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Established in 2004, Leader’s Edge is the award-winning content platform for The Council of Insurance Agents & Brokers, covering legal and legislative issues, international business and regulation, management trends and best practices, technology, and more. Leader’s Edge is written and recorded for large and mid-sized commercial insurance and employee benefit executives around the globe.
To solve for that disconnect, you know, I think we must start understanding the client. Where do they stand in terms of tolerance with regards to plan spend? Right? Let but let's face it. It's our job to help peel back the onion a bit, peel back the layers of the onion, and and to see which way do they lean.
Katie King:Welcome to the Leader's Edge podcast. I'm Katie King, VP of Health Policy and Strategy at the council. In this podcast, I sit down with doctor Simon Leung, vice president and head of pharmacy at Conner Strong and Buckelew, to talk about how his past experience as a PharmD informs his new role as well as his take on the value of transparency in the pharmacy benefit space. Doctor. Leung sits in a unique position where he's been behind the curtain with major health insurers, transparent PBMs, with patients at the pharmacy counter, and now in the consulting space.
Katie King:He believes that all of the different industry players agree that it's about serving the patient, but that people have different views on how to achieve that goal. Take a listen.
Dr. Simon Leung:Yeah. I I have, 20 years in the pharmacy, industry experience. You know, just I actually just thinking about it last night, it's almost 20 years to the date because I remember specifically, you know, taking my pharmacy board exams and, getting officially licensed the day before my birthday, 20 years ago. And I just celebrated my birthday yesterday. So almost to the date that, 20 years in the industry as a registered pharmacist working across, you know, many rounds of the industry, working as a retail and specialty pharmacy leader.
Dr. Simon Leung:And then after that, I decided to branch out and and go into other aspects of pharmacy. You know, now that I have experience in everything working for health plans, PBMs, both large and small ones, new and old ones, you know, as well as pharmacy consulting. And now here at Conner Strong, I take great pride in in being able to, you know, bring all that expertise and and experience together to help our clients here design impactful and and, you know, meaningful pharmacy programs that improve not only their employees' health, but, you know, ultimately to help mitigate cause whenever possible. I will say, however, that, I I think my collective experience is somewhat unique in in, this marketplace. You know, I can appreciate and understand all sides of of a typical pharmacy or prescription drug transaction.
Dr. Simon Leung:Right? That the provider, the payer, as well as the member or or patient side. You know, having that retail experience, behind the bench, working behind the bench. I know what it's like, for members to be told their medicine isn't covered or that their prescription needs a prior authorization. Or even, you know, working through a change in their insurance, at the beginning of the year.
Dr. Simon Leung:You know? You you have a mom and dad coming in New Year's Day with a sick child, and and they can't get their prescription to get covered, you know, because they didn't realize or they forgot that they got a new prescription insurance card in the mail. I've helped, you know, members work through these firsthand. So, you know, at the same time, I also know what it's like on the pharmacy consulting side to help businesses craft their pharmacy benefit plans to drive plan savings. So, again, I could truly appreciate and and understand the balance that's needed there.
Dr. Simon Leung:And, ultimately, though, the member experience is what drives member benefits. And and my prior experience with the members, the consumers themselves, isn't all that common in in the pharmacy benefit advisor space.
Katie King:Yeah. That absolutely is a really unique place that you sit just given your experience. And, obviously, prescription drug costs are continuing to rise, and patients feel that. They feel that at the pharmacy counter. And and it's felt differently, you know, among employers or if you're a a pharmacy consultant or if you're some other player in the industry.
Katie King:But I'm curious, just given given your experience and and the fact that you've spent time with different segments in the industry, maybe you can talk a little bit about some of the the disconnects or maybe some of the miscommunication that you see happening between all those different players and and sort of what that means?
Dr. Simon Leung:Yeah. It's a great question. And, you know, I I have to think back to when I first moved into the pharmacy consulting space. A a former mentor of mine, affectionately called me a reformed bank robber. Right?
Dr. Simon Leung:Because I was able to bring that knowledge, the insights, the experience gained from the inner workings of PBMs and carriers to the client's side of the table. Right? And and all the while, again, having intimate knowledge and experience working on the front lines with patients at the point of service. Having seen all sides, I I realized, one thing that is, while there are certainly disconnects amongst all these parties, every player is connected by the universal understanding that the most important part of pharmacy and and benefit plans in general is taking care of that patient's health. Right?
Dr. Simon Leung:What what everyone fights over and and truly is at odds about, however, is how to get to that outcome while making sure the financials make the most sense for their own interest. Not necessarily for everyone's interest, but for their own interest. And and I really feel that to solve for that disconnect, you know, I think we must start understanding the client. Right? Start there.
Dr. Simon Leung:We have to understand the client, the company's philosophy. Where do they stand in terms of tolerance with regards to plan spend? Right? Let but let's face it. It it's likely increasing and putting financial pressure on the business.
Dr. Simon Leung:And then you have to balance that with tolerance to member disruption. Do they want to cut cost by any means? Or or are they, you know, truly trying to build the richest plan to attract and retain top talent, especially in this competitive workforce? Needless to say, though, right, most clients out there are probably somewhere in the middle, which which is okay. But it's our job to help peel back the onion a bit, peel back the layers of the onion, and to see which way do they lean.
Dr. Simon Leung:And then, you know, from there, we once we understand the baseline that we're working with for each individual client that we're working with, us as benefit advisers pharmacy benefit advisers, we can better help them tailor their solutions to achieve their goals.
Katie King:That makes sense, Simon. I'm curious. So now sitting at a brokerage and a consultancy, how do how do they have different levers to try to move the dial on pharmacy costs? And they're they're sitting in a also unique position just between the client and some of their other partners. So so what do you see as an advantage to kinda where they're sitting?
Dr. Simon Leung:Yeah. You know, generally speaking, I don't think it's necessarily about, you know, brokers and consultants having or not having access to things, but it's more about understanding how to navigate and how to help their clients navigate all these different levers that are out there to help manage cost. Right? It it again, going back to my earlier point, it all starts with understanding the client's strategic goals. But that said, there are some exceptions, and and one of which, off the top of my head, would be, you know, those proprietary pharmacy coalitions.
Dr. Simon Leung:Some brokers have access to, some don't. But in the world of pharmacy benefits, size and scale does matter. And that's how these, quote, unquote, aggregator models, these collaborative models add value. Here here at Conner Strong, we we do have access to a proprietary pharmacy coalition called Level Health or Level Care Pharmacy. We offer this coalition to our clients, but most notably, and I wanna call this out specifically, is that we don't own or operate it or even administrate for that matter.
Dr. Simon Leung:Right? Counterstrong, we we simply help manage it from a pharmacy consulting standpoint and help market it, but that's it. And what this means ultimately is that we're product and vendor agnostic unlike some of our bigger competitors in the marketplace. We don't benefit from, you know, from clients using it as a company. We we since we began offering Level Health Pharmacy Coalition, it has cumulatively saved upwards of $2,800,000,000 with a b for our clients that have decided to use this Pharmacy Coalition program.
Dr. Simon Leung:So going back to my point about Pharmacy Coalition is that we consider these low hanging fruit, right, for clients. They're they're particularly beneficial for clients who are otherwise too small to go out into open marketplace and get best price during competitive pricing. Again, size and scale does matter in this industry. And and by joining a coalition, these clients can gain access to competitive pricing. That said, some coalitions are indeed proprietary and can only be accessed through a specific broker or consult relationship.
Dr. Simon Leung:But many are broker and consult agnostic, meaning, theoretically, a self funded plan could access these directly with or without a broker relationship or a broker or consultant relationship. When I think more aggressively, right, there there are aggressive levers that that require more careful evaluation, more careful navigation, and just being more judicious in the vetting process and decision making process. The one that comes to mind would be those patient assistance programs that are out there. Right? They they present more hurdles for clients and more hoops to jump through for for the members, But they can lead to significant savings.
Dr. Simon Leung:Many clients and their members aren't even aware that these patient assistance programs are out there and or if they're built into their plan design. But they can, at the end of the day, greatly benefit members by helping apply savings and financial assistance from the drug manufacturers. And and the key is creating a successful and effective communication strategy around the existence of these programs so that members can leverage these programs to generate, again, savings not only for the member, but also the plan. Another lever that I I think of, when I when I think about these cost mitigation strategies that's quite aggressive, but not quite they've they've been around for a while, but not as frequently deployed, is using pharmacies that are international or or what we call drug importation programs, either directly or indirectly through their benefits plan. Right?
Dr. Simon Leung:There there are more and more vendors that are administering these types of programs, but it is critical that clients understand the pros, the con, and the risks of these very aggressive solutions. Would I generally recommend this for my clients? Absolutely not. No. But but could they be a viable solution for for clients who are, you know, ultimately faced with rising health care spend that is acting as an accidental existential threat to their business?
Dr. Simon Leung:Possibly. Right? I I I wouldn't be doing my job if I didn't bring all viable solutions to the table. So it it's also my job to help vet those solutions, weigh all the pros, cons, risks, and help my clients, again, make the most informed decision.
Katie King:I think it's interesting that you brought up how effective a communication strategy could be here. And in some ways, it's a it's a little bit of a basic idea to say that people don't necessarily know all of the benefits that they have access to. But do you do you see that happening sort of widespread with different types of clients that it's really just that they're not targeting certain employees or classes of employees who could really benefit from, you know, patient assistance programs or things like that?
Dr. Simon Leung:Yeah. Absolutely. You know, when you think about how complicated health care benefits is in general and and how, convoluted the process is, how many different vendors that are out there, there there's a term, you know, vendor exhaustion or or, you know, just just a saturation of vendors out in the marketplace. So I think a communication strategy that targets members and helps them truly understand their benefit plan is is key to, not only making these solutions effective, but also helping that member navigate and making it less stressful for them. Right?
Dr. Simon Leung:These members are already dealing with, obviously, some type of health condition that they're trying to treat with medication. And the last thing they need to do is be stressed out stressed out about the process of how to get that medication. So an effective communication strategy that the the client puts out there with the help of their broker consultant or even the vendor themselves is is critical to to success of these programs.
Katie King:Mhmm. Let me switch gears now. I wanna talk about kind of the theme of transparency, and that's in the pharmacy space. That's obviously a word that you hear a lot, but it means different things to different people. So there's a lot of new transparency data available.
Katie King:So there's mandated prescription drug reporting to HHS. There's transparency and coverage data, you know, machine readable files that detail in network negotiated rates. Do you or or have you used this type of data in any way to help inform your client strategy?
Dr. Simon Leung:You know what? Kinda strong here. We we certainly use data all the time when when informing client strategy. But, you know, in my opinion, because these new transparency datasets are are so fresh, I I truly believe there there are a lot of kings that do need to be worked out, of not only, you know, the the collection process, but also the reporting process, so the methodology behind all that. And because of that, you know, we we currently rely most heavily on any given client's historical data to inform strategy.
Dr. Simon Leung:This provides us, you know, with micro level detail and insights so that we can view it as more valuable, than than any kind of current national data that's currently out there. It also allows us to take a deeper dive into an existing client's data to help inform solutions that are either client specific or at least more aligned with the client specific industry or like minded peers. That being said, that there's certainly a place for nationwide benchmarks to increase transparency. But I I really think, I really do think that there's still a lot of work to be done, for that data to be fully representative at a macro or nationwide level. So to my earlier point, more importantly, you know, you have to get down to that micro or individual client level.
Dr. Simon Leung:Perfect example for instance would be when you talk about NADAC. Right? If you've heard of that national ag that national average drug acquisition cost data. It is publicly available. It's collected and published by CMS.
Dr. Simon Leung:The most important piece here is to understand that the data is collected by surveying, you know, thousands of retail community pharmacies. We all saw earlier this year, I think it was in April, when when the dataset, noticed this huge shift, in in the data because a large chain started or stopped reporting. So the the methodology of data collection, if it's modified just a little bit, the data itself can be turned on its head. So, you know, yeah. Unfortunately, a good benchmark, simply doesn't exist yet.
Dr. Simon Leung:But I do agree, that if or when it does, this type of data will be very valuable to to not only plan sponsors, but also us consultants.
Katie King:There have been 2 lawsuits at this point focused on fiduciary responsibility on health and benefits side of the business. Johnson and Johnson and Wells Fargo are the employers who have been named, and the plaintiffs claim that the company's group benefit plan fiduciaries breached their duties in selecting the plan's PBM because they relied on a biased consultant to do that, and they failed to negotiate more reasonable contract terms with that PBM. In the J and J case, they rely on the new reporting data to HHS that encompasses plan related contractual arrangements and expenditures, and they use that to make their case. What's your take on suits like that? Are we going to see more of them?
Katie King:Is there a merit to cases like this?
Dr. Simon Leung:Yeah. I I think it's frankly inevitable that there will be more of these to come. And and for this reason, I think it's important for employers to understand the incentives, right, and and the compensation that are going to their partners, be it their brokers, the PBMs, TPAs, or any vendor partner for that matter. Right? Because you you truly don't know who is acting in your best interest unless you have that transparency.
Dr. Simon Leung:And it's right now, again, it it's difficult to to get to that level of understanding. But working with the right partners can can certainly help and and help bring clarity to all of this. You know, it's a benefit for for plan sponsors to work with fiduciary partners and and partners who are independent, especially in industry where, you know, this there's so much opacity around the financials. And, for example, here at Counterstrong, we view independence as as being paramount to the way we do business. You know, we approach pharmacy consulting in in the way that we do.
Dr. Simon Leung:We are vendor angdastic. We consult our clients, and and our objective is to advise them with their best interest in mind. Full stop. Right? We we have a suite of effective solutions.
Dr. Simon Leung:We've pre vetted them, sometimes prenegotiated them with competitive pricing and terms. But at the end of the day, our job is simply to arm our clients with the information and knowledge to help them make the most informed decision, Not to push solutions on them because counter strong has some type of vested interest, in that client making that decision. Right? So to to answer your question, you know, I I don't think there could ever be too much transparency again, especially when you consider the industry like we're talking about here. But a lot has to be done more on that front, and I definitely think more can, be done moving forward.
Katie King:It's interesting. At least congressionally, there's been a lot of discussion and activity related to PBMs and the role that they play in in rising prescription drug costs. And there's been a lot of different proposals about how you achieve transparency in that space. So there's, you know, fully passing through rebates at the point of sale or making PBMs fiduciaries. There are all these different ideas around just trying to inject more transparency into the space.
Katie King:But there's another piece related to compensation, which is just sort of made me think about that when you said that earlier. So in the consolidated appropriations act of 2021, and brokers have to adhere to this now too, you need to disclose your compensation related to how you are servicing the health plan. But a lot of the larger PBMs and TPAs are have taken the position that they don't need to be disclosing their compensation in that way. Do you think that and and the whole idea behind it is that plan sponsors could benefit from knowing this information. Do you think that if if brokers if employers had access to this compensation information, that that would help inform their strategy around pharmacy benefits?
Dr. Simon Leung:Yeah. I I think to my earlier point, right, the the more transparency, the better. The trick is that, you know, you there there's so many ways to, quote, unquote, hide the money, but, you know, you're not gonna be able to solve for all that at once. So to to my earlier point, the more transparency, the better. I don't think there's ever a situation where there's too much transparency, especially when we're talking about, you know, compensation for vendors, whether it be PBMs, brokers, consultants, TPAs, etcetera.
Dr. Simon Leung:But go you know, going back to my earlier point, I I keep saying that is that that's why you need to as clients, you know, you need to choose a vendor who is independent and and, you know, is going to be a partner fiduciary in those decisions so that you can hold everybody accountable. You you don't wanna make a decision blindly without knowing, where everybody has, some vested interest. And in in order to do that, you need to choose a broker and consultant that that views independence as the only way that they do business, and and that's what we're doing here at Conner Strong.
Katie King:That was doctor Simon Leung of Conner Strong. I hope you enjoyed this conversation. Thank you for listening. For more LeadersEdge podcasts, go to leadersedge.com.