutide, terzapatide. There's stories of how people. Going in to the gym and the gym trainer saying, Hey, do you want some semi glutide? They're calling it Ozempic because that's what everybody calls it, but it's a compound version of it and it costs 250 versus 1, 400.
Doug Ramsthel: That's not showing up on anyone's radar. That's not showing up in our claims data. So what we're seeing as this big spike, we haven't even seen all of it yet because the moment this shortage gets cured, The FDA will start enforcing patents, and it'll go back into the regular channel, and it'll be back on the health plan.
Doug Ramsthel: So, we're just seeing the tip of the iceberg, in my opinion.
Sasha Yamaguchi: Wow. No, this is all fascinating, and I'm learning so much from you on some of this. The patent is really interesting. One final question on this, I'm sure there will be others that come up, but for the most part, how long does somebody stay on a GLP 1 when they're treating obesity?
Sasha Yamaguchi: Versus diabetes, out of curiosity and not, I'm just curious, how many of these members on the plan are going to do it for X number of months or years, and then what happens when they stop?
Doug Ramsthel: Great question, and this is at a lot of conversation around how to use this drug. If you talk to Novo Nordisk, they're the maker of Ozempic and Mugove, they're going to tell you this is a chronic disease, obesity, and this is a forever drug.
Doug Ramsthel: You tell me, do you want to take a drug forever, if you can help it?
Sasha Yamaguchi: Right.
Doug Ramsthel: I don't, and so I think that's why people are like, wait, how long do I have to take this? And they're trying to answer the questions themselves and maybe that's why they're dropping. Now for diabetes, it's different because your body actually is producing less insulin and you kind of need it for life.
Doug Ramsthel: If you're diabetic, if you have diabetes for obesity, though. Let's think about it a little bit different. So generally speaking, most studies have gone and said, let's look what happens when people take it for a year. And I think even my wife would say, that's probably what you want is about a year worth of dosage.
Doug Ramsthel: Now, if it's not coupled with a treatment program or an exercise program, people will gain it right back. And maybe even then some. And when people lose weight without exercising, they might be losing muscle mass too. So the weight that they're losing may not be entirely healthy weight. And so this is why employers are concerned because they're saying, I can do a whole year's worth.
Doug Ramsthel: They can do their 12 weeks. We can do a whole year. And then if they just roll off of it, then they gain it all back, then what? We're back to, you know, dieting, which we're all familiar with, right? And that's not healthy at all. And so, our goal in working with employers is to customize a design and a program that brings into all facets
Doug Ramsthel: of this being a healthy long term solution. And we just ask the question, is this the solution or a tool? It's a tool and it needs to be coupled with exercise particularly. Nutrition, and there needs to be accountability, learning the long term habit change so that you can titrate off, taper off, and have long term success.
Doug Ramsthel: And that doesn't really exist in the marketplace yet, but we're really close to building it and tweaking it.
Sasha Yamaguchi: So many thoughts. One, I'm thinking of an employer's plan of whatever percent of employees doing a full year of this. And then going right back to how they were or worse, and all that cost has hit the plan, and then it's just this cycle.
Sasha Yamaguchi: And then to your point just now, Doug, I mean, to me, this could be a huge need right now in our industry of a company really helping with what we did years ago of engagement and wellness programs around obesity because people are using these drugs and how can we help them keep that long term weight loss.
Sasha Yamaguchi: So. Really fascinating, all of it.
Doug Ramsthel: There really is, and it's fun to watch because it's changing so fast, and it's fun to talk about, so there's just a lot here, and stay tuned, next week will probably be different.
Sasha Yamaguchi: It'll be different. It's changing daily and quickly. So, Jaclyn, switching tracks for a bit, but another big part of pharmacy, and what we're talking to employers about every day, right?
Sasha Yamaguchi: is gene therapy drugs. So similar to how Doug talked about GLP 1s, what is a gene therapy drug? And then of course, we'd love to get into what you're doing around that as well.
Jaclyn Rielly: Definitely. So broadly speaking, there are really expensive drugs on the market, new to the market. Starting off in 2017, the first gene therapy was released called Luxterna.
Jaclyn Rielly: It cost about 425, 000. per eye for treatment of retinal dystrophy. Since then, we've seen gene therapies come to the market in the millions of dollars range. Most recently, there's a gene therapy on the market for 4. 25 million dollars. So really expensive. And the FDA described cell therapy as the transfer of cells from one person to another or from the same person.
Jaclyn Rielly: In gene therapy, is the transfer of genes into cells to correct or replace a defective gene or even turn off genes that are causing problems. So while these therapies help to treat or even cure underlying genetic disorders, some gene therapies have actually shown better outcomes than others. Some are one time treatments while there are other therapies indicated for continuous use.
Jaclyn Rielly: And most gene therapies that are in the pipeline and coming to market are really focused on treating rare conditions or cancers. Given the lack of patients for these conditions, something that I find really interesting is that the allow allows for these therapies to receive an orphan status. So that allows for a faster approval process.
Jaclyn Rielly: So we're going to see a lot of these gene therapies. that are treating rare conditions coming to the market in the next five years because of that shorter approval process. Mind you, there are gene and cell therapies out there that are going to treat common diseases too. It's just going to be a little bit more time for those to come to market.
Jaclyn Rielly: And so since we've seen, you know, huge gene therapies come to market in the millions of dollars range, you know, it can be concerning for employers. But it's also an amazing innovation with these therapies treating diseases such as spinal muscular atrophy or hemophilia, sickle cell disease, and Duchenne muscular dystrophy.
Sasha Yamaguchi: And from the topic we were just talking about to this, and Doug, I think this goes to your point about disease, Jaclyn, as you're sharing all of this, I'm like, oh my gosh. rare cancers and these treatments of, uh, we should spend every penny. So I just, I think that's an interesting reaction to what we were talking about where we can help an entire population.
Sasha Yamaguchi: And then there's this where, yes, the dollars are, I mean, 4. 25 million is insane, but it's like, oh, but if it treats something really important, I just, I wonder if a lot of people react that way, right? Is that a natural reaction? It just is my, you know, being honest, how I was reacting as you were saying that.
Doug Ramsthel: Yeah, it is for me.
Jaclyn Rielly: Especially because a lot of these gene therapies treat children. So, there are really life saving and life altering therapies.
Sasha Yamaguchi: Right. But Doug, would you say what we just talked about is also life changing in life? It just, it's interesting how it ties from a really high end cost medication with very rare conditions to what we just talked about around.
Sasha Yamaguchi: a little more affordable and something that's an everyday condition and disease. I just think that's a really fascinating tie in.
Doug Ramsthel: Well, welcome to the healthcare dilemma, right? If we got something that can help someone, even if it's one person, and we know that person particularly, We better get coverage for it, and yet we can't do that, can we?
Doug Ramsthel: This is a little bit of why health care is expensive in the United States. It's probably one of the reasons why we're at the vanguard of developing these new procedures, because we have a higher likelihood, probably, of these getting initially covered than other countries where there's, you know, regulated medical care or it's all provided by the government.
Doug Ramsthel: So it's a tough. It's a tough dilemma.
Sasha Yamaguchi: Yeah, no, fascinating. So Jaclyn, on the gene therapy, you talked about a couple of different conditions, but as you're meeting with your clients, your employers, obviously the numbers you threw out are quite large, especially for a self funded employer who's funding their plan.
Sasha Yamaguchi: How are you talking to employers about these, about covering them, how it works for their members? I assume this is a huge topic. Since it started a couple of years ago, but What are your conversations like with these employers?
Jaclyn Rielly: Yeah, definitely. So I think this becomes more important when we're looking at smaller self funded employers too, right?
Jaclyn Rielly: And historically and still right now, stop loss does provide for protection for these high cost claimants. There's also a lot of insurers out there that are continuing to cover these drugs, so we're not seeing broad exclusions hit the market at this, at this point. So I think really for most employers that are much larger, this isn't as much of a cause for concern at this point as higher increases in utilization with GLP 1s, so to speak.
Jaclyn Rielly: So Right. So, but for employers that are smaller, let's say 200 lives, 500 lives, if they get hit with a 2 million gene therapy claim and it's ongoing, that's significant cause for concern for the affordability of the plan. And so being able to opt into certain pools and carved out risk pools that they're offering.
Jaclyn Rielly: for coverage for some of these gene therapies on a per member, per month basis could be feasible and something that smaller employers are really starting to be more interested in. I think it's also important to take into consideration value based formularies when we're looking at these drugs. Because not all of these gene therapies are made equally, the efficacy and durability of these drugs is definitely something to be taken into consideration when putting these drugs on your formulary.
Jaclyn Rielly: So while there's only 37 cell and gene therapies that have been approved by the FDA to date, That number is changing rapidly. There's about 10 going to be approved every year now for the foreseeable future. And so we have to start looking at this and taking a holistic approach to it because these drugs are amazing too.
Jaclyn Rielly: Some of these drugs do set set off future claims costs, right? And so, if some of these are curative, it's really important to have these drugs and cover these drugs. And there's also a lot of risk. and implications to not covering these drugs for employers, right? You can face a lot of scrutiny because, like I mentioned earlier, a lot of these drugs are actually for adolescents.
Jaclyn Rielly: So when we're looking at that, and we're looking at the durability of these drugs, and the fact that they can change people's lives, it becomes It's more of a moral and ethical dilemma more than anything. So there's a lot of different like concerns that employers are having and mainly to do with affordability around these drugs and mainly smaller employers that are self funded whereas insurers.
Jaclyn Rielly: are covering these drugs. There's a lot of restrictions on these drugs, and unfortunately, Medicaid actually is more restrictive when it comes to gene therapies. So if your employer's not covering it, it's going to be just as hard to kind of find it outside of your health plan, unfortunately.
Doug Ramsthel: I recently ran into an issue, actually, on this whole thing came from the center.
Doug Ramsthel: It's rare. And it's right. Jacqueline's like, this is rare, but they're becoming more prevalent. So this kind of comes back to how we look at insurance. You insure for the unknowns, you budget for the knowns, right? So if this is rare, and it's going to be a big expense, that feels a little bit like a specific stop loss, but an extra add on the specific stop loss.
Doug Ramsthel: And so what we're finding is. There's now more stop loss carriers who give you a bit of a rider that you can get for this. Or maybe there's even another insurance company that can come on and say, for 5, and Jacqueline made this point, 5 per employee per month, we're going to be able to get this rider that covers and carves out these things.
Doug Ramsthel: And if we spread it over a lot of numbers, then it's much more manageable. And I think this is what I'm starting to see in the marketplace just recently. I had a 4, 000 employer group, self funded, and because we use a lot of data in our managing of the plan, we knew that there was somebody who was a hemophiliac.
Doug Ramsthel: So did the TPA, so did the stop loss, but somehow, by a miracle of God, they offered me a rider where I got it for like 4. 50 to carve out these. Gene therapies, and they're probably going to end up taking hemogenics, which is like three and a half million. So that's, I see how the market's starting to respond.
Doug Ramsthel: Now, here's what I would coach to anybody who's consulting with health plans. Don't think it can't happen to you. Be proactive. Be preemptive. Get the writer now while you can and don't wait. Because otherwise, you're going to have a stop loss dilemma, you're going to have some lasers, and you're going to be stuck with a large claim.
Jaclyn Rielly: Yeah, and to Doug's point, what's Super important is these programs, if you already have a claim or a pending claim, they're not going to be covered under these carve out programs. So it's really important that you get ahead of this risk. Instead of behind it. And with a lot of employers being hesitant to cover these drugs, sometimes that eases the burden of covering these drugs, right?
Jaclyn Rielly: It makes it a little bit more feasible, especially for smaller employers.
Sasha Yamaguchi: That is exactly what I was just thinking as y'all were talking is if I'm an employer right now, I would look into the rider so that when I have a member come to me or when I'm looking at my annual plan and I want to make sure somebody with this, especially an adolescent, needs this drug, that I feel more comfortable covering it, right, as an employer.
Sasha Yamaguchi: So it's almost like we just backed into what's the first step as an employer? Look into a writer so that you can cover this, if it makes sense. Because I would say if a member doesn't have coverage for it, what happens, right? And I assume it's, they just can't obtain it with any coverage.
Jaclyn Rielly: So there's alternate routes, right?
Jaclyn Rielly: So they can, there's PAP programs that they can look into, where in essence, pharmaceutical manufacturers allow for people that don't make a certain amount of money, access to these drugs and things of that nature. But by and large. It's going to be really hard for them to get a hold of these drugs and like I was saying, Medicaid, they're even more restrictive than a lot of commercial health plans.
Jaclyn Rielly: And so, so it becomes the challenge.
Sasha Yamaguchi: No, and it sounds like this is something employers, no matter what, should start talking about, thinking about. It reminds me years ago of when the hepatitis C drugs came out, right? It was a large cost. And employers were worried, but it saved lives at the end of the day.
Sasha Yamaguchi: So it could make a huge difference, even though some of these dollars are very large upfront. Jacqueline, one thing you mentioned, I'd love to go back again for those listening, do you mind talking a minute about the value based formulary idea and what does that look like for an employer? And just so that as they hear you talk about it, maybe it's something they look into for their plan next year.
Jaclyn Rielly: Yeah, definitely. I think that right now there's such high ticket drugs. Prices, right? And when we actually look into the efficacy and the durability of some of these drugs, you got to weigh the cost versus the benefit. And so being able to look at these drugs and measure the value of these drugs over time is so important.
Jaclyn Rielly: It's going to become increasingly important, especially when a lot of these drugs, they've only been in clinical trials or measured for 18 months or less. So that speaks to the durability. And a lot of employers are hesitant because whether, you know, turnover is a concern for them, like with Harvoni, right?
Jaclyn Rielly: It's great. Uh, one time treatment, and a lot of folks end up being cured from it. So, but what if they end up leaving that plan, and then the employer's left with those costs and that burden? So, that's also a concern, and adverse selection also plays a role in this, because if you're the only one covering gene therapies, then people are going to start to flock to your plan.
Jaclyn Rielly: It just is what it is. And so when we're looking at value based formularies, I think those approaches are going to be more and more fruitful with more data. And I think that's really what's behind it is designing your formulary to produce the best outcomes. based off of cost versus benefit analysis. And I think something that's interesting as well is when we're looking at excluding drugs and, and gene therapies or even specialty drugs for that, for that reason, it's, it's important to understand So, you have to, as a self funded health plan, benchmark, in essence, your formulary to a benchmark state.
Jaclyn Rielly: And I know Utah is one of the most lenient benchmark states. And so, with that, you have to cover a certain amount of drugs in every therapeutic class and category. And so, when we start taking out drugs, it's really important to take a real look at your formulary because, hey, if we remove one drug, is that going to have a negative effect on the medical side?
Jaclyn Rielly: And so, it's really important to ensure value based drugs are on your formulary.
Sasha Yamaguchi: Wow, as you're talking through this, our industry could not be more complex now, right? This is amazing. I'm just thinking how much the employers have to think about, right? And how important what you two do is to help them build the right formulary, not exclude too many drugs, have the right drugs.
Sasha Yamaguchi: So thank you for going through that because I think it's very educational for anyone listening. And by the way, data, you hit on data, right? Like, How important more than ever data is in everything that we do every day.
Jaclyn Rielly: I mean, yeah, there's different authorities with regards to collecting data on pharmacy, but I think the stronger the data we have and the longer term data we have, the better off everyone will be.
Sasha Yamaguchi: Yeah, agreed. More data is always helpful in our world. I feel like we covered so much on both gene therapy. and GLP 1s. But for anyone listening, a broker, an employer, was there anything we didn't cover that you would want to share as people are listening and trying to learn more and more about these topics?
Jaclyn Rielly: I just think that if you're an employer and you're trying to not cover gene therapies, there is a significant risk to your plan too. And especially if you're trying to because you've been hit with a huge claim, you know, if you carve those out, exclude those drugs, whatever you do, mid plan year or in the beginning of the next plan year, it's important to be aware that could be a risk, like a HIPAA violation risk.
Jaclyn Rielly: And so I just think that You need to really take a serious look at your health plan costs. These drugs aren't coming up super frequently, but Doug's seen it. I have seen it with employers health plans. I've seen those 2 million gene therapy drugs hit. And when it does, and you're not prepared for it, it's really difficult.
Jaclyn Rielly: And if you're fully insured and that hits too, it becomes even more problematic, right? So, because then you're just on that insurance roller coaster and there's not really many controls that you have to take matters into your own hands. And then at the end of the day, do you really want to take matters into your own hands if this is a moral and ethical issue?
Jaclyn Rielly: So, it, It becomes a little bit of a back and forth there. And so, I think having a strategic approach and really planning for it is really important for employers.
Sasha Yamaguchi: Well said. Doug, anything on the GLP 1s? Again, employers listening, brokers listening?
Doug Ramsthel: Got another hour? I'm just kidding.
Sasha Yamaguchi: I know, right?
Doug Ramsthel: It's a big topic, but here, here's what I, I never like when I hear these things is like, Oh man, it sounds, this is rough.
Doug Ramsthel: Oh no, this is awful. There's a lot of good news here. There's a lot of good news with this one. It's fun to watch. Here's the good news. Employers are now asking. What should I do with obesity? Whether they want to cover this drug or not, they're asking more constructively than ever before. How can I help my employees with obesity?
Doug Ramsthel: Before, it just sat in a wellness program and you hope you tracked your steps. Now it's actually part of the overall health of the individual. That is super positive news, and in the long run, I think it's going to help us all and will help reduce expenses. Second positive, employers also are now going to have a medical community that's way more well informed and way more engaged.
Doug Ramsthel: It'll take some time, but just last year alone, the increase in the amount of physicians that wanted to be obesity board certified went up 88 percent. More doctors are going to these things and saying, I need to know things. That's going to be great because this newly classified disease, is going to have more horsepower around how to deal with it.
Doug Ramsthel: And guess what? We all deal with it.
Sasha Yamaguchi: Right?
Doug Ramsthel: We have 40, we say 42 percent are obese, but don't we all think about our weight? I got on the scale this morning. So, you know, it's there.
Sasha Yamaguchi: No, I, one, I love that, that we ended on a positive note on both topics of how to help. Employers and help people and members.
Sasha Yamaguchi: And I agree no, no matter anyone's thinking about it on a daily basis. Right. And I love that. I actually, when we first started, I thought if I'm getting into the medical field, that's probably what I'm getting into right now is to be a physician to help on that because it's definitely needed for sure. So we covered so much.
Sasha Yamaguchi: I think we could do another hour on these topics. But I feel like we brought a lot of great information to anybody listening that's hearing about both of these in the news every day, in our industry every day. And even those that aren't in our industry are talking about it. So thank you both so much. I think we need to have a follow up, especially in a couple months to see how it's changed, because in just three months, it'll be a whole nother world again.
Sasha Yamaguchi: So, and I love, Doug, your point about everybody is now looking in the employer world of how to help members around obesity and wellness, in addition to just checking steps, but real programs, which I think is going to help everyone, so. Yeah. Thank you both. Please, for a second, let everyone know how to reach you, LinkedIn, Jaclyn, I'll start with you.
Sasha Yamaguchi: But if you want to share, you know, if anyone has questions or wants to look into more information or either of you, Jaclyn, start and then I'll let Doug share as well.
Jaclyn Rielly: Yeah, please find me on LinkedIn. My name is Jaclyn Rielly and feel free to send me an email as well. Just first in dot last at BurnhamBenefits.com.
Doug Ramsthel: I'm also on LinkedIn. You can reach me there. And I'm also frequently posting things about, guess what? Weight loss medications, GLP 1s, so you'll see a bunch of stuff there that you can hopefully benefit from. And then of course, email at doug.ramsthel at BurnhamBenefits.com.
Sasha Yamaguchi: Perfect. Thank you both so much.
Producer: This podcast is brought to you by Collective Health, a health benefit solution that guides employees toward healthier lives and companies toward healthier bottom lines. Check us out at CollectiveHealth.com.