About Bill Oldham
More than 25 years of experience as an entrepreneur, investor, and consultant supporting growth industries and high value clients across health, technology, financial and energy industries and leading cutting-edge and dynamic companies in a broad range of industries.
Wanting to combine health and financial interests in the rapidly growing value-based payments space, Bill sought to bring fintech to health. In 2013, along with a team of two other investors Bill bought AscellaHealth, a long-term care focused pharmacy benefits manager. With less than $1m in revenue in 2013, AscellaHealth has grown to manage over $300m in drug spend and more than $30m in revenue with strong profitability every year of operation. A niche player focused on specialty pharma payments and rebate management, AscellaHealth is a leader in the value-based, transparency movement of PBMs.
AscellaHealth, a national PBM serving commercial, Medicare and Medicaid segments offers high quality prescription drug management services along with other customizable services, such as carved-out specialty pharmacy services and cost-savings discount programs through its unique and proprietary service that extends discounts on prescription medications to customers more than any other PBM in the industry. Visit www.ascellahealth.com.
Medical Travel Today (MTT): Give our readers your perspective on the impact of the Anthem initiative to create its own Pharmacy Benefit Management (PBM) company and what this means for the industry.
Bill Oldham (BO): This creates an interesting juxtaposition with the safe harbor situation.
On one hand, the government is saying that we don’t need these middlemen – PBMs — anymore. On the other hand, Anthem is saying that they’ve got to invest in the middleman world.
If anybody should know, it should be Anthem and Cigna that decided they were going to pay 60 to 70 billion dollars for Express Scripts.
It’s raised the issue, “Why do we have these?” and we’re back to the old conclusion that if we didn’t have PBMs, we would have to create them because they are needed.
It’s the only part of managed care that actually works.
MTT:Can you tell us why you got started in the PBM industry and what got you interested in starting the company?
BO: It was a couple of things and one was really personal.
I have special needs kids and I was sitting there, watching my wife talk to the insurance companies while crying on the phone and trying to get the medications for the kids.
I wondered, “What is going on in this industry?” And I started looking at it.
MTT:How long ago was that?
BO:This was about five or six years ago.
At that point in time, I owned my own company and we were partially self-insured. We had HR staff that could help my wife or any other employee and their family through these challenges to deal with the payer.
Honestly, it was the PBM that helped her and walked her through the process of resolving the problems with the kids’ medications.
I knew what was going on with tracking programs, so when Dea Belazi and I met, I understood the value that was created by this intermediary.
Nobody had those skills anymore, and unless you came to the PBM to help you figure out drug benefits, you were stranded.
The pharmaceutical industry is the heart and soul of the healthcare system. You go to your doctor and you get your script.
I don’t know whether that is a good thing or not, but at the end of the day, that is healthcare for many people.
If you have any trouble getting your meds, you can’t go to your employer because companies have discarded their HR departments.
And the payers don’t have the expertise or the plan to build these specialized services. That’s why Cigna had to buy it, and that’s why Anthem is building their own PBM, because they don’t understand pharmacy.
MTT: Is that the value proposition of the PBM industry?
BO: The PBM industry exists to make sure patients get medications they need paid for by their employer and to make sure they take them.
I saw that as this change progressed, we were going to see a great need for a clinically oriented pharmaceutical management company that could help patients through what they needed to do, not just from a benefit perspective but clinically, as well.
At the end of the day, PBMs are the only ones left with the expertise. They are the only ones that are there to help the patient through the process.
When medications cost more, this becomes an even bigger deal.
MTT:From your perspective as a PBM, why are these prices are so high? Everybody is pointing at the government or the PBM. but where does the onus fall on the pharmaceutical manufacturer?
BO:I think everybody is aware of the widely publicized actions that occurred with the pricing of the Epi-pen.
People have abused the system and imposed enormous price increases. Nine times out of ten, it is usually an independent pharma company taking those actions.
It is not the intermediaries and it certainly is not the payers.
We are in a market where if people think they can take advantage, they sometimes do so.
Unfortunately, those bad actions happen. But when you look at the broad increases in the cost of drugs, there’s a couple of underlying factors.
The day of the five dollar pill is over. It is no longer about large product supply and demand. If 50 million people were going to want a drug, the manufacturer could leverage cost across that 50 million patient population.
Enter the era of individualized, personalized medicine and genomics. All of these things that are in the mainstream and represent good trends, also drive some unintended consequences.
This is a large part of what is going on in the drug pricing debate right now. If a medication costs a million dollars, maybe the way we’ve been paying for it needs to be examined.
This is why Ascella Health is a specialty focused pharmacy management firm.
MTT: How do you control costs?
BO: One of the most important things to make costs as low as possible is using every tool, like rebates or co-pay systems, to our advantage.
The second thing that we’ve got to do is have enough clinical services and support around the patient to drive compliance.
The last thing you want is to have somebody take a $200,000 medication and then not complete their course of treatment. In that case, the drug is no longer effective.
Those are the kinds of things that we pay attention to. We don’t think that this is a never-ending thing where drugs are going to continue to get more and more expensive.
However, I do think it is a good issue for public policy and I hope we have good debate about it. There will always be a role for intermediaries to support patients, because ultimately the patient needs support.
MTT: What is the role of the PBM when you have apatient traveling to a center excellence? When people travel to the Cleveland Clinic, for example, what is the role of the PBM in that process?
BO: We occasionally have a relationship with an employer or payer where we are handling the pharmaceutical claim off of the medical benefit – whether that is in-patient or out-patient.
Occasionally, we will be relevant to the care but we will also be relevant to the prescription after the patient had the intervention, whatever that may be.
We will be doing an increasing amount of work with the payers on cases where an orphan disease or highly expensive specialty medication is needed. In these cases we actually work with those patients to make sure they are getting their medications and handling them in compliance.
Often, an employer led through a broker or TPA manages a particularly high cost patient. Frequently we can achieve anywhere from 15-30 percent cost savings – and when it is $100,000 for the medication, that is significant.
MTT:Can you explain what you see going forward, challenges to employers and the opportunities to be working with the PBM? How does this project out in the next year or two in light of what is going on?
BO:First of all, a dramatic increase in our business is the management and sourcing of specialty pharma, which might or might not include rebates. It often does not.
With our single biggest client, it does not include the rebate programs. But we do find that cost and access are still an issue, particularly on limited distribution specialty.
A lot of people have had their supply chains in the PBM industry driven by massive amounts of claims and prescriptions that are relatively low cost.
When the underlying dynamic changes of how much a drug costs, it makes a huge difference.
What we will see in specialty over the next 3 – 5 years is a continued growth. All of the projections of the independent companies are going to tell you that it’s going to be an increasingly larger slice of the pie for specialty.
That means it can be anything from $500 a month to $5000 or $50,000!
This is where I think the future of the PBM is going:
- One is access;
- Two is clinical management and support programs to actually make it work;
- Third is increasingly diversified technology base that is of two flavors;
- One is patient engagement.
- Two is patient connectivity. We are living in a digital world so the PBMs need to be digital to reach out to the patients with whom we engage.
The other side of that is the notion of asking what medications should patients be getting in the first place.
We are going to have formularies with specific drugs named. Then there are items impacting the benefit that are related but not on the formulary.
We will have independent cases where it has to be adjudicated. With prior authorization and the electronic tools that we have, we can make that work.
However, we have to have an increasing number of technical tools that are clinical in nature. We ask, “Is this the right drug for you?”
Hopefully, the patient has had tests A, B and C to determine if this is right drug. The last thing you want to do is spend a large amount of money on a medication that isn’t right.
Unfortunately, the analytic skill-set does not exist among employers or payers to make an accurate determination.
That is why I said that if we didn’t have PBM’s, we would have to create them. PBMs bring specialized skills.
Pharmacies don’t have time to do it, because between your prescription and the prescription card in your wallet, there’s actually a whole lot more work than people realize.
MTT:Can you explain if pharmacogenetic testing is part of this?
BO:It is increasingly becoming a part of it.
In my view, our focus on managing costs needs to start from the right prescription. In order to do that, we need a data driven exercise.
It isn’t a traditional intermediary checking if it is on an approved list or not. It is a clinically oriented specialty pharma understanding that is required, which is what we have built at Ascella.
Whether it is a one-off patient with a special orphan disease that we are looking to save money for, or whether it is part of an ongoing program that we manage for a hospital, we have the capabilities to analyze the situation.
MTT:Is there anything else you want to tell the marketplace about what is ahead for Ascella?
BO: I think we are going to continue focusing on the changing client demand around specialty drugs. We are going to continually focus on getting good deals, taking care of our patients and helping the payers in our third party payer system achieve value.
We are eager to work with the large self-insured health plan community.
Folks that are so focused on specialty that they are traveling for a center of excellence are likely going to be somebody that we can help. We just have to figure out what the commercial relationship is between their plan and their employer.
MTT:Can you explain to our readers if the pharmaceuticals are included in the bundled pricing? Do you get involved at all in negotiating any of those bundles?
BO: We would, but only at the Center of Excellence where they would be looking at processing a claim for the COE’s medical benefit.
When the drug is delivered at the facility, there is often a lot we can do to make that drug less expensive, depending upon the contract.
If it is an out of pocket expense, there are some programs where we can help the patient save money and we certainly would be happy to look at that.