Insurance & Commerce - Senate & House

Meeting come to order. We thank everyone for their attendance this afternoon and Just we've got a really good agenda for you today some really important issues that we want to cover and want to thank everybody for being here and before we get started I want to recognize my co chair and one thank chairman Lowery it's been fantastic working with him and appreciate all of his leadership Jr thank you thank you Mr chairman thank you senator You know it's really been call quite a an exciting two years also working with you and working I know we're gonna be hearing today about pharmacy costs and that you know it's this is our first meeting sense of the favorable unanimous ruling by the Supreme Court I know we'll hear more about that but that the it's an exciting time to have been involved in insurance and commerce and I appreciate your leadership on that issue. Thank you very much and have just go ahead and get out of the way when I first got elected down here was selected twenty tennis started serving twenty eleven on the insurance and commerce committee was last year for the first couple years and I've been honored to be chair since two thousand and thirteen but this will be my last rodeo this will be my last time to cheer because I'll be cheering at state agencies the next time bittersweet still very involved I'm still on the board it to in coral nationally the National Council insurance legislators but I'm excited about the opportunity to serve in a different space in a bitter sweet to to leave but we leave the committee in good hands and I really appreciate my Senate colleagues many which I've already greeted here today who's been a pleasure to work with it's been a great committee and I know that senator Hendren and the rest of the members would do great as they proceed but I just want to say thank you all for the opportunity to work with you in this regard that being said need to would entertain a motion to approve the September twenty eight meeting minutes to have a motion see a motion and a second. Second all those in favor say aye all those opposed no the motion passes thank you very much and with that and less staff is anybody that needed any kind of accommodation I'm going right to I don't D. and I'd like to recognize represented Reginald Murdock and represented Vivian flowers for discussion of interim study proposal twenty nineteen one four three you should have at your desk this study is studies the causes and effects of rising costs of prescription drugs and state specific dynamics and I would like to say that I'm very proud to have communicated with both of these colleagues over the last few months and very supportive of what they're doing and look forward to the presentation and with that you're recognized on the which one of you like to go first but I'll turn it to you and and let you proceed. Thank you chair in appreciate you so much for this opportunity and the me thank you for being a advocate throughout this process for a very difficult I've come to be a very difficult situation of them with a myriad of issues as we of legislate tors has been brought into this relationship by the obviously the for the for the good work constituency and our customers that we serve and it's been a couple years or so now says this really has wrapped up and we've made some attempts at trying to find solutions for the problems of that we have been faced with as legislators in hopefully this I. S. P. and and will in this process that we're going to rule will help us to get more information so as we enter into the session in January that we will be able to formulate some good legislation they can somehow be beneficial of everyone involved all the stake holders and hopefully they're here today and they'll participate in they'll share with us information Part of the challenge that has been throughout this process as you well know is transparency is really freaking out all of the information that we need to make good decisions as policy makers and we hear from them individually hopefully today will be an opportunity that we can hear from them all of them at the same time and we can get a chance to work through some of the details that would be needed as we go to a January you mentioned represented flowers Vivian flowers she has been a absolute champion of for this issue as well and I appreciate everything she's done and really pushing and making this happened today as being a leader and I consider the leader in this effort and I appreciate her so much I think the her leadership is what's going to help us find the key to a good solution so again thankful for all of the participants stakeholders that are here and we hope that today will provide good information so that we can makes a good sausage and end up with a nice meal one day that would be better for all especially at the end of the day to constituents that we serve so thank you so much of the. Thank you very much Representative Murdock I'd also like to thank Representative Larry incentive offered. For the opportunity to utilize this platform this committee and the study process the interim study process to to learn alum. I'd like to say that there has not been an issue that I have been. I found to be more simple on its face and then the complex in this as represent Murdock said sausage making. Process but I'm looking forward to learning I like to point out that you know we filed this sometime ago. And with the intent on doing this more and I don't know what will be able to do moving forward as we enter into the session but that'll still there still be ample opportunity to learn and to make sure that we can craft. good policy be a legislation rules and rags or just bring people together to make things better. For patients as well as for pharmacists for the insurance companies that provide insurance for our people and with that I'll in my remarks and start listening and asking. All right very good represent Murdock anything further before we move move to your comments from some other presenters no Sir okay I think we do have the the first presenter I believe is going to be joining us remotely I thank from Kentucky Melodie Shrader can you hear us. We need some need somebody to give her some volume or make sure the mac is on. We can hear you lack NC teen see if that's a good quarter we barely can hear you so let's see if we get a little volume they're gonna work on that melody for just a moment and and they're going to help. I believe we will get you some volume coming up. If you just be patient on your and they're working on our end. There you go I think I hear you. Melody K. all right we'll melody thank you very much and appreciate your phone call earlier and hope that things will go well for you they're going to get some technologists or get some things out now we can see you so if you would please just state your name and who you represent for the record and you're recognized for your comments. Thank you Senator Rapert really appreciate the opportunity to be here my name is melody straighter and the vice president were pharmaceutical care management association is the national trade association for pharmacy benefit manager or PBM I've got all the acronyms out of the way a I wish I could be there with you in person I had planned on being there at the bill just are the last day or so and we pass the bill this is in my family that prevented from traveling so do we take the opportunity to let me visit with you remotely I'm going to share my screen I tried this earlier and I think it will work so we'll try again and see. Do you see my past life. It I saw a flash of the slide there it comes it was a little slow come in there it is now I do see at least something. Very good again thank you for allowing me to be here and certainly thank you for your willingness to let me appear remotely and center if I can just take a personal point at this point I know that you're this is your last committee hearing out but I have had the opportunity to work with Senator Rapert on the national level and he has been a gentleman from Arkansas and I'm glad to hear that you'll still be using that platform to represent Arkansas in the coming months. Actually I'm your new appointment and we look forward to seeing you still ask the panel thank you thank you all again I appreciate the opportunity to be here I know today we're gonna talk about the interim study I want to compliment the committee and the sponsors I'm taking up this issue it's an issue that is of national concern and certainly an issue that is of concern to the two PCM a. We agree that the cost of prescription drugs has skyrocketed and they continue to rise and you can see I hope from this slide that are. Rising cost of drugs is making headlines across the nation The New York Times the Wall Street journal there's a lot of discussion at the federal level and at the state level about the rising cost of drug prices and milligrams Roland stating those prices I hate to interrupt you if you can hear me I just yes for instance your screen shall we showing but when you begin to speak it takes it down so I don't know. What that is but we they just mentioned I don't know if if you're wanting to really try to do that otherwise you can just share your comments and then would perhaps email the committee any presentation points and then we can share with people. Sir center did you say that my slides go away when I'm speaking right now when you begin speaking for instance there's a black screen now this is insurance in public commerce this dot dot dot and then when you start speaking at go the other state goes down your face then comes on that slide so I don't know what that is. And I don't know if perhaps our technology team could assist you in any way but my point is is that if we're not saying that I wanted you to be aware that if you want to send it to staff that we can then distribute to people. Certainly well there is a lot of information on the slides but I you can't see them I'm gonna try one more time to share it I love technology if it doesn't I'll just go through the slides Okay I see Watson. Now we see something. You see a slight. Yes we do see it so you probably invest a large sliders are using the nets I'm saying some notes I think we're saying the slide with your notes on the right. And yeah you're saying the wrong screen but we're getting closer now that's exciting ACT will please don't share any trade secret you know so. Don't have any of that will that will be a problem I don't think let's try one more time. Thank Leslie Rutledge's in the back taken note you know so. Okay okay all right so I'm going to write one more time. Designs sharing I am screen sharing are you seeing that's great. Unfortunately not now expected the same one I don't want to delay your meeting so I'm just going to walk you through can you see me yes ma'am and at this in the tentatively thank you I'm I'm trying very hard to read the slides and then I will send to staff of organized As you know I think one of the things in your insurance study is that I that that there's little bit there's been little action taken at the federal level to reduce the cost of Drugs and there are several things that I want to make you aware of that PCMA advocates for at the federal level many things that would impact the cost of drugs what is the elimination of the anti competitive pay for delay agreements the end of the orphan drug exclusivity. Other practicing innovator biologics exclusivity to seven years. Like the FDA excel be allowed to accelerate the approval of meat you brands. I would think that they need to promote the uptake of biosimilars and interchangeable. And PCMA advocates for the elimination of the tax deductibility of direct to consumer up scripture drug advertising I know that if you watch TV at all I you certainly see those advertisements that might surprise you to know that nine of the ten largest drug companies spend more on direct to consumer advertising than they spend on research and development. We believe that they should out we should promote wider electronic prescribing and eliminate the cap on the inflationary inflationary I don't see in the Medicaid drug rebate program and out of his entire list when I share this the staff to be able to look through that as well. I know that your study says that other states have taken steps to address the skyrocketing cost of prescription drugs and I applaud your efforts at this point it take up this issue are we certainly believe that there should be efforts to mitigate the consequences of these rising costs. Of. Drug manufacturers set the proper. And. I really intended to just hold up my slices I'm going through so I apologize. but manufacturers as that the price of the drugs immediately seventy percent of all right of dower prescription drug dollars goes to the manufacturer and share my supplies with you you will see that in the supply chain of the neon's and providers and sailors get a lot less amounts of that dollar but seventy percent nearly seventy percent goes to the manufacturers. Your term study talks about understanding the causes and effects of rising cost of prescription drugs that will help the citizens of Arkansas thank you we not only applies you but we agree and we believe our efforts and yours our lines we focused our hands and their beneficiaries as we look at the rising cost of drugs. PBMs help the pharmacy benefit manager is a healthcare company it's a D. to be company that contracts with plan sponsors which that employers labor unions even government entities that administer the prescription drug portion of the health benefit. I work with insurers and employers to perform a variety of services ensure quality cost efficient delivery of prescription drugs to consumers we aggregate behind our of our clients in order to save them money. Thank patience and papers forty three percent of their annual drug and related medical costs compared to what they would have spent without the services of a PBM I think it's fair to note right here when we're talking about our clients that none of our clients not the government programs are private self insured employers are required to use the ATM they do that because we bring services to the table that are the market. Seventy percent nearly seventy percent of the health plans in the United States come through your self insured plans which is about thirty six percent or your commercial health plans which are usually yes individual and small employers from G. to a hundred that number changes with the independent with the uniqueness of that the employer but it seems to be about the sweet spot when employers are looking at actually doing a selfinsured program so if you're thinking about a commercial health plan you need to be thinking of employers from accounts U. two hundred and that's where they actually health insurance for their employees. I remember again that the commercial health plans are small employers as well. Sept. If you're not all are being spent on healthcare which of course we know their billions of dollars a healthcare in this country if you think about that medical dollar twenty percent now of the medical dollars spent on the pharmacy benefits and that starts to tell the story of why our clients employers primarily are focused on the cost when I start healthcare consulting twenty some odd years ago that number was not even near twenty percent it is now for hospital status as well so it's a huge number that requires the attention and the specialties of the. So when we look at and I really I'm so sorry you cannot see my slides because it would make this story so much better but as we talk about PBMs of what they do to help keep those costs low I it really yes a simple tools that we use but one of them that we used to we used for a long time is trying to ensure that when a generic is available a generic just evinced so we sent our formula Aries two in a your courage that we were formulating that encourages generics as a cheer it is all about ninety percent of all prescriptions dispensed today are generics and the out of pocket cost for engineering is six dollars and eighteen cents. Compared to their branded counterpart they're bringing out a part which is around thirty dollars and fifty nine cents. The good news yes when a generic available ninety seven percent of the time a generic is dispensed so that's the cost savings as you can see our clients and the end of plan sponsors so what that means why are we having this conversation yes ninety percent of all prescriptions are dispensed or generics in the generics available ninety seven percent are dispensed and the average cost is a little over six dollars for those June hearings. Driver to date is in the specialty drugs. Really where we're seeing light changed opportunities just if you've got a drug perhaps C. was introduced that was that was a game changer if your estate before that we could maybe just read some of the symptoms but we could hear it and of course as you know FC will eventually kill the person has sent so that's an important game changer but when the driver came out a cost eighty thousand dollars I think all of you will remember the headlines but it came out it was discussed only in. The halls of large employers the health plans but also in states because the state going to be covering this for their Medicaid population and eighty thousand dollars treatment was a huge Hoxie issue that are to be discussed. But of that drug being introduced another competing drug. Second drug it's not engineering these are biologics these are really complex drugs but another drug entered used that competed with that original have C. drive in other words it did this anything short estate but it did it in a different way with a different molecule one. Leding was introduced ABM's were then able to use their formula airy and the gas you ancient rebates to reduce that cost almost immediately by forty percent in. The treatments are still very expensive probably running around thirty thousand dollars or so but a lot less than it was the day they were in our genes in this the mediums work to reduce the cost of those expensive specialty drugs but if there's not Hector as I mentioned earlier we've talked about some of the things the federal government can do if there's not a competitor for that truck there's very little incentive for the manufacturers to negotiate on price. The high cost of drugs right along side Arkansas and right alongside this committee. When you not have control over the price the manufacturers but we have some tools as I mentioned to drive down the cost. On hearing often only represents a small fraction of the total cost. Remember the average cost of six dollars and thirty four cents or a generic the average cost for specialty drugs sometimes in the thousands. Okay that certainly there is a co pay that the patient is pending but you have to step behind that patient and see that the employers often times are in your state you're keeping the engines running and the lights on are the ones who are paying the biggest majority of that cost and so it is really the employers or the health plan that I'd have to use those rebates are oftentimes Mr that rebate is asked back to their employer employer makes that decision S. critical that it is a the cashier dynamin of contract they make that decision and I often imagine when I think about those contracts being negotiated that it's an employer health plan they've got lots of consultants and certainly the PBM and their consultants are sitting on the other side of the table so they helped me decide that they want you have all the rebates so that they can reduce premiums are passed along to the to the beneficiaries are the major stock that they want the majority of the rebates and some of the data retained by either PM in lieu of compensation. PBMs drive savings and quality. Senate Miller. Milkshake servility I just wanna make sure to mention that we've got to think five more people in this section we got about nine people speaking so that so if you could make sure to get to your so yep points that would be helpful for the committee. Thank you very much senator for keeping me on track I. I want to say one thing real quickly so we look at the supply chain profits and also share this with you Intergraph forum you know the most obviously I'm talking about profit margins go to the manufacturers look at what PBMs health insurers even the far east are far less when the the manufacturer brand manufactures community about twenty nine percent I know you're going to hear from the pharmacies which I think is is great I think we're gonna be doing a lot of talking and I want to thank you that PCMA is a resource that we appreciate the opportunity to be here and I'm also excited to see that we're going to have the PSA owes on the car hearing conversations today is a conversation that's not having a lot of states and I will meet you all and inviting them and being on the edge of the discussion because there's a lot of layers here when we talk about how drugs get from the manufacturer through the House sailor and into the pharmacy and then ultimately to your constituents the patients The PSA items today are really the group that evens the playing field I know we've heard a lot of discussion about how independent pharmacies are small independent business which they certainly are but they when they hire a PSA I'll be hired and you do a lot of those services it may be the change would have access to and they do them on their behalf including negotiating contracts with a PBM are they also do back office work and they give them access to purchasing pools of purchasing power and it might you denied that of the three largest PSA as of their own buys those exact as wholesalers I was mentioned so thank you gonna recognize cardinal Amir House I'm here AmerisourceBergen McKesson. So we talk about this in the coming months and I appreciate the opportunity to be here on the day I talked a little bit about our concerns as we share them with you but I love to being a resource and look forward to the opportunity to be at the table as we discuss solutions coming in in the coming months if you I I skipped a few slides but I will provide all of them to year and thank you for your patience with me when the technology doesn't always work the way we'd like for you. Thank you very much members or any questions for mistreated. Representa Murdock was a question. Okay you're recognized Sir. Thank you chairman and and thank you Mr Reiter in and and then it reiterate something here that I think is very important is that obviously we're in discovery mold and would discovery mode means to me is getting to know the facts and the facts as they relate to the end of the story that we're trying to get to an end of that story is trying to get prescription prices into calls the it's the it's the it's affordable as well as the relationship between PBMs and pharmacists and all those in that supply chain that whole relationship there and trying to get that in a better situation so hopefully you know what to say you know as soon as you speak to would you speak to miss writer the the the. The good things of this relationship that this there obviously we're in this for a reason we're here here this hearing is for a reason there are some issues within this relationship and we and we need to find those we need to find out what the problems are where the issues are so that we can fix them so I do want to be clear about the purpose of this is we're trying to get in fix it mode because there are obviously some relationship issues that is trickle down to us and make us have to be here today facility or okay. All right. A represented flowers. Thank you Mr for the information I really look forward to take a look at your your hand out I tried to take notes though and I did have a call I guess I'm a try to combine this into a question some make an observation first and let my question lead to that and it kind of harkens back to a meeting that we had with one of our governmental relations professionals and when we were talking about these issues and actually Representative from PBM and I just remember in that conversation where Representative Murdock asked the question you know what is it that PBMs to do so when you. I talked about the share of that prescription dollar and I think about the role of the manufacturer well they do the research and development they actually make the drug when I think about the pharmacists who. You know goes to school has to be licensed and is also regulated they dispense the drug with a healthcare professional they're the direct connection to the patient. But then when I think about the profit share of PBMs and I'm gonna tell you I don't even know what PBMs were before two years ago so you know I'm still learning but I'm I'm always and I'm this is not. Meant to be negative it's just I'm stating a fact for me that I'm astounded that the profit share of PBMs and I know it's not all the same but there are some that are able to purchase other PBMs their profit share is is is so significant that they're purchasing insurance companies and pharmacy chains so when you think about that profit share being that significant without knowing that what exactly what that percentage is. Can you share with us you know what what is it what is the product or the service specifically of the PBM that would warrant or make that kind of profit share makes sense. Thank you so much for that question so the average profit margin of the PBM is two point nine percent. A lower that pharmacies that probably four percent lower than the wholesalers and early lower than the manufacturer's some argue that EVM spring I think that's the important question so. He B. M. R. D. to be vendor so I help plan our employer hires us to manage that pharmacy benefit certain they can choose to do it on their own take it inside it become a function of their own company and that I have seen some mergers Of late but Sir they could because no one is required to hire PBMs of either the services that we provide would be performed by the insurance company that's providing charging a premium to an employer and for covering his employees or it is a selfinsured company that is hiring someone TBA generally odds to administer their benefits so they would either with themselves or they hire someone who specializes in that area SO EM AS claims processing so when you go down to the to the state and first that the prescription we do eligibility claims processing adjudicate the claim everything the. A activity that happens in about three seconds of a point of sale we also I G. formulating and strip we negotiate for rebates we negotiate and build a pharmacy networks so that our health plan our employer have some of those prescriptions can be filled so those are all contractual relationships that have to be negotiated we also do now at its drug hearings we at the point of sale will feature a drug interaction that's our software they're usually looking at our that there's a drug to drug interaction for that beneficiary because we can look at the claims of data across all of the for all the places someone might get a prescription filled. More than ever as looking at health care becoming more about the whole person and not sparse doubts you well here's with that not centers of hospital setting here's what honesty stat we now get more and more and more involved in that cheater management if we had time I could do a whole presentation on a care manager that my husband's PBM my husband's been sick for a numbered years without incident on that right and Agent Orange issues and has a kid and ensure that comes from his BBM that did in those over as drugs are make sure that he's looking at drug to drug interactions they have access to a pharmacist that works for the PBM that they can talk to to talk about their drugs all of the things that are our clients again initially asked for to date demands when our clients contract with us they put out any sense of R. F. P. and they ask us to be able to deliver those services and we we responded as our Easter is about sixty six PBMs of cross the country. At a that's exciting because it drives innovation. And would you respond to that every TV in response to an RP but it's with an employer or health plan and they outlined the services that they want to purchase and then it to the table with a response to that are in each to deliver those services thank you B. to be bitter. The services that we provide with either happened by the client are they happen because someone hired us and you see that a lot of businesses you know today I mean if you're manufacturing a car you may be a symbol it but you may not manufacture every piece that goes in it it's a similar kind of story here it's something that would be done either by. The manufacturer I went ahead with my analogy a it would be done by a vendor that they hired to do is that does that but I'll. Our our private it helps me with have more questions. But I don't want to be late for. So I'm I'm gonna keep my notes and maybe circle back an email and I'll just look forward to your hand out but I do Absolutely and I'm happy with you I hope in person I hope is our world changes we get back to being in three D. again I would be happy to arrange a meeting your talk through at all we thank you for your time today Schrader thank you very much thank you thank you with that next on our agenda and I don't know if if that you want to I don't know if you guys are going to exit let them testify if you've got another seat will not do that and I like to go ahead since their space up there to litem space only changes like you both did if we could have John Vinson with the Arkansas pharmacists association Scott pace the impact management group. And I apologize I apologize Center for center first represented Ferguson do you still want do you have a question or want to go ahead and put that out I want to go ahead and hit you there I apologize L. E. as if Mellie still I don't know if she's still with me at the technology there was another person she still is because you probably listen is a just figuring out how to get a no this is this is Deborah Ferguson I mean I know you from in coal but I mean at the seat for you yeah well I mean I thought because a lot of these people haven't had the advantage of hearing the arguments and then call you might explain to people are concerned about PBMs are primarily the transparency issue and help we you don't know if you have a conflict of interest we don't understand the rebates and what happens to those it's. Transparency problem with PBMs and I guess I haven't fully understood the reluctant C. of PBMs to share that information because ultimately gives consumers fewer choices when they're required to mail order their drugs and it is ultimately driven up the price of drugs so maybe you could comment on those things. I think I heard most of the question I think the first well as I relating to transparency and the eight based on a law that was passed in twenty eighteen of the department of insurance will be collecting our data of from the PBMs but that will be held confidential by the Department so our regulator we're licensed in Arkansas I just like a health insurance company is licensed in Arkansas so we are licensed and I've never thank you later at the department of insurance and they have a lot of that story to look at a PBM and ask questions of the PBM and collect data so they are collecting our data today on what we are paying pharmacies in what we are paid by the health insurance companies are our clients. So that's a transparent issue I think your issue right and I want to dress it is is the reluctance each you put let's say rebate information out in the public domain. So if if I'm gushing with you in a contract and I'm also to get the cheating with another company over here and they know the terms of our contracts they're probably not going to lower their prices are going to actually raise their price and the FT's use of mind on this on many occasions that the disclosure of proprietary terms require us to negotiate with actually raise the price of drugs not lower them I'm happy to share that information with you happy to share that letter from the FTC after that is important point it's not that we don't want to share the information with our regulator what we don't want to do is have that information in the public domain we're now the other PBM knows what those are the initiations look like the other drink drug manufacturers look like know what those negotiations look like that that's our number one concern we are very supportive of transparency that will lower drug costs but we are very concerned about proprietary information that would raise the cost and again that's not us saying that although we know it. With the independent third parties such as the Federal Trade Commission that would valid state that. And I think your other issue was mail order. So. I I again want you to think about the year right so the consumer standing at the counter that's usually only a small portion of the drug cost the larger portion of that medical dollar the twenty three percent of that medical dollar that's spent on pharmacy benefits is actually paid by the employer or the health plan so it thank you that the health plan the majority of their clients are small employers that are G. two hundred so it's the or your companies that are the cheap are your state that are paid. Biggest majority of the cost and so if they can negotiate a deal again this of any business if you drive volume you drive down costs right Amazon is a perfect example of that Walmart is the perfect example of that you drive volume you drive down cost so lawyers will say it's important to me because of my. The minute I beneficiaries if they happen as many choices as are possible. But there are other employers he will say right now my budget is S. and it's not an infinite amount of money it is a defined amount of money and they can only spend much in order to be able to still pay for their widgets either employees except for so they say based on the amount of money I have I'm. Our decisions and I'm gonna have to maybe look at negotiating some of. Maybe I negotiate with the mail order to G. certain drugs and that's because I'm gonna get a cheaper price just a ten dollars at the counter does not mean ten dollars is the cost of that address. It lawyer knows that all too well and ask us to look at options and provide them options we never make that decision for them health in our the employer always is that final decision whether it's benefit design or the network decision doesn't make by the employers in your state all right things that help thanks to my question we're going to move on to our or our next presenters we thank you very much that was a great question reduction Ferguson as you know we can spend a lot of time re litigating the whole issue but we need to get to the next presenter so with that I want to recognize Mr John Vinson with Arkansas pharmacists association and Scott pace with impact management you're recognized Thank you senator I think Senator Rapert in welcoming congratulations by the way on your victory with Arkansas over PCMA at the Supreme Court that's a big win. Thank you very much of. If I could liberty just make a couple comments about that just want to say at this Christmas time Affairs some of you've seen the tax from me but it's my phone or my favorite movies of all time it's a wonderful life where the guardian angel with Intel's George to which the never been born that he has a life again and he thinks about all the ripple effects in the pawn that happened because of all people on the way and he says the George twenty comes back alive and all of his friends or savings business he says no man is a failure who has friends and and you Sir great friend to not only our profession. represented Lowery all the members of the assembly I thank you can go on and on shall gray Ron Caldwell pharmacists patients of Arkansas our physician colleagues and friends it's it's a great great moment for our country any time over yeah there's more division than ever it seems like but in this issue on drug pricing and transparency across both sides of the aisle it's bipartisan issue and we've been proud to work beside each of the to to rein these monsters and we appreciate you and everything you've done and I will tell you also lest we forget you know I think thirteen percent of rule Arkansas pharmacies closed between it was a period of like six or seven years before this litigation at all came to a head in Arkansas is meant the forerunner of this issue and a lot of work spent thirty and so we know what it's been for all of you and we know about some of those real pharmacies that didn't make it they could make it to the change and so thank you for what you're doing and and I'm proud of the legislature for standing with you if you will thank you and real world examples Gillette lost its pharmacy it was mentioned in the Supreme Court oral arguments the last decade Junction City strong Marvel there's some real real examples of pharmacies that another one didn't come in behind him so in my essay on that too because you know forty seven other states I believe joined with the Attorney General on that in quill came in with the an amicus brief what you did and what the state what this legislature did and what turning General Rutledge's done in your firmness and this actually is going to have reverberations around the country not only on this issue but any other time that they use a risa is a boogie man to say that we can't regulate business in our state so you're you're five actually it gotta have implications that will far outlive this part. Ticket or flash point I guess so you're recognized for your presentation members you should have this also at your desk and then there is a additional handout that he'd give it out as well so which will help you to understand PBMs little better go ahead John. Is I'm sorry is that senator just fill in thirty yes it is Sir yes I am going to have to leave unfortunately but I did want to congratulate. Everyone in the state of Arkansas because this is a win for everybody yes ma'am and I just wanna say how very much I appreciate the fight coming from a small town where pharmacy was just such a valued entity it is indeed a joy. It would take me a step in the right direction to try to preserve our our local pharmacy and I am a person who goes to my local pharmacy the pharmacy the best of our best and work. Armament but we want to protect them as much as we possibly can and so I just want to say that thank you so much Mister chair you you never good wish in the future so I have to leave thank you thank you for your input. All right Sir please proceed thank you very much I just I want to start of god do have some slides that do have a handout which has more specifics because I know there's often times or what have other states done there's some specifics about what they've done to the lower prices and bring fairness and transparency in their state. There is certainly many areas and we're our profession our pharmacies and pharmacists are always willing to sit at the table and we are willing to be transparent I know the insurance commissioner and his team did a great job talk just a little bit about that about their exam that they conducted earlier this year with some partner organizations and we're willing to to find solutions and we'll give some examples of that in the process in the presentation today where we have had transparency and the ability to lower drugs in our state course were right across the street from me I know last legislative session twenty nineteen there was some new PBM legislation and drug pricing related legislation that melody referred to a minute ago that bring some transparency in the rebate process that would have some of that data share with the Insurance Commissioner they're still working on final details of that there was a piece of that legislation where that was amended out that had to do with professional dispensing fees and just want to share with you that the the thought behind that for pain a pharmacist professional spending fee is because there's more to drug pricing than just the commodity or the pills in the bottle it's also the care that comes with that medicine and ensuring that patients get the counseling they need the support they need and the instructions and support to use the medication properly and to be adhered to that medicine I know melody talked about care managers earlier about how other PBMs are now using care managers to actually replace the local provider and replaced the pharmacists and why wouldn't they because that that somebody that they employee and and the ability to to to steer patients to a an option they may not want to use that may prefer to use their local pharmacists so we can continue to fight that and will continue to. Study that are not just what is the drug costs but how is the care delivered associated with that drug to get the outcomes that patients need to prevent emergency room visits in fact our own state not just West Virginia but implemented a transparent what I call a reference based pricing where the cost of the drug is repealed I could survey data and they survey the cost of providing those services to ensure the medications are used properly in our state implemented that and in leased and estimates and not just estimates but testimony that was given before this legislative body and before public health the state was able to save in this state over fifty two million dollars a year now that our pharmacists like that no they were upset they called Scott when he was in C. O. forma session Asian they called me they were not happy with those changes but they understood it was defendable it made sense it was objective it was not take it or leave it terms by a middle man whose goal is to eliminate their competition and drive patients away from their preferred provider of choice into a provider owned by that middle man. And so just want to share that to kind of set the stage for why we looked at it you guys asked I thank represented flowers asked exactly what the PBMs do and that this slide course predictably it's complicated but when I first began in the sixties they were simply a claims processor similar to lack of these MasterCard transaction in the beginning it was more paper based claims in the eighties it moved to electronic claims and then beginning in the nineties and up till today they've as they got bigger and bigger and more power in and to have an access to me literally millions of lives they've engaged in other practices for that revenue that she was talking about earlier and I did want to touch on to you I would encourage each of you when when melody talked about their net profits or their profitability being what was it two point five or two point nine I don't even know what she said two point nine percent if you will if you will research and I can provide some information on this either drug channels or Wall Street journal there been a number of places where they've been criticized in their Cloudy accounting where they take credit for the drugs that pharmacists lack Scott owns he's the one that buys the dragon stocks it on his shelf they take claim is if they bought the drugs when he's the one actually stocking and that counts against their expenses so their net profit if you took that out not be double or triple what she described. Yeah BLB it lot lot higher so I could be happy to share some of that information back to transparency and be nice to know how they arrive at those numbers so besides their claims processing where they can be paid administrative fees which is what our Medicaid program does our fee for service program I know Amy fixtures here in the state employee's program that's how they engage with the PBM they have worked at the things that are on red in your slides they are state employee plan and public teachers plan has taken away the ability for them to get rebates or kickbacks and then pocket the difference they've taken away the spread and the clawbacks the a lot of employers don't know about and a lot of managed care Medicaid programs don't know about and they don't allow him to steer patients to pharmacies owned by the PBM at a higher price for those drugs I had example last month from an employer in northeast Arkansas where a prescription drug for her daughter was filled at a local pharmacy if fifty dollars below cost and it's in one of those recipients that you talked about that was fifty dollars below his cost in a rural area let's go see what it caught this is still going on you remember this from two thousand eighteen those of your rounds C. that's a deceptive trade practice to do what I'm about to say the nurse practitioner will boast the prescription out what drives fifteen miles down the road to Jonesborough fills it at CVS the same prescription that paid fifty dollars below cost they paid themselves a hundred and thirty dollars above cost so eight hundred and eighty dollar delta on the same drug. At a pharmacy that the patient didn't want to cheese so that's the fourth area where they make their revenue Jeff question well not but on that point it those being turned in to the insurance department for complaint they are now the and they should be they should have been all along Scott was tell me is it legal term for you when you know it's not gonna be enforced and you believe that it's not going to be enforced and you may not filed a complaint because to waste of time because the president is that it's not you want to what's it called what's it called the. Yeah but the legal term for it okay we'll anyway that they will Sir it I know there were a lot of complaints filed in the sure you'll hear from insured Commissioner both some point about this but they're working with the attorney general's office they're working with us they're working with the players to figure out at least with the insurance department going back to two thousand eighteen what that means and then also with the attorney general's office going back to two thousand fifteen so yes they need to be turning in this compliance. A. Speaking of our nation the White House in February of twenty eighteen president trump has really strong set of advisors that put together some great recommendations and you may not agree with everything in their recommendations but this paper I reforming about pharmaceutical pricing at home and abroad I mean they primarily looked at the issues with the manufacturers who melody referred to a minute ago as part of the biggest part of the issue and then also with PBMs so one of the things that D. AG route which is when it's spring court does not touch is the part of the space or the Medicare space I know there's been some concern about how to to manage retirees in our state employee program and what our teacher retired teachers are able to select my mom is a retired teacher and she's had trouble with her Medicare part D. plan ever since it first was put in place in two thousand six and there is a new market based solution that locks this year that does that has more transparency where the process at the at the counter is really what it is but the vast majority of them do not there's a lot of shenanigans being played and this the system's been set up to actually encourage plan design that by a PBM to actually favor brand name drugs as opposed to generics because if they're able to like fox guarding the hen house get the rebates that may or may not be transparent then the rebates only happen on brand name drugs they don't happen on lower cost generic drugs there's also a I know of several of you have made comments about the lack of transparency that paper agrees with your comments on that and then and this number depending on the year and and what resource you have in front of you at the time this paper was put together that this White House paper estimated that eighty five percent of the market was controlled by just three PBMs. That's a NO a copy where we talk about negotiations that are supposed to be happening between pharmacies and PBMs that does not happen I don't care if it's Walmart Walgreens the biggest change in the world that don't own a PBM or not owned by PPM or if it's the small pharmacy down instead guard and whether they use a PSA or PSAL OR not that Scott's gonna talk about in a minute there is no real negotiation going on in there certainly not any collective negotiation going on because the Federal Trade Commission does not allow our pharmacists to do so. Of this lack of transparency in opaqueness is really really a problem the the paper showed where you need this is the only country in the world has pharmacy benefit managers and yet we also have the highest drug prices in the world so you know where they created because we have high drug prices are they driving the high drug prices I would encourage each of you to think about that question and when you have a system that allows three companies that dominate the market have revenues went now that they've vertically integrated with owning their own pharmacies own in their own insurance companies in some cases owning generic drug wholesalers when they're that vertically integrated in the control trillion dollars of net revenue or excuse me of revenue per year across the seven biggest insurance companies or line and own their own pharmacies in their own PBMs there are lots of games that can be played that actually I think if if you think about. I don't want to call on organized crime so please don't misquote me but when you think about racketeering yeah why not right we think about racketeering these kick backs and rebates if you. You know if you create a problem for which there is to create a solution for which there wasn't a problem except you cause the problem I think that's what have what's happening with this rebate game and I do think that gets at the the core issue of what is driving up the prices if I demand in a proprietary contract that you have to pay me a cost of living rebate to the manufacturer you have to pay me a care management fee you have to pay me a certain percentage of the drug and the cost of the drug and then you have to guarantee me a percentage increase each year what do you think the manufacturers are gonna do the process the drug when the that these companies to control two hundred fifty million prescriptions across three companies their natural reaction to that is okay I guess we have to do that for you to cover a drug will just raise the price more than to offset these rebates that you demand out of us I think that is the core of what is driving process at now from the pharmacist point of view we're not part of that like that is a manufacturer health insurance company PBM battle but I've but we're getting squeezed at the very low end of the I'm not low in at the low end of the totem pole if you will and we're being blamed for something that we don't have any control over we're certainly welcome to have a seat at the table to to bring true open reference based pricing with true fair objective professional dispensing fees to provide the services were providing I know some of you have seen on the news that pharmacists are part of the first line covert vaccine response we've been providing covert testing we we've been right there open all the all the way through the pandemic to provide needed services to it to consumers in time of need and. And we have to we have to have a model in the future to be able to step is to sustain that if our society values that care at the local level in our small communities. That regulatory oversight and no the Supreme Court back victory is a huge victory for states there's a previously before two thousand eighteen there is really a regulatory vacuum two thousand fifteen is when this first major PBM law was passed in Arkansas Arkansas led the nation in two thousand eighteen with the PBM licensure act that happened in the special session in response to some of the challenges and the efforts of the PBM industry to to remove independent pharmacies and chain pharmacies from the face of the earth and our state back in early January February and then After the legislation or model legislation was introduced in cool by Senator Rapert as president of in cool that legislation has now spread to at least a dozen other states I don't know how what the latest number is that I was the last update is that over forty stated filed legislation based off of it in actually two hundred forty different pieces of legislation so it is really made an impact right and then the national association Insurance Commissioner or studying and now with the Victor it's spring court legislatures across the nation can now clearly regulate drug pricing as it relates to the of what happens at the pharmacy counter between PBMs and pharmacies so congratulations to our citizens of the State internation Pacific's of that law I do want to point out not only on the appeals process that Supreme Court decision for below cost drugs but it does clearly make that activity that talked about a minute ago about paying their own pharmacies higher rates illegal in that does drive a process for both patients and employers. At the decision was just last week Arkansas did win eight to zero and. I haven't had time to really celebrate Senator Rapert and Representative Lowery chairman and senator Elliott it's at we've been busy we're trying to save lives and get this pandemic behind is I'm sure it will sink in but were I didn't hear a single word in the last presentation about actual patient care and outcomes besides the comments about using their own care managers internally but really at the end of the day it is about lower prices but it's also about a patient outcomes and we're focused on that I mention Arkansas state employees in public schools earlier I wanted to make sure you knew exactly what I was talking about about what how to use a PBM and how they don't so yes they have omitted a PBM they're contracted with that does the the real time in less than three seconds adjudication of a claim where it looks at see their date of birth that it matches their ID there'd They're sex in the drug it's been a process the NDC to make sure it matches up and pay a claim they do have call center the answer calls when something doesn't go right in the prescription doesn't processes you expect and they do sign the actual the the signing of the contracts with the pharmacies they carry out that piece but what our state has done right is the rebates are actually negotiating controlled so that none of those dollars can be siphoned off by the by EBD itself and collaboration with the UAMS college of pharmacy the formular management is done in house along with the M. S. college of pharmacy they design their own plan they don't allowed mail order and self dealing at higher prices they don't allow call backs and spreads and they work with the provider community to set rates that makes sense that don't put pharmacies out of business that make sure that their employees actually get the care the whole mission of spending this money in the first place right is that provide the patient care so wanted to make sure you understood that as a model to look to Is it just them well the program has been so successful there have been other entities in the state Arkansas state university Arkansas state troopers Arkansas Municipal League which is our most of our cities and counties they're moving to this plan design I'm not saying they're moving in it they're using the same plan designed and maintained control but the same plan design January first twenty twenty one Steve Bryant some of you know him and the Batesville area he has an employer group and there's a local hospital there and some other employers they've implemented a similar plan designed to this the only thing they've done different is they don't even allow the PBM to sign contracts with the pharmacies they just say if the pharmacy is authorized and licensed with the state board of pharmacy there are out of network to simplified even further to cut down some of those administrative costs on the other hand Arkansas Works which I know many of you are familiar with and will be looking at this over the next session they do allow the PBMs to do all of these things in its hands off for the state and it makes it challenging when the foxes guarding the hen house so to see you know so as to say the to how many of the activities that they're engaging in our lowering drug prices and ensuring access to care verses causing prices to rise and I'll give you a few examples and just a minute I know spread processing the call backs expected break contracting were made illegal out by this legislature this last session so lots of challenging I did put in yellow that there's still a problem in Arkansas Works where the contracts are not real negotiations the. There's one particular PBM across all three of the managed care Medicaid programs and all of the Arkansas Works programs where the same PBM is is managing all of them so that's a monopoly situation where you have a in that the report from the insurance department it was over eighty five percent of the claims now I think that's approaching ninety nine percent of the claims by a single PBM just to give you. And you know is that take it or leave it contracting broken with every plan with every pharmacy no there are some it there are some situations where it's working or court we would have been back after visiting more often but there are still major problems with it and I encourage you to study it has this committee seen this report yet chairman Rapert from the insurance department if if you have I don't want to go through all of it but there's a couple of points I want to make I do not think that we've had that I'm looking back at some of the insurance department I don't think we've had that is is no so we have not had that presented to and I'd encourage you to bring them back to talk more in depth about it but I if I could the liberty of just a couple of things going back to. supports so they did conduct a market conduct exams The Insurance Commissioner his team engaged with some experts in this area they're listed on your slide they did look at Arkansas Works in the passes to I just mentioned a minute ago and specifically they were CVS Caremark Optum our acts and express scripts but most of them now fast forward to this year's CVS Caremark just a few of the findings they found in that exam that national chain pharmacies were paid significantly higher they'd find that is five percent I would argue that on a drug that cost a hundred dollars a month the average cost was a hundred ten dollars a month that even things as low as two or three percent is significant we're talking about two or three dollars a prescription if a local a small pharmacies pay that much less that can be all the difference in their profit margin and I don't think it's a surprise because out of I do think that the PBMs of demonstrated in many areas that they're trying to eliminate the Senate and I know it looks like crap I probably but back to your point about the numbers that have and gone out of business or have struggled to provide the care they were trying to provide I really believe that express scripts was engaging in spread pricing at fifteen point two six percent I'm gonna show you on the next slide what that means opt MRX cooperated with some of the request they did with others that was fascinating and then CVS was also engaging I'm. All across the aggregate of claims and not just the individual claims on the back end I think that spread processing because what they said they paid they didn't actually pay months later they were calling back a certain percent from what they said they paid at the at the point of sale and the math on that that spread that I was talking about a minute ago I just seeking and per second we talked about pharmacist being paid professional dispensing fees of ten dollars and fifty cents a prescription and you would have thought the world had ended and some of those meetings and some of the discussions and eventually was deleted out of the bill this one PBM in this plan and the plan that the state pays for the express scripts just on spread processing alone this doesn't include any administrative fees any other areas of revenue that they were able to generate through that slot I talked about earlier just on spread that sixteen dollars and eighty seven cents per prescription just let that just think about that so just for perspective of the pharmacists were it was an unreasonable ask for professional dispensing fee at the same time the PBMs were getting away with murder and this plan. We already talked about West Virginia and I'm gonna stop there because I know we have other people that are speaking and I'm just really thankful for you to ask me to come speak for you tomorrow we appreciated and you know I've tried to listen and not say a whole lot. Because my opinion is been well stated past couple years but it's it's pretty interesting because when you're talking about pricing and talk about transparency. The factor in there. The one industry over the past ten years she'd say that has continued to make billions and billions of dollars they B. Klipsch major fortune five hundred companies they are now buying insurance companies themselves it's the PBMs. They have made the money when everybody else seems to be having a problem and not and I and I will say caviar though the the major ones those three big points right a lot of the smaller PBMs are out there that are trying to do it the best way and I've always encourage them to please come forward and step up and deal with people because they're trying to do things the way they should be done when they originally conceived C. twenty two I believe that is Senator Elliott it is necessary in the interest of time I just need to ask questions if I'm surmising this correctly when our military was testifying she talked about how ninety percent of their prescriptions are ninety percent are generics and that sounds really good and I thought when she was saying that I thought with that sounds really good and who wouldn't think that's a good thing except that one as I was listening to your as you're going along we start talking about this this is vertical buying up everything you can have is sick eight am I right in the it becomes just a matter for you but you can still realize these huge the these these huge are the I guess of the large amount of money they make these hot these huge over the future yes I'm trying to think of a word I just lost it okay yeah yeah yeah okay. I mean repealing Phoenician an OPIC comment well I that that's the thing I want to be sure because it I want to be sure I was thinking about this in the correct way that was all because to me here that that sounds really good and because what we want me here generic and it sounds like that's a great deal because of we want people to do but if you own the the company eight that's from which you are you know bind the generic is that part of what complicates everything and causes the PBMs to make so much money or I might think about that wrong it can it can but also like on the handout I gave you that's a three page handout from NCPA I just want to draw your attention to for and I know Amy Fisher's coming up here in a little bit and they've worked on some very creative programs to lower the cost of specialty drugs and it's a lot of the savings actually back to lower premiums I would draw your attention to Florida who has a recent report in the managed care Medicaid space where they found that PBMs steered patients and and keep in mind the specialty drugs may only make up one percent of the drugs but it might be thirty to fifty to sixty percent of the spend yes of the cost and they found in Florida that they were steering patients with these higher cost to the pharmacies owned by the PBMs charging higher pricing and they found it PBM affiliated or own pharmacies were being paid eighteen two as much as a hundred nine times more profit over the cost of drugs compared to the same drugs being filled at a local pharmacies self dealing it be how many of you saw the off into the Auburn Arkansas football game where the referee blew the call in Arkansas lost the game it reminds you of it makes you think those referees were employed by Auburn and of course they would do that because. That that's to their employer is in the same thing goes on in these vertically integrated companies where if you don't have an independent auditor or somebody looking at it as there is a and I'm I could go on and on but the in Texas the Collins county which is where McKinney is they recently were promised and is on public testimony savings with the with mandatory mail order save you know one copay last driver employees there when they brought an independent auditor in the found that they were spending forty dollars per prescription more compared to the pharmacies fill right in Dallas Texas or rotten in McKinney so employers or how it having the wool pulled over their eyes yeah okay I understand thank you thank you very much thank you senator thank you senator M. F.. Any other questions for prevention. Thank you for your time yes represented flowers you need to hit your. There you go there you go just hello there you go you're recognized. Thank you just like with the last presenter I have several but I'm just going to make sure this as one I heard you say that of PVM. I will miss this asset this way how can a PBM make the cost of a drug that is that a pharmacy purchase be counted as an expense to that PVM is that what you said I did say that and no I do not understand that I can provide the article to you that talks about the controversy of that to me common sense and I'm not an accountant but to me common sense who actually buys and stocks the drug ought to be the one county that against their expenses not a middle man but in the accounting world it's controversy and some companies counted that way and some don't you want to comment on that that's all I know to tell you is that I don't think it's right. But a lot of companies do it determine I'm in this insurance of that so quickly real quick. Did we always have the highest drug prices in the world and then my final question for you is when and how did PBMs go from being a transaction based. Some providing a transaction based service. To sort of I don't know when I think about your analogy about visa it reminds me of these a. Because becoming this conglomerate that can by Walmart and some of their suppliers. What if visa own Southwest Airlines and told American what they're gonna pay I mean that's what's going on here so how to when and how did that happen. The eighties if you look back at that the you know the drug pricing that in in the in the white house's paper in two thousand eighteen on that slide where it skyrocketed in the cost the price I don't think it's a coincidence that the PBMs went from a claims processor in the early eighties to all these other games that began in the nineties and just for the legislature for your record some of your new some of you've been here a long time the very first bill related to this was was aimed at insurance companies in nineteen ninety nine by Larry Teague so that's the the first bill that I know of right after any willing provider back in the mid nineties that's before my time as a pharmacist but the very first time we came to this legislature to kind of rein this in was two thousand three and it failed miserably because nobody knew what a PBM was nobody had heard of it nobody understood this and here we are seventeen years later we still don't understand it it's very difficult a lot of a lot of the complexities behind closed curtains but we're getting closer represent if it is going back to your graph did we all we did was there a time where we didn't have the highest of. Cost for pharmaceuticals in the world I don't know the answer to that question I can certainly research it okay thank you to find out what it looked like before the eighties that's a great question. Okay The New Mr pace for you going to make presentations will I believe. Thank you senator I was planning on speaking of briefly on the PSA owes which you heard just a little bit about I'm if I can under this myself for the record yes Sir Scott pace I'm with impact management group and we represent a group called the PSA coalition which stands for the pharmacy services administrative organization coalition big acronym big name but I'll I'll be brief and and trying not to to prattle on two long basically what the PSA owes are you heard me straighter mention this when she spoke earlier they are back office functions that help independent pharmacies and small chain pharmacies deal with the complexities of executing contracts with PBMs so they essentially stand in the shoes of the pharmacies the pharmacies will grant special legal authority generally a limited power of attorney to these PSA owes so that they can attempt to execute contracts on their behalf with the PBM so they can be in network so they can have access to as many patients as possible and so that patients can have as much choice as possible even though they are large organizations the the largest PSO has about five thousand pharmacies it that the contract on behalf of they don't have negotiating power which doesn't really sound intuitive but the biggest PSAL represents about five percent of the total prescription drug market place and as you heard John say just a second ago you've got one PBM in Arkansas for example that represents ninety nine percent of the lives in Arkansas Works so when you've got five percent market share versus ninety nine percent it didn't matter how big your parent company is you don't have any leverage with the PBMs and so with the PP the PSL's function is critical to help with back up back office functions but it's. Voluntary if a pharmacy wants to read and execute their own contracts they can in fact many do but for those who don't it's a service that helps them to take one more thing off their plate so they can focus on what they do best which is taking care of patients. The PSL's do help to gain access to networks that aren't generally available to a local pharmacy on their own so if your local pharmacy down the street wants to be a preferred provider in a Medicare part D. plan the PBMs won't let them be on their own they generally have to go through a PSA four they can't be considered a preferred provider so the the PBM such again hold the cards to deciding who gets to be preferred and who doesn't get to be preferred and then I think the the the other thing that I would say is that yes it does are transparent but what I love about of the Schrader's presentation she does a great job representing her organization but you know whatever the PBMs got their hands caught in the cookie jar they knew additional legislation was come and they had to try to find a new boogie man to to push the the blame towards and that's what they're trying to do with the PSA owes just because they're not something you've heard of before they're trying to say well don't look at us look at this this group over here so what I'll tell you as a pharmacy owner I use PSA in my business and I do it voluntarily even though I'm both the pharmacist and a lawyer because they get to evaluate those contracts and execute them for me that's one less thing I have to do in my business and I do so in a transparent fashion I pay them a flat monthly fee that I know on the front end what it is how much I'm paying and I liked if I want to buy that service or I don't want to buy that service PSA owes don't process claims like PBMs do PSA owes don't I don't know if you have my slides up there or not I was just going to try to talk off of the way so it's it is it's not it it's okay I will I will go through that and I think they are there she said I know that I've got a copy here it's fine I will go through the mobile in their interest time but what I want you to know is that we don't process claims this is a process claims they don't decide what drugs are covered they don't negotiate rebates all the things that PBMs do that that try to drive up prices price thank you PSAL. Just don't do that and so what we simply do is we we thank you we service back office functions exclusively for the independent and small chain pharmacies and we do so in a transparent way where it's a flat fee for service and again as as an as a pharmacy owner myself I choose to use it I'll also tell you this one of the core functions that they provide that I think is really valuable is that help the whole the PBMs accountable with the pharmacies so very often times when the pharmacy has an issue with a PBM the call John sometimes and then the call the PSA and say Hey I've got a problem with express scripts or Caremark can you help me get this problem issued resolved so the PSL's kind of service that advocate for the pharmacist with the PBM would always work out with a good answer but they certainly they certainly try the other thing they try to do is to make sure that when a PBM says they owe so much money to a pharmacy that the pharmacy collects every penny and so they have compliance functions that they help with to make sure and record reconciliations functions to make sure that every penny of the pharmacy is paid to the pharmacy so that they like to think of himself as an advocate for the pharmacist I think many times the pharmacist wishes that the PSA had the negotiating leverage to be able to to do more it's okay don't worry about it at many times the the that the pharmacist wish that the vehicles had more leverage than they actually do it's just a function of the PBMs having so much of a tight grip on the on the prescription drug market place so just a very brief background of happy to answer any questions I know I know we've gone a little bit longer than normal today but a lot of John's passion in telling the story because he's right I mean this legislatures done yeoman's work over the last number of years in finally getting their hands around and being a national leader on reforming the PBMs who are very much the cost drivers in what's going on in prescription drugs and hold every. A. L. sebagian blame everybody but themselves and it's really kind of frustrating to hear that but that's that's where we are and and I'm glad that Arkansas is at least to take a leadership role in that no Preciado you Mr chairman I'll say that but in case I don't get a chance thanks for all your work on this committee I appreciate working with you over the years and the congratulations on moving to state agencies you've been it's going to be a new rodeo there for sure representa Murdock you have a question. Yes real quick couple questions our PBM statutorily mandated. PBMs yes no they're not so they are brought into this. Arena by virtue of them being hired by the insurance companies that's correct for the employers or employers so it you know obviously there's a couple people that not here today to won't be you know a PBM themselves I know that the street was here and also insurance companies that are very critical to this conversation of trying to find a good resolution solution to this so That's that's this is critical as we get toward January to try to really because everything that you guys are saying and everything I here in in the in the even the the US Supreme Court decision. It's just says it just makes me wonder about the necessity of their existence. I'll say this as of again as a pharmacy owner I wouldn't want to go back to a day where I had to do a paper claim for every health insurance claim or prescription drug claim that I process that want to be able to do that electronically but what I would like to go back to as a as a provider is a day where the doctor actually gets to prescribe what they want to prescribe within reason on obviously there are there evidence based medicine guidelines that the state uses I think very effectively in their state employees program but in some of these programs that are administered exclusively by PBMs they've taken away the doctor's ability to decide what to prescribe they've taken away the pharmacist ability decide what to dispense they've done it all for a profit focused motive and and that's the piece of health care we've got to get back in the control we got to figure out how to align everybody's incentives and we've got to make and towards patient care and we've got to figure out a way to make sure that there isn't a middle man in the equation regardless of who it is who extracts more dollars than the value they provide and I think that's that's really critical going forward. Representa Murdock I will tell you that and I was looking to see if represented first I'm still here but she was there I spoke at the AMA a couple years ago the only issue and they they were very bold the president of the AMA actually said and that we're reaching a point where they would just like to see PBMs removed completely and and so I think that this case this case this been now settled the Supreme Court and other things that we're saying may may that may be the saving of that entity but yet a lot more transparency a lot more accountability to them but I'll tell you there's a lot of people that have actually spoken up publicly and nationally to say we just need to remove them and that's all predicated on the fact if you aren't going to be transparent if you are going to play fair then we're going to do something to remove you so that we can get these costs back under control so got Representative. Flowers did you have another question there. It may be somewhat of a comment but I think I would like to hear your feedback because one of the things as I began to learn about. The complexity of all of this the pharmacy and PBMs PSA owes an. It what struck me what still strikes me are the. How all of this complex web is just rife with to me conflicts of interest. And you know I think I ask you one time act that obviously I've taken issue with PBMs and I just want to be fair in getting your feedback on the in the so not only did I comment on the interest of PBMs and. They're being able to on pharmacies but then be able to determine how much pharmacies are paid and where patients can get their pharmaceuticals from then owned in part insurance companies and then you know Control eighty five percent of the market among the three companies clearly I have concerns about that and see the contribution of all of those issues to where we are now. I would like to ask you to talk a little bit about how or why is it that the PSA owes can't negotiate. And also talk a little bit about the interest of manufacturers with PSA owes I just I think that's something we need to explore is in this in his chair and one interject that we have several people still that have not even been heard today so if you could hit these very quickly say it points and let's move on and get Michael Lindsay and brought a dead man and then we have served to other topics sheared we got hit. He's not here okay go ahead it yes Sir and forgive me service in flowers but I I your second part your question is what stuck in my head not forgotten your first part now did I say it something about the interest of of the interest of the manufacture can't yeah why can't they need to go see it thank you for that purpose or not so it comes down to pure two things number one it's an federal antitrust laws and then I'll explain that PSL's bring together competitors which are other independent pharmacies and small chain pharmacies to assist in executing their contracts on behalf of them but they don't have the legal authority under federal law to be able to collectively say no and we're not going to work with you Mr PVM and less you come to our terms if they say no because the contract is bad that really doesn't have any bonding affect the PBM can say I'm still going to your members I'm going to negotiate with them and negotiate with them individually and get signed up onto a onto a contract and sometimes PBMs won't even do that to just send out a contract addendum saying Hey we're adding this network to a contract you've already assigned you you've already signed and our contract say that we can do that so the PBMs work around to take advantage of federal law that prevents the PSA owes from having any real negotiating leverage S. the second part of your question regarding we're meant manufactures play with PSA owes they really don't the only people that are really in the equation with the PSA is the PSA and the pharmacy themselves the and I I think of the PSA kind of like as a bookkeeper in my pharmacy I hire somebody to cut checks and help manage the books of the pharmacy but they don't really interact with anything else our PSA of to help execute evaluate contracts for me and help with some compliance and reconciliation but it's a back office function and they don't really interact with anybody else. For me so there's no manufacturer involvement for the PSA owes. Right. Of the Representative Perry is you nineteen. Close okay thank you Mr chairman so I think this piggy backs on what represent flowers was saying but if. The where you have PBMs will actually own you know our pharmacies will actually on PBMs is there any vertical integration with PSA owes yeah it depends on the PSAL the three biggest PSA owes are owned by three pharmaceutical wholesalers okay they are separate legal entities and they are used generally is value add service for their wholesale customers but the big three are there are certainly some independently standing PSA owes there's one called epic pharmacy network that operates in Arkansas and it probably actually has the second largest number maybe the first largest number of independent pharmacies in their network in Arkansas and they're not directly connected with any other group that that is a wholesaler like that which one is the largest well if the epics either largest or health Mart atlas is largest with the probably one and two in terms of size probably about a hundred stores a piece that are thank you welcome right of Germany you have anything further. I was gonna say there's a couple of others may be okay are today there's some smaller independent ones that do have a number of stores in our state and and more stores more storage or even choosing though so that is the case and then just make a final comment back to the point about the conflict of interest one thing that wasn't mentioned today was briefly but sometimes and this does not happen in E. B. these plan and most of the time ninety eight percent the time doesn't happen our Medicaid plan but when there's a conflict of interest with that rebate issue of the more brand name drugs up cover the more rebate dollars I get and from getting a percentage of that that can drive revenue sometimes brand name drugs that shouldn't be covered because they don't have the evidence even when generic drugs are available that are cheaper are placed ahead on formula airy and covered in the generic drugs or denied that is a big problem with driving up drug prices and there's a conflict here because if we cover this brand name products we're going to get a kick back out of it just one point that out there very good we appreciate your presentations thank you for being here is Michael Lindsay other. Mister Lindsey if you would please make your way for do not believe you'll be the last presenter on the out of the for us today. Yes senator repetitious Jody Cartwright I'm on the phone and I'm with Walmart and the senior director of pharmacy merchandising and I was going to make the presentation for Walmart today. Okay we'll hop of Walmart and my fellow with his job tomorrow just a moment. We appreciate you speaking up but not only is it the table with you as well and and so appreciate that and so so that I can get this down would you because I didn't know I didn't know who you were exactly so Michael you would state your name and who you are for the record and they would you restate it then obviously you're welcome to proceed thank you Senator Mr chairman and members of the committee Michael into director public affairs and government relations for Walmart and Jodie in addition self. Jody would you restate that you're not for my enforcement. Senator Joni cart right and I am the senior director of pharmacy merchandising at Walmart all right thank you you are all both recognized for your presentation. Thank you. On behalf of Walmart and my fellow thank you we appreciate the opportunity to participate today and the Senate and house insurance and commerce meeting Arkansas is very important to our company our state it and our customers we work hard to provide everyday low prices so people can choose to live better our home office is located in Bentonville Arkansas and we employ about forty nine thousand people in the state of Arkansas. We operate a hundred nineteen pharmacies in the state as well. Our approach is customer centric with the goal of providing convenient affordable access to everyday low prices. We offer a full spectrum of services whether it's at our brick and mortar locations your home delivery mail order specialty pharmacy. We are particularly proud of our industry first low cost generic prescription program which covers many therapeutic category we have this program since two thousand and six and we help compel the industry to follow suit saving millions of Americans on their prescriptions cost. We've also recently opened a new Walmart health center in Springdale Arkansas customers can now experience the state of the art health center offering customers new ways to save money while living better and healthier life. Disability provides quality affordable and accessible health care and Walmart Health is partnering with several on the ground health providers to deliver primary urgent care lab X. ray in diagnostics counselling optical and hearing services all in one facility at affordable transparent price regardless of a patient's insurance status. Well we strive to keep costs low and passing along savings to our customers we have experienced increases in the cost of purchasing many brand name prescription drugs. During the same time period we have seen a significant increase in the cost and utilization of specialty medication. The specialty medication category is high are high priced prescription medications that are used to treat complex chronic conditions like rheumatoid arthritis multiple sclerosis and cancer to name a few. Increases in the cost and price of brand name drugs and greater utilization of specialty drugs has been a key driver of higher drug stand. Today actually drug account or parking only fifty percent of the total drug spending in the U. S.. And these factors have changed the mix of drugs stand and resulted in a disproportionate share of dollars spent on brand name drugs and specialty drugs. A large percentage of the prescription drugs dispensed are generic drugs that they were they represent a significantly small percentage of the total drug costs. As many people that hear this on today the pharmacy eco system is very complex there are many components including bar mass aren't even if that managers insurance companies retail and mail pharmacies commercial state and federal payers and and more the different components all play a role in determining the ultimate price paid by the consumer. Some of these components are paid in how they operate within the ecosystem and have a disproportionate role in the rising cost of prescription drugs. The top three PBMs Caremark yes by. And optim our acts represent about seventy five percent of the market share and description failed and all operate their own large mail order and specialty pharmacies. The vast majority of prescriptions dispensed are for Medicare commercial and Medicaid recipients the prescriptions are typically adjudicated by the pharmacy benefit manager who also helps determine which drugs will be covered their pricing and where they can be filled. Pharmacies must work hard to ensure contracts with PBMs are fair allowing them to change their business to continue serving our customers our company supports transparency in order to provide lower cost and best value for the pairs and for our customers. I appreciate the opportunity to senator Robert share I will mark you and am open to any questions you may have. All right the members if you have a question rang in for that Michelin G. do you have anything to add to what you said senator I appreciate that person up here to be here today out for we appreciate you for making the time to be here and input on the subject seeing no questions we appreciate And and again we've got a lot going on represented flower show we need to get these people heard go ahead. She may have left you but she she is. Hi miss Cartwright thank you for your remarks I just had a quick question. I I understand that even with the volume and the size of the Walmart. Of and even though you all Have your own pharmacy program. There's still been an impact in terms of the cost of prescriptions and I guess my question is. It sounds like There may be a perspective from Walmart in terms of the impact of GM's to the market and and drug costs except for a. And I understand to that earlier this year there were some significant changes with regard to the number of pharmacists employed by Walmart and other pharmacies. Can you I guess share with us whether or not that there is any overlap or any connection there. I do not have any information on that number apartment is I think that's a great question and I can double back in the what we can share I can't comment on the fact that even though when you think about Walmart as a large box and you think about it having leverage from being able to negotiate on our purchasing power from a pharmacy perspective we are still a very small chain by comparison of the other large and forms to our large players so we we only have about forty five hundred pharmacies which really puts them out small change and reduces our leverage from a purchasing power on the pharmacy side large to you so you're of large players who with those large players B. and then I'm done thank you. A larger cares for us in comparison would be our competitors EDS Walgreen. Thank you. Of course CVS actually is a PBM now as well and I believe they were also the purchaser of Aetna insurance company as well so thank you very much I do want to say thank you to you personally Michael and and I probably missed court right as well because you know I've had some constituents contact me over the course of the last few weeks when they were prescribed hydroxy Cork when but then would present at a pharmacy and Special they would often be a Walmart pharmacy and would be denied is that situation I think is fully rectified now right and they're not being denied filling those prescriptions is that correct sorry over policy is we have no no I mean there's there's no restriction on filling a prescription as a corporate policy that our pharmacists are independent and they fill prescriptions based on their professional judgment so sometimes it could happen I know that we feel a lot of those prescriptions in it on a few occasions it has happened and I'm happy to discuss those as you hear the about those capital we're hoping that as the election season is winding down maybe the politics will be removed a little bit more from all that out because it you know it's important when when they're contacting legislators in the evening late at night almost in a panic. Right to find out how can we get our prescriptions filled it's very stressful for everybody concerned so I appreciate you all for taking a look at this and do what you can so that our Kansans have access I did see a report the other day they came out that the peer reviewed study has been released and it said eighty four percent effective with the usage of hydroxy Cork went early on before people get so sick they need to be hospitalized so thank you for being here today and one move to Adam easy now and I believe secretary furniture is here appreciate your patience were nearing ten minister five and so at this time of day for all concerned will try to keep things moving and and make sure that you the time you spent waiting you get to present what you need to but we'll try not to belabor issues for you that much so recognize Amy felt your and I believe Courtney wide if you just state your name and who you represent for the record then we can proceed in. Amy fetter secretary of transformation shared services thank you. Corny white my principal consulting action with Millman okay thank you you're recognized. Thank you Mr chairman and committee members that are still here we appreciate your time today we we are happy to update you on EBD and Health pharmacy plans a board met at one o'clock today so the presentation you're saying today was just revealed to the board members today and I'll turn it over to Courtney Tate to give the presentation okay thank you. Okay thanks for having me good afternoon this is an update for both the Arkansas state employees and for the public school employees I know last time I was here we were focused only on the state employees but we also want to let you see where the the public school employees are falling to other formats me very similar to what we looked at last time we'll talk about where the financials are projected to be for county or twenty twenty and then also for twenty twenty one okay. Okay so just real quickly we're not talking about the budget lever cities of the the items that we have at our disposal to help with the minister of the plans and then I'll give you an update on ANC and PAC separately. So we think about the way the manage the the the ANC and PAC health plans that we really boil it down to five five levers the first one is skate state and school district funding so that's money that's appropriate either by the state and Senate or the the state or by the school districts that gets contributed to EBT to help pay for a portion of the the cost the second one is the employee and the retiree contributions so the active employees have money taken out of their paycheck every month that by weekly whenever it happens and that pays for some of that and the retirees contribute premiums for that the third one is the plan design so that's you know what's covered and what's not covered changing deductibles changing copays changing maximize of pockets the provisions that the that the the patient or the member actually see when they go to get care or or access care so those last two the employee contributions in the the plan design those are really cost shifting of techniques so that shifts costs from EBT to the employees and the retirees as a way to help mitigate rising cost for your dear the third the fourth one is EBT initiatives this is things that EBT takes on or identifies as way to reduce costs so like there's a lot of mention of the that things that have been done in their pharmacy program to help manage that tighter to help reduce costs there's other opportunities in medical that we're looking at to provide benchmarks to the board things like wellness how effective are the wellness programs are those things that we should be still be doing our disease management programs appropriate so we'll be looking at things like that and those are ways to reduce costs without affecting the benefits and the last one our reserves. So that the state has reserve set up both the ANC and PAC to help offset we we label them as catastrophic researchers the really for you know bad year so you have a bad year your expenses out are higher than your income and so you that you have a hole in the deficit and that particular you need money to draw from to help pay for that that's the the fifth one I want we really try to avoid using and where if at all possible because that really is difficult to replenish as you'll see as we as we look at some of the slides going forward the last is going to mention it so we're working with the board to help develop a a long and short term strategy for both A. S. MPC and part of that is just really trying to help them understand and develop what we were calling guiding principles you know what what are things that that board needs to have in place as people rotate on and off it to help them go back to and say this is important to us this is where we need to be this is how we're gonna get there whether it be one two three four five years. Okay next time we talk about is a state employee count. So one thing is what reminder these are these are projections so we're looking out Fairly long term for healthcare one year so you know they're certainly subject to a lot of assumptions the data can change from from month to month as we get new information and so that they are certainly substance change and they will change and or the the the accuracy of the projections are only as good as the assumptions that we have in and with cove in the pandemic you'll see that that makes things even more difficult as we try to project was going to happen in twenty twenty one. So for both AC and PSE what we were using to as our core data set is claims that in March nineteen to February twenty twenty so what you're recognized about that it's it's the medical claims are pre coated so what we saw in the spring and the summer was the claims reduce significantly especially in the spring as people sheltered in care deferred sheltered in place deferred care avoided Care we're seeing a little bit more that now with the second wave coming through so we don't want to use that data they had the impact of the compendium Act to it to be any kind of indicator of what might happen twenty twenty one so we use pre prep pre pandemic data the project twenty twenty one for pharmacy we did that for a couple months and then as we got into the summer months it looked you could definitely tell that the pandemic was not affecting pharmacy costs the you didn't see the drop in the spring you didn't see the drop in the summer it just continue to to move along as people fill their prescriptions so we're using the most recent twelve months of data that the project are pharmacy data which is good because the further away you are from our base data to our projects and per the more volatile things get so the closer we can get to those two projects and per is a more recent data we can use the more accurate those projections should be. Okay so now to jump into twenty twenty. So that the four twenty twenty the board set aside twenty five point one million dollars from the prior year surpluses to help with funding. After applying at twenty five point one million to the to the county or twenty experience we're estimating there's a surplus of around five hundred thousand dollars so if you think about that like a checkbook your income. You're out cut your expenses and then this this Exter NO texter funding from from your savings account is like almost like that is we we netted five hundred thousand dollars for the county From from a of a more broader perspective the end the allocate assets are eight point nine million dollars so what I think about that is like your savings account so you have a your checking account over here we made five hundred thousand dollars we can put that in our savings account and now we have eight point nine million dollars the key thing there is it's unallocated assets so the board hasn't earmarked out for any other purposes so they haven't they haven't said that's and that's before we look at the catastrophic fund that's before we've looked at pre funding any of future years premiums. Okay and so like image before we we we we we adjusted the claims for Kobe to try to make sure that we work over underestimating the claims as we roll through twenty twenty and so we want to make sure we are properly reflecting the pent up demand deferred care as we what got later and later and later in the twenty twenty so feel more more comfortable as we get real data that that the twenty twenty twenty twenty twenty one numbers are are are getting closer to to being finalized. And then as a role in the twenty twenty. Some of it I'm twenty twenty one summer to twenty twenty the board your mark fourteen one and a half million dollars. In and assets that can be used to help fund twenty twenty so that those are offset the cost to help reduce either reduce call funding by the employees or by the state. In twenty twenty we're showing a deficit of four point eight million dollars so in our checkbook for twenty twenty one we we spent more than we had so we're at a loss of four point eight million dollars so what happens then is we had eight point nine million dollars at the end of twenty twenty. We can take that four point eight million dollars and pay for that from that free asset in twenty twenty so now we're down to like four million dollars which is really low and that's a very thin thin margin of error in our savings account and we'll talk about that a little bit more so for twenty twenty one There's the assumption there but basically we increase membership somewhat of what it has been in the past trends have been about five percent for medical on eight percent for pharmacy and those ARE NO transits you're over year as we project that going forward and that reflects all the Board actions in the September twenty ninth board meeting that are that are shown above the year if you should be familiar with that that we talked about last time so once in a lifetime on those. So here's the here's the plan experience for a ceasing kind of see what looks like a numbers so if we look at twenty twenty. the blue line there that's showing total income so that's what the state contribute that's what the employees contribute and that's what that's other income any other income is things like pharmacy rebates RTS is the government subsidy for the Medicare retiree pharmacy coverage and then investment income and then small some smaller things so we're we're showing we brought in two hundred ninety two million dollars in twenty twenty to go download it further you can see we spent three hundred seventeen point five million so Prior to any kind of funding from our savings account we lost twenty four point six million dollars we bring in that funding amount we're about base they break even at a half a million dollars now the roll for the twenty twenty one. Our funding goes up and that's driven by two things one is the the increase in the budget amounts from four twenty to four fifty that that that was approved. The employee contributions go up for the five percent increase across the board and also the reduction in the wellness credit from thirty five dollars a month the fifty dollars a month the revenue went up in twenty to twenty one but our expenses also went up just because of healthcare costs are going to go up so if nothing happens during the year your healthcare costs going to go up so we need to use those five levers to offset those increases so we can either increase our funding or decrease our cost to to offset those those trends from year to year so again before we have any applying to the prior year funding we're at nineteen million are lost we applied a fourteen million dollar additional funding amount so we're showing a five million dollar loss there for twenty twenty so we are twenty twenty one so we would need to dip into our savings account to help pay for that. Right now I know one thing we talked about in the last last time was here was was looking ahead another year. So here's a a high level look at twenty twenty two. And I had the assumptions listed there on the right there they're very similar to what we used to project one eight twenty one and so we're projecting a loss in twenty twenty two of of just over thirty four million dollars you and and you can see there's a there's six million dollars in funding there that's that's again allocated from prior surpluses that the board set aside but that's that's much lower than it has been in prior years because there haven't been consistent surpluses year over year over year. So that is AS the I'll stop there for questions well the what went in it and we're not gonna have time to probably goes terribly deep in this afternoon but you know looking at the bit the program I think everybody knows that it that was not necessarily the prescription drug program that was the problem and and the high cost it's really the medical claims but I know that that that's it I'm sure that it looked and appeared to be an easier space to make changes act is that a good assessment I don't a certain degree that it's the medical and I think it's the funding I think I'm under this before has not kept pace with the increasing cost and and and and medical claims are part at increasing cost. And again there be another time deducted that even deeper I think into it but I know that the medical claims seem to be when I've seen some of the stuff broken out I'll just say that most of the of the time the assessment was it really wasn't the pharmacy claims that was the ultimate cost driver it seem to be on the medical side and I know you may disagree with that some but at that that is what was the feedback and and obviously it's a matter of what the board decided to do and where they decide to make changes and all that I also noticed that you know with the of the wellness side of things of course that's given up depending on who qualified or don't qualify I think it's three hundred dollars a year the Senate back into that yes and I know you came in and you're you're kind of back into this the seat again but and I think sector filter would agree that the biggest problem is that it seems like the suddenness of all of a sudden we've got a problem and and so I think that occur some when you begin to take your perspective in your metrics and you apply that as opposed to maybe the previous is that a good way to say that. I would agree with your statement there's a lot of factors that went into what we got to this point but I would agree with your statement yeah and so okay I what you proceed. Okay for PSC then up summer presentation same date or using I was going to point out the highlights here since we're we're we're certainly runs for a time but For twenty twenty we're projecting a deficit of three and a half million dollars now that that that could come back up closer to break even because as I said the the thank the savings from the Kobe AD you know we're still projecting the fourth quarter and you know what we seen in October might imply that our projection is a little bit high so we could see that there could be some additional savings from from cove it it's not baked into our projection so weak I could see twenty twenty coming coming close to break even but but we'll see in a couple months the one they will point out to is that you will it we're down to two point one million dollars non allocated assets and PSE. So even even lower than what A. S. E. and as we move forward into twenty twenty one. We're projecting a deficit of twenty seven point two million dollars. And that that means that we don't have enough cash on hand we would have to dip into the catastrophic reserve. to help fund that for twenty twenty one. but here's the board action for April it was made to the wellness teens posted as no deal we funding and as we look at that the actual numbers like I said before there's down the bottom centers the three point five million dollar loss it's being help offset by twenty five point three million dollars in pre funding the twenty seven million dollar loss in twenty twenty one is being offset by fifteen and a half million dollars that are pre funded by the board so PSC's been running running pretty hot and and when we came in we saw the trends. The trends on PSE on medical have been higher than ASC for AC we're seeing things in the five percent before cove it for PSE they were they're getting close to double digits in terms of how fast medical trends are increasing year over year. Thank you sure you blown the whistle on PSC is that what I'm hearing okay. well obviously I think it's going to require another session hit hit another point it may be my my interest in co chairman taking a nap with chairman Hendren when they come in to dig deeper into this in this issue again members or any questions on this at this time. Saying no questions we thank you for bringing the update maybe we wish we had got the bad news but we would certainly glad that it is on the table and so that we can begin to look at it again and I'll say this state this I've said it before and there's going to be a lot of things lost but it on these issues I personally believe that the state of Arkansas has to decide. Are you going to make good on being an employer or not. And we're in a situation where I feel like we're gonna lose good employees and be hard to attract and retain good employees if there is a situation where they think may they may lose benefits or if they are retiree that suddenly after working thirty and forty years that benefit will be taken away from them it's all about the money we have to have money to pay for per pay for any benefits but I think the state of Arkansas and I would I would encourage governor Hutchinson to be a really strong party working with the legislature on what we're going to do because you just have to provide fundamental benefits if you're going to be an employer and and I hate to see us get in a situation where I see a employee employee previous employee that I've talked with before that's in the room today very sharp man gave a lot of years to the state of Arkansas we've heard from them and you know they feel really you know really upset about the changes and so you all sector features meant to find a way to to pay for this and take care of the cost but at the same time we would love to I think many legislators would love to be advocates with you to make sure that we we realized if we're going to have basic fundamental benefits that have been pledged employees they've given up many years with high salaries they could have taken in the private sector to work for the state of Arkansas. The first thing that go should not be those those benefits we actually should should cover those that's just a personal perspective I think it's a a new perspective integrity frankly these people have given some of thirty forty years and it's just hard for me to sit here and and and see that some of those retirees are the ones that are taken on the chant but it's same time we know that you've been given a job to try to make it pay for itself and I just feel like I need to make this statement again as a challenge to all of us on what's important what we gonna do so the certified your anything for you leave I just want to say thank you senator Rapert and we do look forward to working with the legislature in the session to find a fix we appreciate your service we know that you've got a very challenging job and thank you for your time here today Sir thank you all right members that brings us to item number S. or Adam letter enough and that is discussion of a PBM audit Roger Norman Tom Billington Kevin White and what I will say is they should begin to take their seats that this is something we had requested a long time ago it was interrupted briefly with the covert situation and then there was some changes there with the Arkansas insurance department so look forward to an update on this Mr Norman you and the team a recognized you're welcome state your name and who you represent for the record and you'll be closing out our day thank you Mr chairman my name is Roger Norman I'm the legislative auditor for the state. And I'm tumbling conducted legislative alter or state agency section thank you. Name is Kevin White I'm assistant legal counsel an auditor with legislative audit thank you you're recognized thank you Mr chairman as you're aware of the legislative audit got involved in the PMR role PBM report in may and June of two thousand and nineteen it was discussed in our executive committee and in June we were given the direction to look at the PBMs and how they're operating in Arkansas and on on those that deal with the public funds there were four different items that we're looking at the Medicaid fee for service Arkansas Works the past system in the BT of we have a lot of general information gain primarily we were working directly with the insurance department communicating with them and I think that we have a very good working relationship with them as you are aware they entered into a contract with the. Consultant to come in and look at some of the PBM data and so we have held off until that report was prepared I think it additionally maybe came out in this summer was officially released in September and at that time we were given the direction to go back in and and pick up on the PPM report and so we're we're just now getting started in fact we're trying to finish the cap for the single audit and is probably going to be right after the first of the year to where we're going in and looking at that data and having the opportunity to finish our report. Pardon me while I take a drink sorry about that Roger. Is there anything else you're prepared to share on this today here's AT and no Sir I mean we you be premature a as far as our journal report I think a lot of the things I've been previously said are contained in a draft report that we have which is basically more informational wind and we're just now hopefully after the first year to get into the data to look at to look at the spread pricing to look at these items that have also been discussed here so we we hope to of to get online and be able to bring in the in the spring the the report back you may not be our final report but we also gree that this the resolution of the lawsuit we hope that that's the the the first ripple effect of well bringing things back and making changes in the PBM market well I do hope that year you bring it to conclusion and you know I just the foundation of the concerns has been many other states and we saw what they revealed in their states and and they found tremendous cost savings that could be achieved in in those issues and so what I've what I've always said is let's take a good hard deep look at this and let the numbers do the talking either it It is good need to take further attention if we don't need further tension in our state in these programs will be one of the few in the nation because most of them they have found a lot of issues that they needed to address and I think you've read some of those reports yes Sir with that members if there are no other questions I don't see any anything else from your team. Saying nine with that we appreciate your time today and we are Jr.