The dynamic PBM landscape

Reflecting on the PBM industry-- what's changed, what's different?

The reality is, not a whole lot. And that's kind of good and bad.

One is the model is working very well in terms of how it adjudicates claims, how we basically dispense medications.

But the reality is there's a lot of change on the horizon specific to this industry.

I've got a couple of different themes here that I think are important in terms of where I'd like to take our company and ultimately how I'd like to serve you differently.

From a price strategy with manufacturers, we've seen in highly competitive classes, insulin being the poster child for this, you see drug manufacturers, when there's competition continue to take outsized
inflation on their products.

And so, as this happens and those discounts are not passed through to the benefit of the member that's on that medication, there's this growing gap and disparity between what the actual cost of the product is and what the

what the consumer, employee, member are actually paying.

And it's especially important and more acute in the high deductible plans.

So if you look specifically at where they're exposed to first dollar coverage, this is where you see most of the noise and the energy.

So there is another theme as it relates to the state based activity.

If you look state by state, there's more than 900 bills that are that are in the marketplace today.

And they're all basically trying to figure out some way in which to relax the competition and/or take any type of steerage or any type of preference within how the pharmacies are delivered.

The most important watch out for us is that each one of these things actually is going after ERISA preemption and Medicare preemption.

So if we are not successful at the state and/or at the federal level, we're going to find ourselves in a position to where we could potentially have a network by state and or a network by region.

And I think we lose the advantages of the PBM industry, which is to create a consistency coast to coast and a benefit design that serves your members equally across the marketplace.

We need advocacy in the states.

We basically are a very small trade group within the PBM industry and we're representing your interests because in the absence of defeating and offsetting these bills, these are all bills that actually increase cost to the payers.

The time is is perfect in terms of us leading the charge.

Part of this will be education, part of it will be understanding if you don't take action or you don't get engaged, what the actual consequence and/or the cost will be shifted.

Our North Star is going to continue to deliver low net cost.

So that will not change with the backdrop of what what we're having.

We're also going to do this with an eye towards making sure that the member and/or employee experience is best in class.