Transcript
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00:00
Venky
Hello and welcome to the next edition of Pacesetters. My name is Venky Ananth, Senior Vice President and Head of Healthcare Business at Infosys. Today I have a very special guest, Jim Graham, Senior Vice President and Chief Information Officer at Prime Therapeutics. Prime Therapeutics is a major player in the PBM business; Pharmacy Benefits Management business. Now, Pharmacy Benefits Management is a very interesting business where essentially health plans, drug manufacturers, and pharmacies coming together to serve the patient. And this is an interesting business because PBMs enable essentially availability of medicines to patients at the right time, at the right place, at the right price. And this is where Prime plays a very major role. In fact, Prime is owned by about 18 not-for-profit Blue Cross Blue Shield Association health plans. They serve about 33 million members in North America. And last year, they actually served to process more than 400 million claims. So they're a big player in the marketplace. And within that, Jim essentially is the senior leader from a technology perspective who is powering this digital transformation at Prime.
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01:26
Venky
Now, I've known Jim for about at least six years now, a major player in technology and driving digital transformation. True to the name of Pacesetters, he's setting the pace of transformation at Prime. Now, Prime has also recently done a game-changing acquisition with Magellan Rx. And Magellan Rx is actually a deep specialist in medical management. And I want to talk more about it, essentially around drug management and how they bring that to bear to benefit members. So with that background, I'm going to welcome Jim. Jim, thank you so much for joining us.
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02:08
Jim
Well, thank you, Venky, and thank you for coming to our Prime facility here. It's been a great relationship over the six years. And if I reflect back on Infosys, we've been together now for almost 10 years. And today we have 130 of Infosys Consultants with us, over 100 in the quality sector alone, both onshore and offshore. So I really have appreciated the relationship. I also appreciate the invite to Pacesetters. So I look forward to the conversation today and talking about the PBM industry. You did a great job of advertising what it is. It's not always easy to explain. So I appreciate how you set it up and it's a great way to start.
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02:49
Venky
Thank you, Jim. Thanks for doing this first off. And like you said, it's been a great run for us working with you. And over the years, we've become great friends too, and I really appreciate that relationship with you. So let's dive right in, Jim. First question, look, PBM started off as an entity out of health plans just to essentially do pharmacy claims processing. And over the years, it's evolved into fairly sophisticated stuff, right? You essentially do now outcome-based contracts, you do utilization management. You essentially do a whole lot than what you used to do. And it's getting more complex and more sophisticated as we go by. So tell us where you think this market is heading and how Prime is essentially bracing yourself to be ready for the future?
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03:49
Jim
I'll reflect back a bit. I've been now in the industry for 10 years, and when I first started, the pharmacy spend of the total health care system was about 15%, roughly. And today we are 30% plus. And as you think about drug costs, drug costs are becoming higher and higher and higher. A lot of research into oncology drugs autoimmune drugs and other special disease sorts of drugs. And we're becoming larger and larger spend of the healthcare ecosystem. So there's higher scrutiny on costs. And how do we maintain a good reputation in the industry? So think about that as the context for how I'll continue this answer. As we think about 30% of the total health care, the health plans themselves are very interested. Members are very interested. It's getting more and more sophisticated, which drugs to take, generics, brand names? Should I buy 90 day's supply? Should I buy 30 days of supplies? The PBM really helped to navigate the system, helped to maintain ethical regulatory compliance, and helped to make sure that our members get the drugs they need at the right times. If you think about it, you're sitting at the pharmacy counter.
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05:15
Jim
We're able to send you a text to say, instead of getting a 30 day branded supply, maybe you should think about a 90 day generic supply, real time information at the disposal and at the point of decision-making for a member. That's really what we aspire to do in the future. And we're knocking on that door now. And we're able to put together medical information, pharmacy information, and really be much more than a pharmacy claim-paying transaction, but really to use that data and knowledge to provide real-time drug-making decisions for our members to help them be healthy. That's really where the PBMs are helping and to make sure that we maintain a good cost structure overall that's affordable for our clients and our members.
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06:03
Venky
Drug prices, affordability, very close to the heart for tons of people. Now, Congress recently passed the Inflation Reduction Act, and one of the key pieces in that Act was all about essentially empowering HHS to either negotiate drug prices directly or even put a cap on co-pays for Medicaid party participants. So I just want to hear from you, your perspectives on how the PBM market is reacting to this, how is Prime taking this. Any thoughts on that?
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06:42
Jim
Yeah, that's a deep question. HHS, first of all, it's Human and Health Services. It's a part of the federal government that maintains a watchful eye on the health and outcomes of our overall society. They have put regulatory restrictions on, and what they want to do is make sure that we're capping prices to the extent that they need to, regulating prices. And one thing I will tell you from a Prime and our acquired company Magellan Rx, we have a great relationship and a great reputation in the industry for being compliant and trustworthy to our members and our clients. So I'll start there. Second is, we are different than some of our competitors in the fact that we are very transparent on our pricing, and we want to make sure that our members and our clients know what the pricing is. So we welcome these sorts of changes. Our job in this new inflation transparency act is to make sure that we are compliant. We're providing good options for solutions on how to bring these to life for the government and make sure that we are providing that transparent prices over to our clients and members. And that's really what this is all about. It's affordability, transparency, and having our members get the right prices on the right drugs.
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08:14
Venky
Perfect. That brings me to the next question, Jim. One of the key things that's happening in the business is about digital being the primary channel of accessing some of these medicines. And mail order, for example, is becoming mainstream, and that helps you, of course, control cost too. So how do you see the intersection of digital transformation that you are actually driving to the market trends, including regulatory needs? What's your perspective on where this is heading, especially from a Prime perspective? Because you're also focused on a lot of integrated drug management, and that's something that you guys specialize in. So I just want to get your perspective on that.
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09:01
Jim
Great question. In digital, we really classify ourselves as we're a technology company at heart. And we're providing a lot of knowledge out to our clients and members. At the heart of what we do where we have a ton of rich medical and pharmacy data from our members and clients, and we utilize all of that information to help provide that drug-buying decisions at real-time points of interaction. So as you talk about digital, digital is paramount to what we do. And whether it's paying claims, whether it's getting information out to the members at the point where they can make those drug buying decisions, whether it's looking for trends in the industry and trends with certain drugs or trends with population classes, we're coalescing all of that information using AI, ML, all of the modern tools and techniques to help comb through millions and millions of terabytes of data to get the best information possible. And that's really all about digital transformation and leveraging all of the rich sets of data. At Prime and Magellan Rx, we have the luxury of having good medical data and good pharmacy data and intermixing that together to really bring those trends to life and really help our members to make the best decisions possible for their health.
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10:31
Venky
Fantastic. I do think that one of the biggest challenges that PBMs have usually is to actually do what you just said, bringing together these two universes of data, which is- your pharmacy claims and medical claims. You're able to pull that together to actually drive new insights, especially using AI is very interesting. Now, I want to get to a specific use case which is really around fraud, waste and abuse. This is a big problem in the industry as we all know, particularly in PBM space because pharmacy claims, unlike medical claims, is a lot more complex because you don't have the associated medical diagnosis associated with the pharmacy. So how are you approaching this? And this can particularly be a drag on your... It can be a revenue leak, it can be a drag on your profits. So how are you how is Prime and how are you driving it, particularly using the technologies that you just spoke about?
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11:35
Jim
Yeah, fraud, waste and abuse, it's a big topic in our industry today. And thankfully, Prime is known and has a great industry reputation, again, with how we provide fraud, waste and abuse services and trying to minimize and eradicate some of the bad players in the market today. So we have services that look at prescribers. We have services that look at members that are abusing the system and clients that may be abusing the system as well. In fact, we have had fraud, waste, and abuse services over the last six, seven years that we've had a formal program. And we actually outsource this. Last year, we introduced AI and ML into our algorithms. And to date this year, we have a $58 million savings in fraud, waste, and abuse, which we're super proud of. Amazing. With AI and ML specifically, we were able to cut some of... We have a specific use case where we shut down a pharmacy in 30 days. And it was a $500,000 savings, and that we were able to shut them down. That was through the use of AI and ML of going through all kinds of data, looking for trends on this specific pharmacy, working with the outside authorities, and we were able to shut them down in 30 days.
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12:59
Jim
In the past, it would have taken us three months. But with the use of modern technology and combing through, we have good medical data, as I mentioned, as well as the pharmacy data and looking for those trends and looking for the bad actors and threat actors out there, we're able to figure out that we've had a bad pharmacy. That was a specific use case. Like I said, to date, super proud of we've been able to save $58 million this year. That's in 2023. This year alone and fraud, waste and abuse. And throughout the rest of the year, we'll find more. It's a huge topic in our industry. You see pop up pharmacies that are illegal pharmacies. They're putting in illegal drugs and they're making illegal drug prescriptions, and they're looking for claim payments. You put them down on one side of the block and they'll pop up on the other side of the block next. So you got to stay modern in how you're tracking, trending, and working with the authorities and shutting these entities down that are bad actors.
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14:12
Venky
Perfect. Look, I want to get a little personal here, Jim. You were recently sharing with me, it's been about a decade since you joined Prime, it's been an exhilarating journey for you. Tell us about your own evolution in terms of how the digital journey has evolved and what are you looking forward to in the coming years that's going to really give that competitive edge for Prime from a market perspective, leveraging technology given that you made an interesting comment that you look increasingly of yourself as a tech-led firm. And so I just want to hear from you from your own unique perspective.
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14:52
Jim
Yeah, it's been 10 years and it feels like I just joined yesterday. To be honest, it's gone by super, super quick. We've done some amazing doing things in 10 years and I get the great ability to work with a phenomenal staff and leadership team every single day. And that's business and IT. I'm humbled about that every day. As I reflect back, I've been in the industry, the technology industry for 30 plus years, and I joined Prime 10 years ago for one specific reason, and that was to make health care a little bit better when I leave it than when I entered it. And it gets a little... You asked about personal. The reason I joined Prime was my oldest boy now had a medical problem when he was just a baby.
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15:45
Jim
We were passed from physician to pharmacist to doing labs on his stomach, brain scan, heart scan. And they couldn't figure out why he was throwing up three times a day, basically after his feedings. And ended up in the hospital and they were able to figure it out. The Children's Hospital in Minneapolis, an amazing hospital. They figured it out in two hours- what was going on. He had Pyloric Stenosis. It's pretty common in boys, one out of a 1,000 boys has it. And they brought him into surgery the next day. A very easy surgery. For a new parent, it wasn't very easy, but it's a very easy surgery in today's standards. And they were able to fix the condition. And from that point forward, he was a healthy baby. But for the 10 weeks prior, new parents going through the situation, it was tremendous. And it left very much an imprint on me that I still hold today.
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16:48
Jim
While I think healthcare in America is the top in the world, we still have a ways to go. And passing records from one physician to the next, there isn't... It's not great today. You go to the lab, they don't know exactly what's going on. You go to the pharmacist, they don't know exactly what's going on. And it just was a big imprint in me and my journey over to Prime. And that's really why I landed at Prime. If I can help make health care a little bit better in the future, great. So I'll start there. That's why I landed at Prime. I think the next part of the question is, what do I want to do? What can I help with Prime? Prime is phenomenal and I think with the acquisition of Magellan and being asked to lead the technology arena with a thousand great technologists, another 400 plus consultants today. We are really at the heart of what Prime is all about. We're transforming a lot of our core platforms as we sit here today. We have unparalleled growth in the company and new clients, existing clients with new products, RFP pipeline, is very solid. We're moving platforms over to a consolidated infrastructure, moving to more cloud-based technology, AI ML. From my perspective, I pinch myself every night and I'm super humbled with the great leadership team that's around me, and I'm only as good as they are and working on some of the most brightest minds in the business.
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18:34
Jim
There's nowhere to go but up from where we're at today. And I think our future is bright. The technology itself, being the fact that we are a technology-driven company and generating insights out to our members is really what we're all about. So they can make good health drug buying decisions. There's so much better we can do, and I think we have the right team to do it, and it's going to be going to be a fun role in over the next 3 to 4 years.
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19:03
Venky
Fantastic. Now, first off, how come you never shared with me that personal story? That was a fascinating story. So, thank you so much for opening up and sharing that personal story. And what's most exciting and interesting about healthcare is that, each one of us have our own personal stories because it is real. It touches us in real life to ourselves, our near and dear ones, and enough friends and family. So, thank you for really really sharing that personal story. It makes it all more impactful and how real it is for all of us. And exciting times in terms of how you're bringing together technology, your own ability to connect it with the needs of the members and of course, what's happening in the world of PBM and the healthcare ecosystem. So thank you so much for sharing with us, Jim, and hopefully everyone enjoyed this deep conversation with Jim. Thank you so much.
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20:01
Jim
I appreciate it. Thank you.
