Rethinking the Paradigm of Pharma Cost with Jay Weaver, Vice President and Chief Pharmacy Officer of Blue Cross Blue Shield of Kansas City: Audio automatically transcribed by Sonix
Rethinking the Paradigm of Pharma Cost with Jay Weaver, Vice President and Chief Pharmacy Officer of Blue Cross Blue Shield of Kansas City: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Kyle Wildnauer-Haigney:
Hey everyone, this is Kyle Wildnauer-Haigney, your host for the Outcomes Rocket Pharma podcast. Today, I have the distinct pleasure of welcoming Dr. Jay Weaver. Dr. Jay Weaver has practiced pharmacy for over 17 years, holding leadership positions in both major PBMs and health plans. Currently, he’s the Vice President and Chief Pharmacy Officer of Blue Cross Blue Shield of Kansas City. During his career, Dr. Weaver has created and operated specialty pharmacy programs and PBM services for major national carriers. Jay earned his doctorate of pharmacy, master’s of public health and completed clinical pharmacy residency training at the University of Florida. He’s currently an adjunct faculty for two colleges of pharmacy. Welcome, Jay to the show!
Dr. Jay Weaver:
Thanks. Really excited to be here.
Kyle Wildnauer-Haigney:
Awesome. Maybe to kick things off, could you tell us about yourself? What drew you to working in the pharmaceutical value chain?
Dr. Jay Weaver:
Yeah, it’s a funny story. You know how serendipity leads you probably to the right place. And I started out my career more in hospital pharmacy and found it very fascinating to do more the clinical practice type work and individual care plans and those types of things. And you know, as I was completing my residency training and decided to pursue a master’s degree in public health, my focus here is in epidemiology, and as I was coming out of those training experiences, I realized that I really wanted to help folks on a larger scale, more of a population basis and that, you know, we have a lot of opportunities where not only is there helping folks to get the right care, but helping them to get affordable care. And so as I entered my career, I found myself moving more towards sort of managed care and sort of value change management within first Medicaid and then in the commercial paper space and then eventually Medicare and then within health plans. And it’s, I think, a fascinating way for someone like myself as a clinician to use both clinical and business acumen to really create the most efficient, effective use of some of the pharmaceutical assets we have.
Kyle Wildnauer-Haigney:
And I think a lot of our guests talk about the power of pharmacy across the population, that you can really design these programs formulary benefits designed to really have a positive impact on many patients life. What excites you about the work you do today?
Dr. Jay Weaver:
You know, I think throughout my career, there’s been a theme that you can look at the work that you do through different lenses. But I think one of the common things that excited me early on and still today is that finding ways to deliver these highly effective therapies in an affordable fashion gives more people access to care. And so I think my platform has really been appropriate management so that we can distribute these assets in the best way, such that if we hold down premiums, more people can afford to purchase health care. Certainly, we have more tools today than we did when I started my career. It was before we even had a Medicare drug benefit. So I mean, just watching the system change around us, and then ACA was passed. And so we now have some avenues to deliver drugs. But even within those types of products as insurance products, given high deductibles and those things that things aren’t always affordable. So finding ways to keep those things accessible, but also getting the most medical value out of the new technologies that are evolving around as gene therapies, all sorts of other therapies. Finding those ways to bring that value to actually see the medical payoff of that and improve patients’ lives is what really makes me get up every morning and tackle this job.
Kyle Wildnauer-Haigney:
And, you know, I think pharmacy is in this unique position where there’s new therapies that are highly effective yet very expensive coming down the pipeline. And you know, it’s on people like you and others to figure out how can we really have a positive medical impact while also not going bankrupt because they are so expensive?
Kyle Wildnauer-Haigney:
Yeah, it’s a great comment. And I think one of the things that I try to help not only lay but people within, you know, companies that I work for and the companies that we serve. I try to help them understand that we are sort of in this evolution of care. We’ve paid for hospitalizations and we’ve paid for morbidity and mortality for many years in many ways. And really some of what we’re seeing is a shift out of maybe surgeries or just chronic care management, all that to pharmaceuticals. So our share of wallet is increasing as one factor. So we’re to look at pharmaceutical costs. We can see that it’s the most employed therapeutic modality and such that we are taking over other spaces, which you know, is a good thing. We can sometimes treat a disease with a tablet that we used to have to cut on somebody. And then there is another reality. Another factor, obviously, is new therapies where none existed before. And while that? Seems daunting to my financial partners by the same token, we now have the ability to extend life in ways we didn’t before and to help improve life in a sort of unprecedented way.
Kyle Wildnauer-Haigney:
Yeah, and I think, you know, keeping patients out of the surgery room, right, less invasive therapy and treatment is so important for not just health outcomes, but also the quality of life. The less disruption you can provide is critical. And so tell me about Blue Cross Blue Shield of Kansas City. Was it that you guys are doing different than what other companies are doing today?
Dr. Jay Weaver:
Yeah, you know, it’s a very exciting time to be in the company I work for. It’s interesting we’re I am. We’re a smaller blue cross health plan than maybe some of the large holding companies out there. And I came from one of those larger companies most recently. And what I’ve learned is we have a really interesting culture of innovation that for some people that really understand Blue Cross Blue Shield and other large health plans, and they understand how they work when they hear the word innovation coming out at the same time, they’re like, Wait, I don’t know the Blues to be, you know, always leading the charge. It seemed like fast followers and those kinds of things. And what I’ve learned is in this market where we have a very nimble sort of management team that really is pushing the envelope and trying to find new things to do. So that was really the platform on which they were able to bring me in and excite me to take this role and get smaller things I’ve been in the past, but a more dynamic plan. So to some of those things that we’re looking at is given our very high mix of fully insured business where we really are aligned on medical and pharmacy risk across the population and managing against the premium. We can take on doing pharmaceutical value deriving initiatives where the value isn’t in lowering the drug costs, it might be lowering medical costs overall. So we found ourselves in a spot where we can make decisions around both pharmacy and medical channel drugs. So when I say medical channel drugs being the ones that are paid for with a medical client like an infusion, for example, in a doctor’s office, we can look at the best care from a total cost of care, not just from a pharmaceutical cost, and really look for ways to bring those in unique ways to the market and then begin to have unique relationships with our provider organization where we align the risk for drugs against the member, the employer group, the plan, the provider, the pharmaceutical company. Really, where we’re all pulling the same direction, best outcome, lowest cost.
Kyle Wildnauer-Haigney:
Yeah, that’s exciting to hear because that culture of innovation, having the org structure be really tight and kind of focused on doing new things, I think that’s so critical today in the health care ecosystem. And on top of that, you know, aligning the incentives between pharma, you know, the providers and the plan is just going to make everyone incentivized to do what’s best for the patient. And I think that’s what we should all be focused on.
Dr. Jay Weaver:
I couldn’t agree more. And I think, as you probably pointed out earlier, this is such a rapidly moving area. So dynamic nature, just the pharmaceutical industry overall. New products coming out, daily new technologies being discovered that if you’re not on the cutting edge and leading from an innovation standpoint, I think you’re going to be left behind in this market. It’s a very competitive time in the space and people are looking for innovative ways to deliver medicines.
Kyle Wildnauer-Haigney:
Yeah. And so let’s expand on that. What excites you most about where the pharmaceutical value chain is today? And also what does this mean for the future?
Dr. Jay Weaver:
Yeah, you know, I think that in some cases, some of the alignments are beginning to mature. For example, there are companies, health plans that are getting into primary care delivery, so they’re aligning those incentives across those groups and being able to more efficiently prescribe therapies out of the gate that have the most likelihood to make a difference. I think that’s really cool. I think some of the technologies that we are seeing really providing cures for diseases that I mean, let’s face it, most of my early career in pharmacy and most of the things I studied in drug information for those of you guys don’t know what that space is, it’s really reading drug studies and reading evidence for eight to 10 hours a day to know like what drugs really do and don’t do and which things are just treating symptoms, which you’re treating outcomes. What I learned in that a couple of years in that training was that so many drugs that we use didn’t actually bend the curve on disease or cure disease. They were just there to help us feel better while we suffered. And today, I think we truly are beginning to see curative therapies that truly change the disease burden on someone’s life. And that’s just the marvel at it, not only as a clinician, as a scientist, but also just as a human. You know, what a great time!
Kyle Wildnauer-Haigney:
And so are there specific areas of these kinds of curative therapies for disease states that you’re most excited about?
Dr. Jay Weaver:
I would say certainly I think everybody is watching closely gene therapies, for example, where we can actually sort of re-engineer the body’s ability to fight off disease or to create proteins that we might not be able to manufacture on our own because of genetic problems. Or we can help ourselves with certain metabolic conditions. I think those, both the gene therapies, as well as some of the RNA therapies sort of help us short circuit deficiencies in our genetics are, I think, really an interesting approach to mitigate disease. Those are ones that I think have a lot of folks’ attention, one because they are expensive. But I think we also have to look at how do we capitalize on the value that those can create. So one dilemma that we have in health care is especially on the health plan side is if you invest in one of these therapies and someone decides they want to leave your health plan, you might not see the benefits of that health outcome for your own bottom line over time. So I think it’s increasingly important for health plans to figure out how do we best serve members where they want to stay? How do we best take care of our employer groups where we have long-standing relationships such that if we invest in a very expensive therapy for someone that we know we’re going to see the benefits of it three or five years down the road because they’re going to be sticking around and being part of our role. So those are some of the interesting ways to think about our care and the ongoing cost of care, and we talk more about some of those other dilemmas that create. That’s, I think, one of the bearers I keep my eye close.
Kyle Wildnauer-Haigney:
Yeah, it’s the patient or member churn and moving around from health and health plan that can create so many challenges and just misaligned incentives. How do you think that the value chain as a whole is going to have to adjust for this future?
Dr. Jay Weaver:
You know, it’s a great question. I think we’re at an inflection point right now where we’re going to have to rethink some of the paradigms of how we finance health care and who finances it and over what time do we finance it? So we’ll use that. We’ll go back to that gene therapy example for a minute and illustrate one of the things that we’re wrestling with at the moment, which is, you know, in some cases we’re saying we’re going to invest in a therapy that is going to give us, you know, maybe 20, 30 years worth of health care value by being curative. But we might invest 10 to 20 years for the cost in doing that. So what I mean by that is, whereas in the past, we may pay two to three hundred thousand dollars a year to care for someone with very severe disease, we might do that for 20 years. We might take that $300000 for 10 years of therapy that may be costing $3 million to cure the disease. And so you’re like, Hey, there’s a return on investment, but it’s it would be like paying for your mortgage all at one time with cash. And that’s really hard for most people. Right? Most of us take out a mortgage and pay for our house on a monthly basis over time, we may pay some interest for it, but we don’t normally have to come out of pocket for all of those costs for 30 years worth of living in a home, all at one time. And so in thinking about the health care financing dilemma it creates is how do we cover that upfront? And then what happens if those therapies for some folks that they don’t work for? How do we cover those costs when those therapies fail? So I think it’s creating new ways of thinking about the problem, both the financing side of it, but also what’s the value in someone who doesn’t get all the 10 years’ worth of cost and the value out of it. So we are challenging our thinking.
Kyle Wildnauer-Haigney:
And this is kind of like the end stage of value-based contracting or value-based agreements between health and pharma, right? I think today I would love your take on it, but I think there’s a number of different contract structures out there, but they are somewhat in a nascent stage.
Dr. Jay Weaver:
Yeah, I think we’re very early in the diplomacy. There have been some plans that have been talking about this concept for some years. And if you dig into it at first blush, you think, wow, this is a really neat outcomes-based contract. It must be doing the person, they fail the therapy, there’s some payment back. And what we’re beginning to realize is most people have actuated those agreements first with just saying, OK, if the person can’t stay on the therapy, then there’s some sort of rebate back or whatever. And that’s, you know, that’s one form of it. And I think that that’s interesting. But I think a more sophisticated version of that, we really look at what happens over time to folks, and there might be a more granular approach that some people get partial value. Ok, and let’s see what the cost should be for them. And some people get full value, and that’s great and some people get maybe no value. So really figuring out how to apportion that across populations will be a challenge and know there’s a lot of data and infrastructure needs to be able to understand that, but even more so than just how we’re thinking about today. How do we use that confluence of data that you create by tracking those outcomes to better know how well these therapies really work? And then we can use that knowledge gained to dial in the populations that we need to be using it for. And I would think if you’re on the pharmaceutical industry side of this, having that data in your hands could be powerful to say, OK, there are some people that clearly should get these therapies and some other people for whom it’s not working. Let’s help to target the use more in the populations that should get it where it’s a really good bet and we have a really strong value proposition. And let’s pull away from promoting it in those populations that may not be getting as much benefit.
Kyle Wildnauer-Haigney:
Absolutely. And like you said earlier, the pharmaceutical value chain is in an inflection point. We’re still in the early innings of all of this new development, and one of the forcing functions are these high-cost, highly effective therapies and figuring out how are we going to reconcile that with the current infrastructure in place today? It’s not necessarily an easy problem. I’m glad that you’re working on it, though, Jay, because we need a solution for it. Yeah, I think a lot of folks are working on it very hard and grateful for the collaboration I get to do with other industry leaders and trade groups and all these other areas to collaborate on this problem because it’s not going to be one person that solves it and it’s not going to be one player in the ecosystem. I think we have to engender the support of all the different players in the system, and that includes the pharmaceutical industry. That includes the payers. That includes the employer groups that are buying group benefits. That includes the government allowing us for innovative ways to do contracting and to work with pharma. And I think there’s been some interesting development in that space. As you may know, there are some changes to the laws that allow pharmaceutical manufacturers to talk to payers earlier about drugs that we’re getting ready to come out so we could prepare our policies and those kinds of things in advance of a drug launch. That’s been really cool. I think it’s going to take everybody pulling the same direction to solve such a complex problem.
Kyle Wildnauer-Haigney:
Yeah. Well, Jay, thank you so much for joining us on the Outcomes Rocket Pharma podcast. I love you could give us a closing thought and maybe the best place that listeners can connect with you.
Dr. Jay Weaver:
Well, in terms of on a professional level, I certainly am on LinkedIn like many of my colleagues, and enjoy meeting folks through that venue in terms of just seeing the things folks are posted, posting the ideas, some of the trade groups, folks in my industry, a lot of folks attend meetings like the academy to manage their pharmacies is a good one. There is SMB as a trade group for specialty medications. I think there are many, many trade groups that can help folks get together and share ideas and learn about innovation in the space. And then lastly, as partners and vendor partners, I think, working through the different players that are at the table working through these problems, whether it’s with a benefits manager, with the health plan and with the pharmaceutical company bringing together those folks and having an open exchange about how we’re trying to solve these issues and then also having an open mind about flexibility and the relationships that we have to meet those ends.
Kyle Wildnauer-Haigney:
I love it. Well, Jay, thank you again for joining the podcast, and have a wonderful day.
Dr. Jay Weaver:
Thanks, Kyle. Thanks so much.
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