The Bottom Line Pharmacy Podcast: Unpacking Drug Pricing, Integration, and Pharmacy Opportunities 

In this episode of The Bottom Line Pharmacy Podcast, Scotty Sykes, CPA, CFP and Austin Murray with Sykes & Company are talking about all things PBM related with Dared Price from OreadRx.  

Join us as we discuss the:  

• Urgent need for transparency and reform in the industry 
• Intricate world of Pharmacy Benefit Managers (PBMs) 
• OreadRx self-sufficient and transparent PBM model  
• Opportunities for Growth in Pharmacy 

ASK A QUESTION

More resources about this topic:  

Schedule an Rx Assessment

Podcast – Navigating Pharmacy Reimbursements and Negotiation Strategies 

Podcast – Finishing the Fight: What’s Next for Independent Pharmacy 

Podcast – The State of PBM Reform 

Advocacy – NCPA Finish the Fight Campaign

If you prefer to read this content, the video transcript is below:

Scotty Sykes, CPA, CFP®: Well, welcome everybody to another episode of the Sykes Bottom Line Pharmacy Podcast. We’ve got Austin in the chair today taking over Bonnie the star of the show who’s out with her graduating children or child I should say and then we have Dared Price Independent Pharmacy Owner, owner of a PBM how do you pronounce that again?  

Dared Price: It’s Oread. Oread Rx.  

Scotty Sykes, CPA, CFP®: Oread Rx, Past President of the Kansas Pharmacy Association, also involved in the NCPA leadership there as well. So, Dared, we appreciate you being on and taking some time to share some information with our listeners today. 

Dared Price: Absolutely, thanks for having me, I appreciate it. 

Scotty Sykes, CPA, CFP®: Yeah, so why don’t you, why don’t we just kick it off and kind of give us a background of, you know, you, your independent pharmacy and specifically how you got into, you know, in the PBM business per se. I’m interested about that, yeah. 

Dared Price: Yeah, yeah, absolutely. So, yeah, so kind of just going back my background, so I grew up in Oklahoma, Western Oklahoma, small town out there. Had a mentor that was a pharmacy owner. I always wanted to do it. And so graduated from the University of Oklahoma in 2008. Got an opportunity to buy our first stores in 2010. My wife and I moved to Kansas during that time period. And we are business partners with Osborne Drugs. So, Bill and at that time, Willie Osborne. They’re two great mentors of mine and we started that partnership in 2010. So I’ve been a pharmacy owner for 14 years now, which doesn’t seem possible because I still view myself as 28 years old, you know, but… 

Scotty Sykes, CPA, CFP: I know the feeling. 

Dared Price: So, we started out, we purchased two pharmacies in 2010. Those were Graves Drug in Winfield and Graves Drug in Arc City. In 2019, we had the opportunity to expand closer into the Wichita, Kansas area. So, we bought four more stores in 2019 called the Dam Pharmacies, which is kind of fun. Bought them from a gentleman named Gary Dam. So, you know, you have a lot of fun with that. You go to the Dam Pharmacy to buy to pick up your Dam drugs. 

Scotty Sykes, CPA, CFP®: You go to the Dam pharmacy today? Nope, I forgot. Damn it. 

Dared Price: It’s a marketing thing, you know, but it’s kind of fun and then last year we bought Mulvane Pharmacy in Mulvane, Kansas Which is also kind of a suburb of Wichita which brought us to our seven independent community pharmacies that we that we have today. So that’s kind of my pharmacy hat and then on the PBM side, you know me and three  other independent community pharmacists here in Kansas got together. Actually, they got together before I joined in. And we see all the bad things that happen in the PBM world. And you know, we were very frustrated with the legislative process like we all are. And we just decided we’re just going to do it ourselves. And so we went down the road, formed some partnership with some others that already kind of had PBM and then just kind of got our feet wet, got in the, you know in the space and learned how to do it and then just have slowly grown to this point and now we’re kind of completely self-sufficient. And I hate even to call ourselves a PBM because we are truly 100% pass through, 100% transparent. Truly the model that I think if others were made to operate like OreadRx, pharmacy and healthcare in general would be in a much different spot today. So that’s 30,000-foot view of how I got to where I am today. 

Scotty Sykes, CPA, CFP®: So, you obviously have a lot of insight into the PBM side and what you guys are doing there is in terms of transparency and being upfront and clear with everything. So where do you see the current big PBMs? Obviously, they have a lot of ways and tricks that they’re doing things, what are maybe the top things they could do or Congress could do to help bring about that transparency and change in these PBMs? So, what’s kind of the low-hanging fruit here to get these changes that need to happen? 

Dared Price: Yeah, I mean, kind of there’s three big things I feel like. Transparency is obviously number one. I mean every employer group in America that is using one of the big three is getting completely fleeced. I mean when we go in and do RFPs and are able to do like our live reprice to show people, okay this is what you paid with your current PBM, this is what you would have paid with OreadRx, it’s almost unbelievable the amount of money that PBMs are stealing from employer groups. And so if that was transparent, maybe they would be able to make some better decisions. Two, rebates. I mean, rebates are what drive everything in the PBM world and to be honest with you, we don’t keep a penny of rebate. Everything that we receive from the aggregator is passed back along to the employer because we view it as their money. And we view ourselves as a true fiduciary of their money. However, the big three especially don’t operate that way. I mean, their formularies are driven by rebate dollars. Their PA processes are driven by rebate dollars. Basically, all their decisions are driven by rebate dollars. And you see that with Humira. You know how biosimilars came out that are a fraction of the price of Humira, yet the marketplace, I think the Big 3, you’re still using Humira 97% of the time, whereas our PBM is using Humira 0.1% of the time, and that was only because of a pediatric case where it wasn’t indicated to switch to a biosimilar. So that’s where you see that misaligned incentive on that. So, transparency rebates are kind of the big two that I would say. And then number three, vertical integration is the big one. It’s been hard for OreadRx to get into some places because you know self-funding and being self-insured. It’s not a new thing, but just inherently it’s kind of a scary term, and it really shouldn’t be I mean even traditional insurances operate under you know, they have reinsurance or stop-loss models that exist in the self-insurance space. So there’s a lot of misinformation around being self-insured and self-funded but if you’re not you know it’s hard to pick your partners you know and so because of vertical integration it you’re almost forced to use one of the big three PBMs at that point and and that’s not a good thing because money is shifted from one side to the other and just hidden in ways that you couldn’t even really comprehend and an employer group that just speaks in layman’s term on all this deal on all these things. I mean you just have no clue about how to even go about evaluating some of this stuff. And so, you know, the mission of our company is to kind of turn that all on its head and show people like the actual savings that are there when you switch from being traditionally insured by one of the big three to, you know, becoming self-insured, being able to pick your partners, everything being transparent, see where your actual healthcare dollars go and then come up with some solutions to mitigate some of that risk. So it’s been a really wild ride for me. So the PBM stuff has definitely been, I mean it’s the biggest threat, in my opinion, it’s the biggest threat to healthcare, not just to pharmacy. And to be able to influence that in a small way has definitely been the most rewarding experience of my career. 

Scotty Sykes, CPA, CFP®: Well, I liked how you said a key word there, Fiduciary. That you will not find anywhere in the big three. I mean that is.. 

Dared Price: CVS, I think the president of CVS is, or maybe the past president of CVS, sorry, I’m probably not supposed to say those things, but I think he is on record of saying that they are not a fiduciary, they do not act as a fiduciary. So, yeah. 

Scotty Sykes, CPA, CFP: So, you attended the White House Round Table. I gotta ask, is that just all show? Is something actually gonna come out of that? What’s your feeling on that? 

Dared Price: Yeah, we were very hopeful that it wasn’t all show. You know, anytime, I love the awareness. I mean, anytime Mark Cuban is in the room, I feel like that just brings a ton of people to the table, you know, that otherwise would have no idea about PBMs or what they’re doing, you know? And so if anything, I was grateful that it brings awareness to people that maybe otherwise wouldn’t have any idea what a PBM is. And you know, there was some really good discussion. There were some really great people in the room. It was kind of one of those things where you sit down and you look around and you’re like, I’m in the wrong room here. Why am I here?  

Scotty Sykes, CPA, CFP®: How’d I get here? 

Dared Price: But, you know, I guess that’s yet to be seen. I know the White House has been, you know, with some of the changes that are coming in the Medicare space, you know, there’s still some unanswered questions there, but at least they’ve been looking, you know, and I’m hopeful that, you know, we’ve got a window here between now and the end of the year. I’m very hopeful that something can get accomplished. I know NCPA is pushing so hard and doing everything they can with Congress to try to get something passed. So I’m hopeful that it wasn’t all for show, but you know, you have to wonder sometimes. 

Scotty Sykes, CPA, CFP®: Yeah. When we had, Austin, we had Buddy Murray on, I mean, Buddy Carter, not Austin Murray, Buddy Carter on the podcast a few weeks ago. And I, and I told him that the fact that there’s reform PBM signs outside of Capitol Hill is unprecedented. So that’s, I mean, that just goes to show you that, you know, the attention’s there is just got to cross that finish line. 

Dared Price: Yeah, I mean. 

Austin Murray: And the NCPA is also doing a lot of great work on the consumer side too in pushing the idea that, you know, the PBMs are driving up your drug costs. And so I think that that’s going to help as well because they just recently launched their Finish the Fight campaign where they surveyed a thousand customers and all of them, but they across the board, they care about their pocketbook. And so that’s the theme behind the message. I think that’s important. And going back to what you said, Dared, about Mark Cuban, you know, I think it’s great having a voice like that that can bring a lot of eyeballs and a lot of attention to the issue. So, I think that’s really important. 

Dared Price: Yeah, and it was great. It was great to me. 

Scotty Sykes, CPA, CFP®: Austin’s been trying to get Mark Cuban on our podcast. So Mark, if you’re listening. 

Dared Price: Yeah, I’ll send it to him. But it was great to meet Mark. And you know, I think as pharmacists, we’re inherently skeptical of anybody that enters the space and is trying to bring about reform, like what their motives are. But I can tell you in my dealings, because OreadRx does have a partnership with Cost Plus, and so we do business with them. And we know his team. And you know, even his team has told me, you know, Mark wanted to reform the PBM space and didn’t really care much about pharmacy or independent pharmacy when he started. However, fast forward to this point, his priorities have shifted from like, I’m going to reform PBM space as 1A, 1B, I want to help independent community pharmacy because he sees all of the terrible things that are going on in the marketplace specifically with independent community pharmacy. So, I was very impressed by him, and you know, from everything he said and everything that I’ve seen. He is truly pushing for reform in the PBM space, and he really wants to help independent community pharmacy. 

Scotty Sykes, CPA, CFP®: Yeah, so he obviously sees the value there at the independent pharmacy for sure. 

Dared Price: Absolutely, he does. 

Scotty Sykes, CPA, CFP®: So, Dared, you have your own pharmacy there. Tell us a little bit about maybe Graves drugs, right? And so tell us a little bit about the challenges and opportunities you see here in this current environment. We’re just getting out of the Double DIR fee fiasco. I don’t want to harp on that anymore. We’re past that. But what do you see as the opportunities ahead for pharmacy? 

Dared Price: Yeah. Yeah, I mean our biggest challenge is obviously the big three, you know, and we have to, I just did a talk on this last week to a group of grocery chain owners, you know. I just asked, you know, what’s the biggest challenge facing pharmacy? And you know, their answer obviously was the big three. You know, I mean, like the contracts that we’re getting put in front of us are unsignable right now. Specifically, here in Kansas, we’re walking away from one of the big three. And I mean, that’s 30 to 40% of my business. You know, and so it’s, they’re the PBM for one of the Medicaid plans here, one of the MCOs. They’re, you know, all the national plans and then, you know, the biggest commercial plan also in Kansas and we’re having to walk away. And so, you know, that’s going to cause a huge access issue and that’s, you know, not a good thing for consumers. And so, you know, what do you do at the end of the day? So obviously that’s the biggest challenge that we face. And, you know, I think pharmacy can really be a leader in showing people kind of back to what I was saying about being self-insured, because after I asked that group, you know, what’s the biggest threat, the big three, and I was like, well, how many people get their health insurance through the big three currently? And almost everybody raises their hands in the room. And I was like, why? You know, I mean, Mark Cuban said it best, like, the best way to beat them is to stop doing business with them. You don’t have to. I mean, there are other ways to be insured that are not through the big three. And it’s really not even that difficult to do. I mean, you get a good broker in there that knows what they’re doing to put this together and it’ll save you. I mean, we’ve seen 70, 80% savings whenever you do something like that. And I believe pharmacy can be a leader in showing people because we are businesses, right? I think pharmacy can be a leader in showing people let’s move away from the old archaic model where we just get money stolen from us and it’s not really insurance to you know, what would it look like if we use partners that were fiduciaries, you know and really did have our best interest in mind and you know,  what does that look like and every company that we’ve dealt with that has done that, that’s made that shift, has reaped the benefit every 100% of the time reap the benefits of what that new model looks like. So I mean pharmacy can be a leader in doing that making that transition and then talking to your employees or your communities you know your school districts your cities your local businesses show them what you did and talk about how it how it affected you and let’s make them let’s make a movement. You know, let’s move away from this outdated archaic system and move into something that’s actually healthcare-centric. 

Austin Murray: Yeah, Dared, one of the things you brought up at the round table, you brought up a case study of a school district that you worked with and just how much like cost savings that you were able to bring them just by simply transferring them over to a different PBM. And I thought that that was, that’s just very interesting that, yeah. 

Dared Price: Yeah, that school district in 2019. They were spending $900,000 on drug spend. We took that case over either in 20 or 2021. I can’t remember fast forward to today. Their drug spend. I was just told actually a few weeks ago is around $400,000 now, so almost cut it in half. Every year they’ve been able to give their employees a premium free holiday in December. So Merry Christmas. You don’t have to pay for health care this month. And then this year they’re actually getting a 16% decrease in premium. And so that’s the part that people don’t tie together is because PBMs are so good at using the guise of low copays. You know, we’re going to do $0 copays for everybody, but then they have no idea what they’re charging the health plan on the backside, right? And so all the employees are happy because they’re getting $0 copays. But what they don’t see is their premium going up 10, 15, 30% every single year and so you know an average what and a premium doubles like every six to eight years or something like that and so they’re very like I said they’re very good at shifting  money but people don’t tie together drug spend and premiums you know. So we’ve been able to reduce that drug spend and premiums have followed, whereas the big three will tell you if we decrease the drug spend, your premiums are going to go up. So we’ve been able to show the exact opposite actually. 

Scotty Sykes, CPA, CFP®: Wow, that’s powerful stuff right there. I know, Dared, I saw you on a webinar with NCPA at one point with kind of having your own insurance company. You and your wife do that. I’ve got another client that does that as well, a big group, and it’s pretty significant what I’m seeing in terms of the numbers. 

Dared Price: Mm -hmm. Yep. Yep. 

Scotty Sykes, CPA, CFP®: Can you kind of expand on that and kind of how maybe you got started in that? 

Dared Price: Sure. Yeah, I mean, I think pharmacies have been helping people choose. You know, the Medicare system is so complicated and it’s hard for me to understand it, you know, let alone a 85 year old widow, you know, like that has nothing to do with healthcare. And so, you know, we’ve been helping people with that for several years now and we just said, you know, why not become really the reason that we went down opening our own health insurance agency was because we didn’t really feel qualified on the supplement side. So we had a really good idea about how to help people with their Medicare Part D plans. But we were getting so many questions about, you know, other parts of Medicare as well. And so we thought, you know, why not open our own agency and, you know, actually get paid by some of the health plans for our time. Because we’re just doing all this for free. You know that’s  the way of pharmacy. Let’s just do things for free you know. So you know we decided let’s let’s open this let’s do it the right way. Let’s get all of this knowledge to be able to help people holistically with not just their part D plan, but all their Medicare and you know there’s just so many advantages of doing that you know builds a rapport with your customer base and trust. You know I mean they’re truly coming to you for all their healthcare needs, insurance, their drugs, and then other things as well. And so it’s been a really cool journey. Since then, it was just Renee doing it for a long time, but we’ve got another pharmacist that’s now doing it, maybe two more pharmacists that are doing it. And this year we’re gonna have two technicians become licensed health insurance agencies to just kind of broaden the amount of people that we’re to help with that. 

Scotty Sykes, CPA, CFP®: And you got to balance kind of the conflict of interest there, right? I mean, there’s you want to take the best care of the patient possible, but you also want to do what’s best for the pharmacy. You have to bridge that, I’m sure, right? 

Dared Price: Absolutely. There’s always a win-win in those type of scenarios. There’s always a win-win that you can find. And yeah, I mean, the frustrating part about that industry is there are so many bad actors out there that are just pointing people to Medicare Advantage plans because of the revenue that they generate from doing so. You know, I think you can get paid up to $700 for switching somebody to a Medicare Advantage plan whereas if you just put them in a regular Part D plan, you’re making like 70 bucks. And so it can be 10 times the amount. And if that’s your only revenue source, and I mean, again, PBMs do a really good job of manipulating those people as well to show, to make them think that Medicare Advantage is a great thing. Look at all of these different things that they get because of it. What they don’t tell you is your providers in the area are out of network, your hospital in the areas out of network, our hospital in the town where we live doesn’t even take advantage plans anymore. And so that can be really detrimental to their health care. And so, we really don’t recommend advantage plans at all ever. I mean, we do have people that are already there that we have to switch or whatever. And it’s different in rural Kansas than like, you know, Chicago or New York City where the coverage is just completely different. So, I’m not saying that, you know, all advantage plans are bad, but that’s just what we’ve seen in that industry.  

Scotty Sykes, CPA, CFP®: Yep. 

Dared Price: So it’s a balance too. So it’s just, the more you dig into healthcare, the more distrusting you are of just the way things are. I mean, there’s just so many things that should be criminal, especially on the PBM side, that just people are just grossly unaware of. And that’s the reason why I’m doing what I’m doing. And hopefully, you know, it can make a difference in the end. 

Scotty Sykes, CPA, CFP®: I see those PCMA videos they’re pushing out now, why PBMs help this and help that, and you’re just like. 

Dared Price: Yeah. Complete lies. I mean, it’s all a lie. And I think, you know, that’s one of the reasons also that I got into the PBM world is I want to be able to refute those. I mean, we have a hundred employers that can say the exact opposite I was being stolen from for years. And now that I switched to an undue self-insured plan, you know, now my claims account has over a million dollars in it. I was at a meeting last week, it was with a congressional member actually, and one of the people that was in the room was a physician, and Oread took over the PBM space for his clinic a year ago, and they actually own a pharmacy as well that’s in the clinic, and they were saying, from the pharmacy standpoint, my revenue doubled, so with this traditional insurance, I was making $6 a claim. Now I’m making between $12 and $14 a claim. Overall, my patients’ co-pays on this plan have decreased. They went from $19 to down to $16. And I have a million dollars in my claims fund that I didn’t have last year. That would have just gone into the health insurers’ pockets, basically. I mean, that’s the power that we’ve seen when you do something different than what just is traditional insurance. That’s the power that it can bring. And he knows exactly where all his healthcare dollars are going. You know, and so that’s where we have to get to as a society. We’ve got to do everything that we can do to educate employers. And I truly believe that pharmacy can be the igniter of that. If we all stop doing business with the big three on our health insurance and lead the way and showing others what can be done, I just believe that that could be really powerful. 

Scotty Sykes, CPA, CFP®: That would speak volumes for sure. No doubt about it. 

Dared Price: Yep. You’re talking about thousands of businesses across the country. 

Scotty Sykes, CPA, CFP®: Just like Mark Cuban says, I mean, he’s right. If you keep doing business with them, you know, it’s going to keep going. It’s just the money talks, money talks with the PBMs. 

Austin Murray: Yeah. 

Dared Price: Once you say it out loud, if you owned a business, would you do business with the person that’s trying to put you out of business? 

Austin Murray: Right. Right. 

Dared Price: I mean, why would you do that? Doesn’t make any sense. 

Scotty Sykes, CPA, CFP®: It doesn’t. Well, Dared, I guess we got to do the bottom line segment, Austin. Bonnie usually kicks that off, but I’ll kick it off today. Dared, we do a bottom line segment, kind of summarizing the podcast. I’m gonna let you kick it off, kind of give our listeners here a take away, a bottom line, if you will, and finish us off here. 

Dared Price: Yeah, and I think I’ve said it probably 10 times now on this podcast, but let’s stop doing business with the big three. I mean, the bottom line is look at your own business and what you’re doing for health insurance. We’ll look at doing something different, and be talking to employers and your, the cities, the school districts, the counties, the employers, be talking to them in your community about how they can do because they’re all complaining about their health care costs. You know, bring them some solutions and show them what is actually going on and work with a good brokerage, work with a good PBM to be able to shine some light on what’s actually happening. And I believe if we can do that collectively as an industry, then we can really start to turn the tide here and win back market share of the PBM space. 

Scotty Sykes, CPA, CFP®: And that’s a good bottom line. It’s a tall order, but hopefully, you know, things continue to evolve and change and move in the right direction. So I’m hopeful. I know a lot of pharmacies are hopeful and see opportunity out there everywhere. So hopefully we see that change happening sooner rather than later. But of course, then we got the election coming up. So Lord only knows. But… 

Dared Price: Yeah. 

Scotty Sykes, CPA, CFP®: Well, Dared, thanks again for taking time to be with us today. Appreciate all you’re doing in the pharmacy space and leading the charge there. And hopefully we’ll get you back on sometime soon, or we’ll see you out there on some trade shows.