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Transforming the Pharmacy Benefit Management Supply Chain
Episode

Eric Levin, CEO at Scripta Insights

Transforming the Pharmacy Benefit Management Supply Chain

Today, we are excited to feature Eric Levin, CEO at Scripta Insights. Eric discussed how his company brings transparency to the prescription drug market and delivers real savings to employers, payers, and members. 

We cover the cost issue of prescription medicines in healthcare, shifting the balance of power from seller to buyer by educating buyers through better insights and expertise, saving millions of dollars on prescriptions, reducing payer cost, improving member outcomes, and more.  Eric’s insights, motivation, and passion are truly inspirational.  This is a great conversation you shouldn’t miss,  so please tune in.

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Transforming the Pharmacy Benefit Management Supply Chain

About Eric Levin

Eric is the CEO of Scripta Insights, a health care I.T. solution and employee benefits company that saves self-insured employers and its employees millions of dollars on prescription drugs each year, putting money where it belongs back in their pockets. 

Eric is a seasoned executive and serial entrepreneur who has created or managed products that have sold well in excess of $5 billion. He has been involved in more than 32 mergers and acquisitions and helped to grow several companies from startup through large-scale global success. 

 

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Saul Marquez:
Welcome back to the Outcomes Rocket, Saul Marquez is here and today I have the privilege of hosting Eric Levin. He is the CEO of Scripta Insights, a health care I.T. solution and employee benefits company that saves self-insured employers and its employees millions of dollars on prescription drugs each year, putting money where it belongs back in their pockets. He’s a seasoned executive and serial entrepreneur who’s created or managed products that have sold well in excess of five billion dollars. He’s been involved in more than 30 two mergers and acquisitions and helped grow several companies from startup through large-scale global success. Eric joined Scripta because he believes the US is in a health care crisis situation where drug prices are just too high and people can’t afford the medicine they need. He has turned his energy and expertise toward solving this crisis. And so little tidbit here. After beginning his career at the market-leading consumer electronics retailer Eric joined Kevin O’Leary of TV’s Shark Tank in the consumer technology business as a part of an executive management team responsible for growing the learning company from 60 million to over one point two billion in sales in just six years, ultimately selling for three-point six billion. Just somebody that’s been around the block and sat in the employer seat, who is looking forward to offering his insights today on this area of prescriptions and the runaway costs. So, Eric, I want to welcome you to the podcast that really looking forward to hearing what you and the team are up to over there. Thanks for being with us.

Eric Levin:
Yeah, it’s great to be here. Thanks for having me.

Saul Marquez:
Yes, sir. And so, obviously, a huge problem. Lots of money being spent going to places it shouldn’t go out of our pockets. So before we dive into script insights, your company, talk to us a little bit about you and what inspired your work in health care.

Eric Levin:
Yeah, it’s interesting. I think it’s not all that unusual for people who have got a bit of work under their belt to start to feel like the things that they work on, they want to be more important. And I had a lot of fun in the previous businesses that I’ve been in and worked on a lot of. You could argue sort of frivolous products, video games and toys and so forth, although the other side of that is that their great enjoyment for people in a lot of fun and everybody gets a lot out of them, but pretty different than being in this space where what you’re doing has a huge impact on people’s lives. I mean, one of the oldest adages is if you don’t have your health, you don’t have anything. Right. And we’ve all been there like a simple as a cold right. And you’re like, God, I miss breathing normally. And so getting into it, finding the opportunity to try to help in this space for me was something that was just really exciting and made me want to spring out of bed in the morning and get it done.

Saul Marquez:
You know, that getting up out of bed in the morning, it is so key and health care does provide us with that. Everything that you do is helping impact the lives of people in a very direct way. I mean, I’m thinking about video games and I’m not a big gamer myself, but I also do appreciate. It’s those secondary effects like, OK, you know what? Maybe it’s good for social isolation because you’re gaming with somebody or it’s good for your mental health. But it’s that direct line that that really motivates you and why you chose to do what you’re doing today, right?

Eric Levin:
Yeah, without a doubt. I think, you know, any time you can work on a problem that really does have a significant effect on people’s quality of life. It’s a privilege, really. I mean, and it’s pretty exciting. And this particular space is one that is as fascinating. For years when I was in the consumer business, and I worked on fun things like toys, et cetera, and I go to a cocktail party and everybody would want to hear all about that. And honestly, people are maybe more interested in this. You know, when you tell people that you’re working on trying to bring the cost of drugs down, I mean, everybody’s got a story. Everybody’s family’s been affected. Everybody understands it’s a really broken system. And for the most part, people feel pretty helpless. And that’s, you know, that’s a big issue for our country. And it’s something that we think we have a small part in, hopefully making better.

Saul Marquez:
For sure. We all have a story here. And so talk to us about scripter insights. What exactly are you guys doing to add value to the health care ecosystem?

Eric Levin:
Yeah, I mean, there are a few ways to look at it, but I often try to start it. Just sort of the simplest level which is there’s a weird quirk to the pharmacy benefits space, and that is that it is not purchased like most companies buy everything else. Right. So like we mostly deal with self-insured. Right. So larger corporations, over a thousand employees. And if you look at how they buy anything else they know to the penny what they should be paying they’re good negotiators, they have an intense understanding of the cost of a paper clip and exactly what they’re willing to spend for it, and then they get these enormous bills from their PBM and they just pay them. They have no way to really analyze them.

Eric Levin:
And the issue is that there’s this confluence of factors. It’s murky and not transparent. And then it requires a tremendous amount of expertise. And it’s a market where prices change really, really rapidly and new products are introduced all the time. So it’s this really complicated area to be a good buyer of. And so ultimately forgetting what category of product you’re in if you can help a buyer be a better buyer by having better insights and expertise on the category that they’re buying, suddenly the balance of power starts to shift from the seller to the buyer. And technology has a tremendous track record of doing that. And that’s really the core of where we fit into the ecosystem.

Saul Marquez:
Yeah, it’s a very real problem. And so you guys have a unique spin on it, right? I mean, there are folks in the market wanting to tackle the space. One of the things that I found unique is that you guys lead with, hey, you don’t have to change your PBM. A lot of companies want to throw out the baby with the bathwater. You guys are doing it differently. So talk to us about that. What exactly are you guys are doing?

Eric Levin:
Well, we say all the time it’s our sales guy’s mantra. Everybody wants savings. Nobody wants disruption. And I always try to reframe that and say there’s negative disruption, which of course, nobody wants. But there’s also positive disruption, which is a good thing. Right? I mean, that doesn’t disruption isn’t inherently bad. You have to sort of decide how you’re going to disrupt. And so when we take a look at how to decipher this marketplace and how to make this work, a lot of times if you have the expertise and what’s different about our company, to get back to the core, the question is we have a pharmacy and therapeutics committee or committee with twenty-seven doctors and pharmacists on it. They are looking at basically every time there’s a change in the market. And so we understand this market changes massively all the time. The first six months of twenty nineteen there were four thousand four hundred and twelve price increases on drugs.

Eric Levin:
So that’s a huge, huge, and very turbulent market. If you don’t have the expertise on your side to help decipher that and figure out what do you do about it, what strategies can you take on and how do you solve the medical condition? And importantly of our committee, they’re mostly doctors. Twenty-five of the twenty-seven. The way doctors look at a medical condition is you have a medical condition that has symptoms and causes and we’re going to treat it. And there may be several ways to treat it. The way a pharmacist looks at it is sort of you’re taking X and the chemical equivalent is Y, and those are your two options. And that’s a very different philosophy just from the beginning. And what we find is that when you have doctors who are very motivated by this issue, I mean, this is a very frustrating issue for most doctors, and they’re pained by the fact that their patients can’t sometimes afford their drugs. There are very often relatively simple solutions to find a lower-cost alternative to what you’re taking that can be equally, if not in a lot of cases, more effective. I mean, I think that’s probably one of the great surprises in our business, is that people think the newest, more expensive drugs are clinically better. And typically or at least often, that’s not the case. I mean, new drugs come out and they’re no more effective than the old drugs, but they’re one hundred times more expensive. And yet the buyers of those drugs really don’t have that clinical knowledge. And that’s where we come in and combine the expertise of our doctors with the expertise of our software programmers to be able to sort of crunch all that together and say, hey, you know, you could be doing this instead of that and saving a ton of money.

Saul Marquez:
Yeah, I love it. That’s great. And so as you think about how you guys have created success for your customers, talk to us about one, maybe one thing in particular that you’ve seen as far as, wow, this is a type of business impact we want to have or this is the type of outcomes impact we want to have.

Eric Levin:
We come across a lot of, unfortunately, because that is the key to our business, one that’s more emotionally important that I’ll mention. But it’s not as that’s something we come across as much. And then one that that’s really about data analytics, which I’ll tell you about. But the more emotional impact is we do come across times where prior authorizations are not being properly applied. And very often in those cases that they’re potentially not only incredibly expensive but can be dangerous for the patient. And so we’ve had a few situations like that where we’ve we’ve been able to pick that up. In some cases, it’s a couple of hundred thousand dollars a year and spends, which maybe is justified. And would be OK, but in these cases, we’re downright dangerous and we were able to step in and help deal with those. But a more common case that it’s really the boring in the weeds stuff, but it’s what makes this business go. We had a client who had a PBM contract, and you mentioned we don’t get into PBM switching. We don’t recommend PBM’s. Our entire business is about saying you have a contract, we’re going to optimize that contract. It’s four hundred pages long. There are lots of ways to work within it. But you don’t have the tools today. So what if we gave you the tools? And so one of the things that’s interesting in this space is a drug is not just a drug. If I tell you, you’re going to take, let’s say, generic alprazolam, which is Xanax, you go, OK, that’s a drug.

Eric Levin:
Well, actually there’s there are thirty-two versions of that Right. because there are different form factors. It could be a pill or it could be aN orally disintegrating tablet. Maybe it’s time-released. And then there’s also multiple dosages in interest in this sort of happens in the spaces that often that very same drug is incredibly differently priced at one form dosage combination than another. And so we did an analysis for a client who had a PBM contract that made it very difficult to add step therapy but made it very easy to add do not covers, do not covers are a pretty emotional issue for people and one you have to be really careful of. But what we found was there were thirty-one drugs that we could eliminate a form dosage combination of, and just by reducing those they could save three hundred thousand dollars. Now they haven’t gotten rid of the drug and they haven’t taken the drug away from anybody. All they’ve done is say, you know what, the 40-milligram tablet is four hundred dollars, but the 20-milligram tablet is four dollars. So from now on, take two of those and you’ll be eight dollars instead of four hundred dollars. And just by removing those thirty-one drug’s specific form dosage combinations together, three hundred thousand dollars in savings. And those are the kinds of things that you can’t see unless you have the right kind of technology tools.

Saul Marquez:
And that’s big and it’s so complex. There are so many varieties. How are you supposed to know? I forget where this came from but I love it. It was like, hey, you’re a business. How are you managing the health care division of your business?

Eric Levin:
Yeah.

Saul Marquez:
And it’s like we all and that’s the sad truth. And if we’re not really focusing on the health care division of our business, we’re going to fail in this global economy where resources matter. We have to be thinking about how we spend on health care. And so you guys out of the complexity are able to find these little things that make a big difference. And then you add them up. Right, and say you find five of them, you’re at one point five million dollars a year. Right? I mean, that’s just crazy. It’s awesome.

Eric Levin:
Yeah, I was just looking at analysis this morning for a really large client, and it was what we can do is sort of drill down because going back to that whole disruption thing. Right. So one of the things that that we try to do is really use our clients into this and say, look, let’s just start with the low-hanging fruit. Let’s start with the easy stuff. Right. And so it was like 10 drugs that we found. Twenty-three million dollars of savings on just 10 drugs, right. And then you went further and just three of those were like 14 million in savings and only affected, I can’t remember the exact number, but let’s say it was 60 employees.

Saul Marquez:
And this is annual savings.

Eric Levin:
Annual say that’s insane. And so so now you’re at a point where you can start to make a smart decision. And that’s for us. We’re called Scripta Insights for a reason. Everything starts with an insight. And what we want to do is make sure that you know what options you have and you may or may not want to take them. But if you don’t know you have them, then you can’t take them. So what if we just started with going and putting together a program for these 60 employees that are going to save you 14 million dollars and just really target those guys? Because it’s an easy switch and it’s easy to go after and the money on the table is huge.

Eric Levin:
And now the other fifty-nine thousand six hundred employees, or whoever it is that they’re not getting affected at all. They don’t know about it, but you’re saving 14 million dollars. So so the ability to drill down, to look at where the waste is, people always sort of looked at us and say, well, what’s the magic bullet? And the magic bullet is that you have to be able to see everything. So there’s not one thing that ever matters. It’s sort of I say like it’s not that you have one huge hole in the boat and you’re sinking. You have one hundred little holes. And every month those one hundred holes change. And so you’re in a constant battle with finding the hole, plugging it. The next one pops up, plugging it. If you don’t have the right tools to be able to see where those holes are popping up, you just keep taking on water.

Eric Levin:
And that’s what’s happened in our benefits. Right. is that like you’ve gone from five percent of benefits spent to 30 percent of benefits spent, and most forecasts have it at 50 percent of benefit spend in 10 years from today, which is insane if. Nothing changes, and first of all, I think things will change because I think that there are companies like us and there are is such an awareness of this because it’s become so important that we’re doing something about it. But it doesn’t have to be that way. But it all starts with having a better understanding of what you’re spending and what and what the alternatives are to that spend.

Saul Marquez:
Well said. We definitely can’t afford this problem to continue. What would you say is one of the biggest setbacks you’ve experienced? And what was the key learning that came out of that?

Eric Levin:
Yeah, you know, I mean, it’s interesting. I think that this is a complex business with a complex distribution system to it. Right. And interestingly, a lot of my expertise not on purpose, but you mentioned I work with Kevin O’Leary for a long time and that business was a business that our core strategic advantage was distribution. And we sort of built distribution and then bought a lot of companies to put through that funnel. I learned a lot about how that that business strategy can be applied in different places. I think it’s a very underutilized business strategy. The biggest challenge for us in this business, because, frankly, the number one question I get from people, if I go to a cocktail party or an investor or just a random person is it’s so obvious. Why doesn’t everybody buy your product? Like, if you’re telling me, like you’re guaranteed savings two to three xROI, I maybe five zero for some clients, why doesn’t everybody do it? And the frustrating answer is because the distribution system and the system itself is not always well aligned. And so the complexities of that can be very frustrating. And so I think for us, learning how to navigate those, create the right partnerships and tell the story in the right way so that it is seen as helpful and not threatening to the establishment is pretty critical.

Eric Levin:
And also the truth, because we are not in any way unless you’re a PBM, we’re not threatening the establishment. We’re one more tool to help you as a benefits consultant or as an H.R. manager or as an employee slash consumer, make better decisions. That’s all we do. But in doing that, for someone who is afraid of change, it’s like, well, hold on a second, you’re going to make me look bad. You’re exposing all the things I’ve done wrong and to which we say absolutely not. If you have a slingshot, you could be the best, most accurate slinging shooter in the world. But when I give you a rifle with a scope, you’re going to be that much better. Right. And that’s sort of what we’re trying to do, is upgrade people from the slingshot to the rifle with a scope and say it’s a tool to help and enable your decision making and not to in some way make it look as if you haven’t been doing your job. That is absolutely not what’s been happening out there. I think it’s just really tough to do it. And that’s been I think the number one challenge to overcome is, is getting people to understand where we fit into the system and that we’re really there to help.

Saul Marquez:
Yeah, that’s a good call. And the practices in place today are so embedded. And just to get folks to try something else is a challenge. And that’s why I think your your approach, Eric, of keep your PBM, just layer some analysis and insights with us, I think is a fresh approach. You know, I’ve spoken with a lot of people wanting to positively impact the space. And when you’re asking them to revamp the entire thing, it’s difficult. And so I applaud you for the the differentiated approach. And I think it’s an opportunity for all of us. You’re listening to this today to think about that analogy that Eric Leptis with that scope, the slingshot or the scope. I’ll take the scope any day. Yeah, absolutely. So so with that, Eric, what are you most excited about?

Eric Levin:
Oh, I’m super excited about our progress, frankly. I mean, I think it’s also interesting and to be more specific to our company, So we are a young company. We are a tech startup. And so the maturity and growth that we’ve had as a company over the last 12 months has been really exciting. We’ve brought in some really talented new team members and I see the impact that they’re making on our business. I see the inroads that we’re making in terms of being able to tell our story and get industry insiders to take a chance on us. Ultimately, I’m excited about the growth of our company and it ties back to our mission Right., which is if we can say, look, there’s depending on how you count it. And I’ve looked at a lot of different ways of it, but let’s say self-insured, give or take, spend about two hundred to four hundred billion dollars a year on pharmacy. I mean, is it just a massive, massive amount of money? So let’s say it’s three hundred just to pick a number, we generally find forty-six percent savings opportunity. We generally capture like thirteen or fourteen.

Eric Levin:
You’re talking about taking fifty billion dollars of waste out of the system. If we can penetrate this marketplace, that wasted money is money that goes to keeping people’s benefits lower, to keeping to Lower to make sure they get the health care, making sure they can afford what they do. So I’m excited about our progress and I’m excited about what that may enable us to do in terms of having an impact on employees and employers and making sure that people are getting the right health care at a price they can afford and not being bankrupted by it because it is pretty shocking. I mean, I know my own benefits. My wife worked for 20 plus years for a Fortune 500 company. I saw the change like we went from having the best benefits you could imagine to a five thousand dollar deductible and all of these, really. And it was pretty painful. And I feel for people as it gets worse and worse. So I’m excited to think we can help make a difference on that.

Saul Marquez:
That’s awesome. Yeah, it’s certainly a huge opportunity. And, you know, even with the competitiveness of American businesses, it plays a role in both micro and macroeconomic impacts and people’s health access. So certainly awesome work that you guys are doing. If you want to learn more folks, it’s scriptainsights.com. you could go to OutcomesRrocket.Health and type in script insights in the search bar. And you’ll see the full transcript and links to everything that we’ve discussed, including the company. But, man, this is a great cause, Eric. Awesome progress thus far. Why don’t you leave us with a closing thought and then the best place for the listeners could engage with you and your team if they want to consider it and continue the conversation?

Eric Levin:
Yeah, absolutely. I mean, we cover a lot. And so thanks for the conversation. I think we got to some pretty meaty stuff, you know? I mean, for me, my closing thought is really a simple one. And it goes back to the beginning, which is technology has a tremendous track record of creating transparency and shifting the balance of power in markets. Whether you look at how you buy a used car today or how you source goods from China and the growth of Alibaba if you can empower buyers to be smarter buyers, they got a chance. And we live in a world where, quote-unquote, consumer-directed health care is something we’re pushing for. How on earth can you do that if you don’t have the right tools? And that’s the void we’re hoping to fill. And that, we think, is going to be pretty important as things move forward. So, yeah, reach out to us any time you can get in touch us through the website or certainly email me directly. It’s Eric@ScriptaInsights.com, and we’d love to help you reduce your pharmacy benefit costs.

Saul Marquez:
Love it, Eric. Hey, this is great. Certainly excited for the progress you guys are up to. And I appreciate you guys coming out.

Eric Levin:
Thanks so much.

Saul Marquez:
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Things You’ll Learn

  • People think the newest, more expensive drugs are clinically better. Typically or at least often, that’s not the case
  • Buyers of those drugs really don’t have that clinical knowledge.
  • In this global economy where resources matter we have to be thinking about how we spend on health care.
  • Know what options you have and you may or may not want to take them. But if you don’t know you have them, then you can’t take them.
  • If you don’t have the right tools to be able to see where those holes are popping up, you just keep taking on water.
  • Technology has a tremendous track record of creating transparency and shifting the balance of power in markets

 

Resources: 

https://www.scriptainsights.com/

Eric@ScriptaInsights.com