AH003 - What's New in the Partner Channel, with Brian TenEyck

February 2, 2024

Capital Rx

Brian TenEyck, National Director of Consultant Relations at Capital Rx, shares his insights on the pharmacy benefit management (PBM) industry in episode 3 of The Astonishing Healthcare Podcast. He discusses the importance of early engagement in pharmacy procurement, increasing utilization of GLP-1 drugs and prior authorization (PA) approval rates, and the need to hold PBMs accountable for managing plan spend. Brian notes the importance of monitoring per member per month (PMPM) cost trends vs. focusing on discounts and rebates and more!

Episode Transcript

Lightly edited for clarity.

Intro: You're listening to Astonishing Healthcare, the podcast hosted by Capital Rx, focusing on the biggest issues affecting healthcare consumers, benefits plan sponsors, and health plans. We're covering the inside baseball on how things truly work (or don't) in the US healthcare system and pharmaceutical supply chain in an astonishingly efficient way.

Justin Venneri: Hello, this is Justin Venneri, Director of Communications at Capital Rx. And for today's episode of the Astonishing Healthcare podcast, we're joined by Brian TenEyck, National Director of Consultant Relations here at Capital Rx. Brian, thanks for joining us today.

Brian TenEyck: Justin, great to be here. Appreciate you having me on.

Justin Venneri: How about you take a minute and introduce yourself to start out, tell us a bit about your background.

Brian TenEyck: Absolutely. So, I've got about 15, almost 16 years now in pharmacy benefit management, along with pharmacy procurement. I spent about eight years within a very large, “Big 3” PBM. And in my time there, I worked in the specialty market. I ran reimbursement support programs and patient assistance programs, and then after my time at the PBM, it's funny – I swore off the industry. I said I would never go back to the PBM industry, and we can talk a little bit about why today.  

But then I spent about four years running pharmacy bids. So, I got to see the other side – the ins and outs of a pharmacy procurement, how plans were bidding their business through a carrier model, through a PBM, and just got to see the ins and outs of the pricing. And it just really solidified my mindset, when it comes to [this kind of] legacy model, the AWP, it just never really made sense to me. So, I got to see how you got to monitor a pharmacy benefit claim, how you got to procure a contract.  

Lo and behold, the folks at Capital Rx asked me to join them. And as you can see, my mission to never join another PBM didn't work out. I really got behind the model that was built within Capital RX. I got on board with their mission.  

And so here we are. It's been about three years now at Capital Rx. Loving the mission, loving what we're doing, the growth of the company, and excited to kind of dive into some things really all around the consultant world. As you mentioned, my title – National Director of Consultant Relations – I do support all our broker and consultant relations nationally. So, I have a pretty good footprint of what I'm seeing in the broker consultant space. And happy to share some of those thoughts with you today.

Justin Venneri: Yeah. And that's why you're here. So, what's been going on in the partner channel lately? What are brokers and consultants asking you about and why?

Brian TenEyck: Great question. The first thing that really comes to mind is brokers and consultants quickly engage us – maybe like 120 days before the plan date to engage in RFP. And it really puts a lot of folks at risk. So, I'm trying to educate in the consulting world.  

Some of this, I'll preface, Justin, is not always the consultant or broker's challenge. It could be [that] the plan might be slow to make decisions, but the longer people wait to engage a PBM or a pharmacy procurement exercise, you put a lot of risk on not only the plan, the broker, the PBM if something goes wrong. So, we're always stressing to try to give as much time to procure as possible.  

The second piece of that, Justin, really comes around [this]: the longer you wait to kick off an RFP, carriers and PBMs know you're probably not moving the business. So, your negotiating power really goes down. They're not at risk of losing it if you've got, like, 60 days to make a decision. So, your renewal offer probably won't be as strong. A hot topic that I'm talking with consultants about now is engaging your plans early, kick off your RFP, give everybody plenty of time to make decisions. And, ultimately, that should result in the best financial offers that your plan could get.

Justin Venneri: That's a good one. That makes sense. Do you have anything else you're seeing? I mean, it's the beginning of the new year here. What else are brokers or consultants coming to you and asking about to start the year?

Brian TenEyck: Boy, probably the hottest topic we got right now, and it’s for everyone is GLP-1s, the weight loss drugs. Consultants are really trying to figure out how Capital Rx is tackling GLP-1s. What's it look like in our book? And the one thing we're really talking about is the prior authorization (PA) approval rate, one that we have on GLP-1s.  

But I'm ultimately talking to the consultants to say, “You need to be asking your PBMs what their PA process is for GLP-1s.” It's becoming one of the biggest spends for plans. Every consultant is coming to me saying that there's a huge increase in plan cost around GLP-1s.  

So, my recommendation that we're talking to the consultants is, one, you need to be asking for a prior authorization approval rate from your carrier or your current PBM for your plans. Don't just get an aggregate of their prior authorization approvals. You got to get down to therapeutic class, and within that you should see GLP-1s. Is it sky high? Are they letting 90% of these going through, or are they blocking them and focusing on alternative medications?  

At that point, I will say we are not seeing a big increase in GLP-1s because of our strict PA approval rate. But we're still also carrying a very high member satisfaction level. So, we're really trying to do the right thing and monitoring [whether] people need to be on these weight loss drugs. But at the end of the day, ultimately, we'll take the plan's recommendations if they want to cover them. But a lot of folks are really walking members through other potential alternatives. So I would say that's probably the biggest hot topic coming into 2024.

Justin Venneri: There's certainly no shortage of press around the GLP-1s for weight loss and side effects. And everyone's trying to figure out what the best thing to do is for the patient at the end of the day, right?

Brian TenEyck: Absolutely.

Justin Venneri: In terms of the brokerage community or the consulting community, it seems like there have been some pretty big changes of late, in terms of the willingness to go more at risk or work more on a performance basis. It's not exactly a new trend, but do you see that trend accelerating? Or does it just feel that way to us, maybe?

Brian TenEyck: Yeah, it's really come to light with the CAA out there. I will say in the past, when I ran pharmacy bids, and even in my early part into Capital Rx, more consultants in the past were working on a per claim fee, if you will. Or, when they run a pharmacy bid, they've got, let's say $1.25 they made on every single pharmacy claim. So, when more scripts went through, they made more money. If the script count decreased, they made less. But this really brought the economics to the plan of what am I going to pay my consultants?

The trend we're seeing now in some of our top channel partners is consultants are really quoting their rates to the plan, at basically a project based for the pharmacy procurement or just a retained fee -- however you want to call it – where it's a flat fee versus a whole per claim or per member per month, which can fluctuate up and down.  

This does put a little risk back to the consultant and brokers. In this instance, they're quoting a dollar amount, and they need to go do the work for the plan in order to make sure that they fulfill that obligation. So, with CAA, they have to do reporting back, and so any disclaim disclose fees have to be put out there so the plan can report that. This should give a lot more visibility for the plan to say, “What's my consultant making?”  

And Justin, in the past I've seen a lot of brokers [and] consultants would charge a plan a flat fee to run a pharmacy exercise or to consult on pharmacy. And then, on top of that, they would sneak in a per claim fee with a PBM paying that, and it typically wasn't disclosed. These are just some bad actors in the industry. So, with CAA, they have to fully disclose what they're making. We're really seeing that migration move away from the per claim, and it's just a flat fee work at that point and try not to bury hidden costs out there. So, plans really need to be mindful of all revenue coming back to the consultant from a PBM or other suppliers out in the supply chain.

Justin Venneri: And then we started the consultant corner portion of our external newsletter last year. I know we try to put some real thought into that section, even though it's brief at times, just to highlight current tips, discussion topics, things that are top of mind in the community. And I know it's a shameless plug for the newsletter, sorry, but are there any interesting trends or things you're seeing or working on that are working well for channel partners down market or with smaller mid-sized groups that you can share?

Brian TenEyck: I would love to. It was a big question going into late 2022. We had many consultants call us -- let's call it for 1/1 plans -- they were contacting us in November saying, “We've got a group, we want to move them to you.” Which, I figured I would get killed by our implementation team if we took on some groups that late. Kind of one of my earlier statements: it puts everybody at risk when you go short. So, I got my mind thinking, and we created a program called MarketFlex Rx. And this really was designed for groups that are fully insured with no claims data, moving to self-funded or a self-funded group, roughly 800 members and below, to where it's costly for a consultant or a broker to actually run a full RFP or a reprice. And timing can be tight. So MarketFlex Rx was really built around these two things to where we have prebuilt plan designs already. Plans and brokers can adjust copays and accumulators as long as they're with a connected TPA or carrier we already have – and we have a full list, a very robust list, of connected medical partners, and we have this pricing already set. We can implement these groups in sub 60 days. We always will take more if we can, but this has really taken the burden off the consultants in these small markets to bring them to a trusted PBM where pricing set plan designs are built. We can flip these on pretty quickly.  

And the big excitement in the consulting area has been what do we do with our fully insured group? We don't have claims data, so you really can't do a reprice. We picked up quite a bit of business late in 2023 with this product from moving groups fully insured to self-funded. They get the same contract as our 80,000, 100,00-life groups, and the same pricing structure. Nothing changes. It's just more of a turnkey implementation approach and it's been super beneficial for the consultants and the brokers. We've got a lot of traction. We see that continuing through 2024 as well. Thanks for the shameless plug on Consultant Corner, too.

Justin Venneri: Of course. So, I've got a little more time here. For the newer brokers or consultants out there, what's one or two pieces of advice you might give someone that's new to the industry or new to the business of working with employers to help design and implement pharmacy benefit programs?

Brian TenEyck: Great question, Justin. I could probably go on for hours with this, but we'll keep it to a minimum. How about that?  

So, in starting this business, the one thing I have really learned over my career, doing consultant relations, is it's such a relationship business. I often said relationships trump all. I got some advice back in the day from a consultant that said, “Brokers have to know you first, like you second, and then they'll trust you.” And I've really carried that with me through my career, that things don't happen overnight.  

I often said, for new producers, engage in your vendors, your PBMs, the folks you're working with, and really build good relationships, because ultimately things are going to come up where you need a solution very quickly. You need to move a group. And having these relationships, it's a quick phone call. I get so many consultants will text and call me on a daily basis saying, “I need some help. What are you seeing in the PBM industry?” And so, I'm happy to give my top channel partners that feedback, what we're seeing from the PBMs, and it's kind of a two-way street, Justin. I'll call them and say, “What are you seeing in the broker space that we can take into the PBM world?”  

So, always build those relationships when it comes to your vendor partners, because we rely on our channel partners as much as they will call us, saying, “What are you seeing around legislation? What do you think is going to happen with some of the CAA stuff happening in the market? Are there any bills going to be passed in Congress that affect PBM?” I'm always willing to keep my great channel partners up to date on some of those kinds of behind-the-scenes things.

And then one area that I'm not only focused on the newer consultants of brokers, but also the ones that have been in the business for a long time, is when it comes to monitoring or auditing your PBM. And in the past, most people have either done this in-house or, if you're a big consulting shop or if you're smaller, they've hired a third party to monitor a contract or audit it.

What frustrated me for the longest time is I would sit there and do this in my past life, and we would monitor discounts and rebates, pretty much the only thing we would do on a pharmacy contract. And we review with the plan and the consultant, and then everybody would applaud when the PBM would hit these two contractual obligations. But my next question to them, Justin, would always be, “So, what's your plan spend like?”

So, congratulations – the PBM met their contractual obligations. But then the plan would say, “Brian, my spend is up 12%.” And it's something we've missed in the industry. Consultants are starting to get a little better at this: what was your per member per month spend last year versus this year?  

We've really got to stop letting the PBMs off the hook to say, “Congratulations, you hit your discounts and your rebate,” and thinking that's okay, because it's not. You hired them to manage the plan spend, and I think we need to start holding them accountable to managing it, keeping it flat, maybe a plus two or negative, but no one's really been looking at that in the industry, and that's really the next wave.  

I do see some of the very sophisticated consulting shops that are now moving into this. And again, if you've got a third-party vendor that's purely just looking at discounts and rebates, I feel like you're just missing the boat. So, for the younger consultants out there, focus on that per member per month spend.

Justin Venneri: Got it. Thanks for that. Okay, and then last question for you today, Brian. It's the name of the podcast. So, what would you say, over the course of your career, is the most astonishing thing you've seen that you can share with us, and that might be interesting to the benefits consultants and brokers out there that you've worked with over the years, or that might be new listening to this today.

Brian TenEyck: Yeah, I'll kind of go back to two things I really talked about. One was just the most astonishing thing is how late people wait to run a pharmacy procurement bid. It really behooves the consultants and brokers to push their plans to get going early – again, negotiating power. And then ultimately, why do we let off the PBMs on the per member per month plan spend?  

I'm kind of going back to two things here, really, that we've covered, but I think they're so important. Engage pharmacy procurement early. And then, post implementation, as you monitor that, don't just look at the contract, look at the spend. And is your PBM doing what they were hired to do?  

And I'll kind of leave you with this, Justin: plans and brokers and consultants have more power than they think they do. They just have to know the right questions to ask. And hopefully a podcast like this will bring to light some things you should be asking your PBM. We've got a few articles at Capital Rx that talk about the top four or five things you should be asking and demanding from your PBM.

Justin Venneri: What's the latest you've seen someone try to switch their PBM partner up against a go-live date?

Brian TenEyck: Oh, fantastic. This particular date is what drove MarketFlex Rx. I'll be honest, this is what got my brain thinking: I was in a live meeting, and it was November 13. And at the end of the meeting, the consultant said, “Congratulations, Brian. We're moving XYZ Group to Capital Rx.” And I probably had a dumbfounded look on my face, and I said, “It's November 13.” If I even go and ask this, I'll probably get, that's like a 48-day implementation. So, for a 1/1 group, we got notified on November 13 that we were getting a group.

And so, through a few things, we decided we could do prebuilt plan designs. And again, this is what really birthed the Market Rx small market solution, because we did it. We did it in 45 days. They're still a client. They're happy. Plan’s running really well. But yeah, November 13 for a 1/1 is when I got notified.

Justin Venneri: All right. Well, Brian, thanks so much for joining us today. I really enjoyed having you on here and I can't wait to have you back.

Brian TenEyck: Look forward to it. Thanks, Justin.

Outro: Thank you for listening to Astonishing Healthcare by Capital Rx. Head over to www.cap-rx.com/insights and visit the podcast section for show notes and other relevant content.  

If you liked this episode, be sure to subscribe so you don't miss the next one, and definitely share the link to the show with your network if you enjoyed it. Have a great rest of your day.

If you would like to learn more about Capital Rx’s full-service PBM or PBA solutions, CLICK HERE to get in touch with our team.

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