Blue Shield of California taps Amazon, Mark Cuban’s Cost Plus Drugs for its pharmacy network
Blue Shield of California taps Amazon, Mark Cuban’s Cost Plus Drugs for its pharmacy network
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Content
0.12 -> what if California's major health
1.92 -> insurers is shaking up its Pharmacy
3.6 -> networks going with a pair of industry
5.64 -> disruptors and Bertha Coombs joins us
7.379 -> now with the CBC exclusive hey Bertha
9.179 -> Hey Joe so Blue Shield of California is
13.08 -> looking to make drugs more affordable
15.48 -> for its 4.8 million members signing with
18.48 -> Mark Cuban's cost plugs Drug Company the
21.96 -> 20 month old online pharmacy which sells
24.42 -> drugs at 15 percent over wholesale and
27.3 -> Amazon Pharmacy which just this week
29.46 -> launched 35 insulin
32.16 -> blood blue shield CEO Paul Markovich
35.399 -> says the transition will start in 2025.
39.899 -> I expect we're gonna when this ramps up
42.059 -> completely we're going to be saving 500
43.68 -> million dollars a year and I think if
45.48 -> you apply that we spend more than 600
47.64 -> billion dollars a year as a country on
50.16 -> drugs so if this were to be applied
51.6 -> across the country the savings could
53.1 -> reach easily 100 billion dollars
55.739 -> this is just a second Health insurer to
57.899 -> sign with class plus I asked Mark Cuban
60.12 -> how hard it has been to win them over
62.579 -> and he told me there are a lot of bad
65.28 -> habits they need to break but payers now
67.86 -> realize that cost plus has made the
70.02 -> price of medications transparent with
72.479 -> doctors and patients seeing what prices
74.4 -> should be and the industry will have to
77.4 -> adjust still in addition to Cost Plus
79.86 -> and Amazon blue Lucia or rather Blue
82.74 -> Shield will continue to use CVS for
86.159 -> specialty drugs because that's an area
87.9 -> where you still need to have that scale
91.5 -> how big a deal is Mark Cuban's business
93.24 -> becoming
94.38 -> he says that they're growing at about 20
96.659 -> percent a month but this is a tough
99 -> business to disrupt because you've got
101.22 -> the big players and they have the scale
103.259 -> and they can get do they see him now
105.6 -> though as a is a unique and genuine
108.42 -> competitor or do they think this is some
110.7 -> kind of Sideshow I think they don't yet
113.1 -> he's not as big a threat yet but you
115.14 -> also have these insurers that are still
117.299 -> on their contracts so maybe as their
119.22 -> contracts come roll over right and
121.259 -> likely the blues and the smaller players
123.54 -> might turn to them certainly you know
126.06 -> CVS Health isn't going to because they
128.88 -> have uh management management that's
130.979 -> their business United Healthcare isn't
132.84 -> going to and neither is Cigna which owns
134.94 -> Express Scripts right so he says you
136.8 -> know obviously he's never going to get
137.879 -> the big three but he does say that you
140.099 -> know we're talking with all of them you
142.14 -> know what if you try to go to a pharmacy
143.879 -> it's crowded a lot of times it is takes
147.54 -> time A Lot some time people like to talk
151.02 -> to their pharmacists about the
152.94 -> prescription talk but sometimes that was
154.56 -> the question didn't you write any
155.94 -> questions yeah people do like to talk
157.68 -> about pharmacists but uh you know for
159.36 -> the pharmacists they have to often call
161.459 -> and get you know reauthorizations yeah
164.7 -> no it takes a while so one of the things
166.44 -> Amazon has that ability online to be
169.44 -> able to talk to people but they also
171.3 -> have the ability for you to pick up your
174.12 -> scrap your prescription at a physical
176.7 -> Pharmacy as does Cuban they they've
180.3 -> actually partnered with a few individual
182.22 -> pharmacies that are trying to grow that
183.72 -> Network so you could still go in and see
185.94 -> a pharmacist but you know when you're
187.14 -> with complex things you know my my late
190.5 -> mom had a lot of issues in terms of
193.44 -> hypertension COPD it was really helpful
196.44 -> to be able to talk to the pharmacist
197.76 -> when she had all these different drugs
199.8 -> that might interact so just so I'm
201.659 -> understanding this basically the
203.04 -> existing system controls 80 percent of
205.019 -> the Pharmacy locations through and and
207.239 -> Cost Plus and some of these others you
208.98 -> have to basically do mail order and and
211.68 -> so but but are is he right that those
214.319 -> Middle Market players are driving like
216.959 -> if we all just did the The Cost Plus
218.76 -> model would we even need Medicare drug
220.62 -> negotiations and all that like how much
222.659 -> of the high cost of prescription drugs
224.34 -> is because of this whole system and what
226.379 -> would the people behind the oldest say
228.18 -> about why we need that is the huge point
230.7 -> of contention in the business now Kelly
232.98 -> you know you've got people in Washington
235.019 -> actually there are a number of bills
236.7 -> whether they'll ever make it to the
238.08 -> floor for a vote is another question but
240.06 -> a number of bills bipartisan trying to
242.459 -> get at the middlemen the pharmacy
244.019 -> benefit managers because the drug payers
246.18 -> say well we have to raise our prices
247.68 -> because we're going to get such big
249.299 -> discounts from the pbms so they're the
252.12 -> problem and of course the pharmacy
253.14 -> benefit managers and everybody else
255.18 -> points to the drug makers raising their
257.579 -> prices you know twice why do we need the
259.739 -> pbms why can't it all just be direct
261.479 -> because the scale of it you need to have
265.08 -> people negotiating and being able to
268.52 -> basically you know do Logistics on it
272.04 -> but there are a lot of questions about
273.54 -> whether or not that model is going to
276.18 -> continue they argue that they provide a
279.18 -> service in that they will get a big
281.04 -> discount from a drug maker for example
282.78 -> right now with the glp ones the weight
284.699 -> loss drugs the weight loss drugs as you
286.62 -> look forward to next year and you get
288.3 -> lilies coming online they might be able
290.22 -> to play off Lily's drug against you know
293.52 -> Noble nordics drugs and maybe get a
295.56 -> discount making them preferred in the
297.36 -> formulary and then that discount they
299.699 -> say helps to smooth out the the premiums
303.72 -> for everyone depending on how an
305.88 -> employer wants to see why I love
307.199 -> competition let's see I don't know
308.82 -> that's that's their argument but this is
310.919 -> a huge area of contention right now and
313.32 -> one that's getting a lot of scrutiny
314.88 -> from Regulators from lawmakers and from
317.82 -> businesses as well fascinating
Source: https://www.youtube.com/watch?v=bIzr3J5lGjE