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McKenzie Robinson | SBJ

A Conversation With ... Daniel Good

Vice President of Pharmacy, Mercy

Posted online

How are players like Amazon Pharmacy and Mark Cuban’s newly launched online pharmacy disrupting the retail pharmacy market with a focus on lower costs and convenience?
Amazon is definitely an industry disrupter [with] their ability to maximize their supply chain distribution network in order to provide a great product at a great price. The challenge is that medications are not books. They’re not socks. You can’t interchange them. Those patients really need the medications prescribed for them and they don’t need it next week when the snowstorm blows over and UPS can get the truck here. They need it today in order to get treated. I think there’s going to be a healthy blending of what the local pharmacy does and what that distant pharmacy, an Amazon or mail order pharmacy, might be able to do. It’s going to force us to become more efficient and try to utilize automation more. You mentioned Mark Cuban, as well. I think he has the right idea to really be an industry disruptor. The challenge is that other companies have tried that before. The big pharmacy manufacturers and the large pharmacy benefit managers out there, they have a huge lobbying influence and a huge influence over just the supply chain of raw materials. Some of those startup drug companies, they actually can’t get access to the drug because the big manufacturers lock them out of it.

Pharmacy benefit managers are dubbed the middlemen in this industry, the third-party administrators of prescription drug programs. Some states are working on legislation to regulate PBMs. What’s the latest in Missouri?
Those pharmacy benefit managers, they were a great idea in the beginning. They brought in all the purchasing power of contracting for acquisition underneath one umbrella of one company. What has happened is that same PBM doesn’t have any regulation. They can charge whatever price they want. If you look at the actual raw numbers, the inflation of health care, the inflation of drug costs are going up in this country compared to other countries and compared to other costs of goods. You’ve probably heard of the Walmart $4 generic prescription price. That $4 prescription, if you pay cash for it is that, but if you ran it through your insurance company, the insurance company probably has a $10 or a $15 copay. Who’s making money where? The manufacturer is making $2 off that raw drug that they brought to the market, the pharmacy that dispenses it is making $2 off of that prescription for that $4 cost. But the PBM is making $10 or $11 off that same prescription for doing what? They just handle the transaction, the middleman. They’re making more money than the people that manufacture the drug or the people that actually handle the drug to dispense it. And the problem is lack of transparency. The current rules don’t require the PBMs to share what those contracts are. They hide behind the capitalism rules over laws of private contract. They have extended that now to us, the pharmacy. It’s currently illegal for me as a pharmacist to say, hey, you can actually get this drug cheaper if you pay cash for it rather than to run it through your insurance company. The Missouri Pharmacy Association has introduced, the last couple years, legislation to make some changes there. We don’t mind an open, fair market, but it’s when they have secret arrangements and secret contracts that aren’t in the best interest of the patient, that’s a problem.

You mentioned the need to create efficiencies to compete on pricing. How is technology playing into that?
On automation, which is what Amazon is so good at, we have a packaging facility up on North Neergard [Avenue] that does unit-dose packaging of our oral medications that we then redistribute across the entire Mercy ministry. They’re doing a quarter-million doses a month. A very efficient, high-speed repackaging operation. But the real future is artificial intelligence. We’re already using technology to take in the patient’s current profile. What is their disease state? What are their lab values? What medications are they on? What symptoms are they having? And we’re predicting, is there potential drug interactions there that we could potentially prevent happening before it actually becomes a symptom in the patient themselves? That’s really the future is bring that whole patient holistic care together.

You just recently completed your term as president of the Missouri Pharmacy Association. What were your major accomplishments and what goals does the organization still have?
One of my big goals was to bring together hospital-based pharmacists, retail pharmacists and long-term pharmacists and work together so we had one united vision when it comes to what we want pharmacy to do, especially in the world of legislative activity and advocacy. We also brought in more pharmacy technician members into the mix so that they would have a voice at the table. Probably the most significant legislation we passed was the prescription drug monitoring program. Sen. Holly Rehder was the one that sponsored that bill. We were the last state in the union to approve the prescription drug monitoring program, which is designed to monitor the prescribing and dispensing of opioids with the hopeful outcome of decreasing opioid dependency and opioid abuse.

Daniel Good can be reached at daniel.good@mercy.net.

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