Episode #234: Why Transparency in Pharmacy Benefits is a Leadership Imperative with Justin Jasniewski

Justin Jasniewski, CEO of Serve You Rx, breaks down one of healthcare’s murkiest corners—pharmacy benefit managers (PBMs). In this episode, he exposes how PBMs sit at the crossroads of drug manufacturers, employers, and pharmacies—often inflating costs instead of controlling them. With plain talk and sharp insights, Justin walks through how the system evolved from a simple IT add-on to a high-stakes financial engine that can either serve or exploit employers.

He highlights the fiduciary responsibilities employers often overlook and the lawsuits now surfacing when health plan mismanagement drains employee benefits. Justin stresses the importance of understanding what your PBM is really doing with your money and lays out how transparency and better contracts can unlock serious cost savings—sometimes enough to fund new hires or expansion without touching top-line revenue.

This episode is a wake-up call for business leaders: your PBM could be silently bleeding your budget. The good news? You can fix it—and Justin shows you how.

Want to learn more about Justin Jasniewski's work? Check out their website at https://ServeYouRx.com.

Connect with Justin Jasniewski on LinkedIn at https://www.linkedin.com/in/justin-jasniewski/.

Key Points with Timestamps

[00:51] Justin’s path from cheese store to CEO of Serve You Rx
[03:44] Decision to pursue MBA at Kellogg and its lasting impact
[06:06] Completing a triathlon and building habits of discomfort as a leader
[07:28] What is a Pharmacy Benefit Manager (PBM)? A simple explanation
[09:13] Why PBMs are seen as villains—and what that means for employers
[13:18] PBMs operate like banks—handling money between parties
[15:05] Fiduciary risks for employers managing self-funded health plans
[18:18] How bad contracts lead to lawsuits over drug pricing
[21:07] Rebates: why PBMs may profit off patients instead of protecting them
[26:00] Big PBMs exclude competing drugs in exchange for rebates
[27:58] Justin’s advice: how business owners can slash drug costs without cutting benefits
[29:07] Why a smarter PBM strategy is better than chasing new revenue
[31:12] Final takeaway: choose transparency and reinvest in your business

Transcript

00;00;00;00 - 00;00;30;20
Craig Andrews
I was in a coma for six weeks while the doctors told my wife I was going to die. When I woke up, she told me the most fantastic story. My team kept running the business without me. Freelancers reached out to my team and said, we will do whatever it takes. As long as Craig's in the hospital. I consider that the greatest accomplishment in my career.

00;00;30;23 - 00;00;51;10
Craig Andrews
My name is Craig Andrews and this is the Leaders and Legacies podcast where we talk to leaders creating an impact beyond themselves. At the end of today's interview, I'll tell you how you can be the next leader featured on this show.

00;00;51;10 - 00;01;09;15
Craig Andrews
Today I went. Welcome, Justin Jasniewski. He started as a analyst or an auditor with Serve you RX and eventually rose up to become the CEO. Took a little break in the middle to go bust at 4.0 at the Kellogg School of Business.

00;01;09;15 - 00;01;17;10
Craig Andrews
But why it matters is serve you is something called pharmacy benefit manager and or short.

00;01;17;10 - 00;01;32;27
Craig Andrews
They call them PBMs. And why is things in the system that's driving up the cost of company sponsored health care. And it can sound complicated, but it doesn't need to be. And so what we're going to be talking to,

00;01;32;27 - 00;01;41;11
Craig Andrews
about today is just understanding what that is, why that's driving up the cost of health care and what business owners can do to help,

00;01;41;11 - 00;01;43;05
Craig Andrews
get that cost under control.

00;01;43;08 - 00;01;59;08
Craig Andrews
Now, hopefully we'll learn a few other things about Justin. He, apparently he's done a triathlon and has a a background in cheats. So tune in. Justin, welcome.

00;01;59;11 - 00;02;01;04
Justin Jasniewski
Thanks for having me, Craig.

00;02;01;07 - 00;02;04;09
Craig Andrews
All right, let's start with the cheese. What's the deal with the cheese?

00;02;04;12 - 00;02;10;26
Justin Jasniewski
So for the first five years of my life, I lived upstairs from my grandparents cheese store.

00;02;10;26 - 00;02;18;04
Justin Jasniewski
West Allis cheese and sausage. And instead of going to after school daycare,

00;02;18;04 - 00;02;20;10
Justin Jasniewski
we were put to work in the cheese store.

00;02;20;10 - 00;02;28;18
Justin Jasniewski
My brothers and I. And my job was to destroy carbon copy receipts because there were a few thousand of them every week.

00;02;28;21 - 00;02;37;13
Justin Jasniewski
So a lot of experience around cheese. I know way more about cheese than I ever wanted to, and it's probably the most Wisconsin thing about me.

00;02;37;15 - 00;02;42;11
Craig Andrews
I'm wondering if we're going to reach a point where nobody knows what a carbon copy is.

00;02;42;13 - 00;02;48;09
Justin Jasniewski
They just see it as that's what the two. That's just what the the letters CC me on your email.

00;02;48;11 - 00;02;50;14
Craig Andrews
Yeah, there's there's,

00;02;50;14 - 00;02;52;24
Craig Andrews
there's a VC here in Austin,

00;02;52;24 - 00;03;01;00
Craig Andrews
who talks about, you know, when you're doing sales, when you have the S, get the signature and shut up and the SS,

00;03;01;00 - 00;03;07;29
Craig Andrews
you know, quit talking because you can talk your way out of the sale. And he's like, yeah, his line is all right. It looks like we have a deal now.

00;03;08;01 - 00;03;20;26
Craig Andrews
Please sign here. Press hard. Bottom copy is yours. Please use my pen. And I just wonder how many people even know what we're talking about. Bottom copy is years, right?

00;03;20;27 - 00;03;33;21
Justin Jasniewski
Yeah. I mean, when I first started at serve You, we still used paper PTO slips. So the pink sheet was up, was mine. And then the yellow sheet, one to HR and then the white sheet one to your manager.

00;03;33;23 - 00;03;43;28
Craig Andrews
Wow. So that's wild. So you grew up in Wisconsin and how did you get down to Chicago?

00;03;44;01 - 00;03;50;26
Justin Jasniewski
So somewhat on a whim, I decided to apply to the Kellogg School of Management.

00;03;50;26 - 00;04;06;04
Justin Jasniewski
I wasn't necessarily super after getting an MBA, but I. Somebody from Kellogg reached out, managed to convince me that it was a good idea and that it's something that I should do.

00;04;06;04 - 00;04;18;04
Justin Jasniewski
I did about a year and their part time program where I would do my regular job during the day and then get in the car and drive down to Chicago and be in class all night and then drive back to Milwaukee.

00;04;18;06 - 00;04;29;17
Justin Jasniewski
And after a year of doing that, I decided enough was enough, decided to go full time, and then moved down to Chicago, where I met my wife in the program and,

00;04;29;17 - 00;04;31;07
Justin Jasniewski
been there ever since.

00;04;31;09 - 00;04;35;06
Craig Andrews
Wow. Oh, cool.

00;04;35;09 - 00;04;51;29
Craig Andrews
Does it feel? My perception is that there's a little bit of a culture clash between Wisconsin and Chicago. Not necessarily Wisconsin and Illinois, but it just seems. Does does it feel weird, or is Chicago your kind of place?

00;04;52;01 - 00;05;00;07
Justin Jasniewski
It's it's larger than Milwaukee, for sure. It's a little less blue collar here, but it's it's,

00;05;00;07 - 00;05;14;17
Justin Jasniewski
when I cross the cheddar curtain. It's not a total culture shock there. I like in more ways than they're different. Now, if I were to fly to New York, it would be materially different, I feel like, but I think Milwaukee and Chicago share common roots.

00;05;14;17 - 00;05;18;22
Justin Jasniewski
And there's they're alike in more ways than they're different.

00;05;18;24 - 00;05;23;28
Craig Andrews
That makes sense. And the Triathalon would,

00;05;23;28 - 00;05;27;14
Craig Andrews
what triathlon did you do?

00;05;27;17 - 00;05;30;15
Justin Jasniewski
So it was I don't even remember the name of it. It was,

00;05;30;15 - 00;05;38;10
Justin Jasniewski
it was a locally put together triathlon. They did have timers, but it wasn't an official Ironman event or anything. And it was actually,

00;05;38;10 - 00;05;49;15
Justin Jasniewski
a club at Kellogg. They it was basically there was they'd put a sign up in the main building saying you can run a triathlon.

00;05;49;15 - 00;05;57;27
Justin Jasniewski
Yes. You go to this meeting and we'll tell you how. Once the meeting and I basically said, here's what the schedule is. Here's what you have to do.

00;05;57;27 - 00;06;06;03
Justin Jasniewski
Here's what you have to commit to. Here's when the event is. Are you in or are you out? And that was it. So that's how I got to,

00;06;06;03 - 00;06;07;11
Justin Jasniewski
doing the triathlon.

00;06;07;14 - 00;06;17;25
Justin Jasniewski
Now, I don't think I'm gonna win any medals, but the completion was what was important to me. Maybe later on in life when I have a little more free time. Like, that's never going to happen.

00;06;17;25 - 00;06;22;07
Justin Jasniewski
I can try to go for a better time, but I'm just happy to have it done.

00;06;22;09 - 00;06;39;03
Craig Andrews
Yeah. No. And that's, you know, one thing that I think's common and and great leaders and people who accomplish a lot is they have a habit of doing things that are really hard. They have habit of doing things that are,

00;06;39;03 - 00;06;45;09
Craig Andrews
just hard. And it's there's actually some science behind that. There's a part of the brain called the,

00;06;45;09 - 00;06;52;04
Craig Andrews
the interior mid cingulate cortex and the one part of the brain that will actually grow,

00;06;52;04 - 00;06;53;07
Craig Andrews
and it regulates,

00;06;53;07 - 00;06;54;10
Craig Andrews
emotions.

00;06;54;10 - 00;06;57;08
Craig Andrews
It's the reward center of the brain. It,

00;06;57;08 - 00;07;06;28
Craig Andrews
does does a lot of things, but the only way you can stimulate that is to do things that make you uncomfortable. And,

00;07;06;28 - 00;07;10;01
Craig Andrews
and so I think that's cool. Good for you for doing that. And,

00;07;10;01 - 00;07;11;13
Craig Andrews
I think my, my,

00;07;11;13 - 00;07;15;00
Craig Andrews
I mean, you know, Covid wrecked my lungs, so,

00;07;15;00 - 00;07;17;13
Craig Andrews
no hopes of me when I try.

00;07;17;15 - 00;07;21;15
Craig Andrews
I'm doing I'm still working up to where I can do a full hour of camp. Gladiator.

00;07;21;15 - 00;07;22;16
Craig Andrews
So I don't think,

00;07;22;16 - 00;07;26;11
Craig Andrews
triathlons are my future, but,

00;07;26;11 - 00;07;28;27
Craig Andrews
Anyway, well, let's talk a little bit about,

00;07;28;27 - 00;07;34;04
Craig Andrews
PBMs, pharmacy benefit managers, and, you know, one of the problems with,

00;07;34;04 - 00;07;40;08
Craig Andrews
with health care, it's it's incredibly complex and it's confusing.

00;07;40;10 - 00;07;50;07
Craig Andrews
I first heard somebody talking about PBMs on Joe Rogan's podcast, and I had the benefit of, you know, hitting replay and listening and still confused me.

00;07;50;07 - 00;07;54;24
Craig Andrews
So what is a pharmacy benefit manager?

00;07;54;26 - 00;08;18;04
Justin Jasniewski
So you are not alone in being confused about what a pharmacy benefit managers? My introduction to serve you was through a recruiter and I will quote what this recruiter said. I don't know what these guys do. I don't really know what a pharmacy benefit manager is. I think it's insurance, but not really. It has to do with pharmacy, but it doesn't look like the dispense drugs.

00;08;18;06 - 00;08;28;20
Justin Jasniewski
But it's it'll be a great fit for you know, typically you know, something a recruiter would say. And that was actually my first introduction to PBM was through this recruiter because I was,

00;08;28;20 - 00;08;33;28
Justin Jasniewski
retail manager at target. And I just wanted anywhere but here.

00;08;33;28 - 00;08;42;17
Justin Jasniewski
Was my job search criteria. And so PBM sit at the critical crossroads of three different parties.

00;08;42;20 - 00;09;13;06
Justin Jasniewski
First is the employer that's paying the bills. Second is the drug manufacturers that manufacture the pills and the pharmacies, the ones that actually dispense the pills. Now, when you sit at the crossroads of those three parties, you can leverage them against each other, right? So in theory, PBM should always be working in the interests of the employer group because that's who's paying your bills as a as a PBM.

00;09;13;09 - 00;09;34;27
Justin Jasniewski
But, you know, drug manufacturers have their own incentives. And drug manufacturers will also pay PBMs in exchange for favorable placement of their products. Right. So there's cash coming in from manufacturers, cash coming in from plan sponsors. And the cash is going out to the pharmacies. So oftentimes when you see,

00;09;34;27 - 00;09;50;06
Justin Jasniewski
things when you see various news and testimonials of, of people that are critical PBMs, it's plan sponsors that think they're paying too much, pharmacies that think they're being paid too little, and manufacturers that,

00;09;50;06 - 00;09;54;26
Justin Jasniewski
feel like they're having to pay these big rebate dollars in order to get their drugs covered.

00;09;54;28 - 00;09;59;03
Justin Jasniewski
So there's a lot of legitimate reasons why PBMs are,

00;09;59;03 - 00;10;18;09
Justin Jasniewski
you know, in the crosshairs. And they're the everyone's favorite villain of the healthcare system right now. And I think that reputation is fairly well earned, but it's because they're at the crossroads of these three critical parties, and they have the ability to either drive costs up or down, depending on how they handle being kind of the traffic cop.

00;10;18;11 - 00;10;21;09
Justin Jasniewski
But the those three intersections.

00;10;21;12 - 00;10;24;25
Craig Andrews
What was what was the concept that originally,

00;10;24;25 - 00;10;29;07
Craig Andrews
or the desire, the goal that really, originated this concept of a,

00;10;29;07 - 00;10;30;09
Craig Andrews
PBM.

00;10;30;12 - 00;10;52;21
Justin Jasniewski
So I think, was probably 50 years ago or was in the 70s. It was just like a cool add on, kind of like vision benefits or like pet insurances. Now it was just kind of an add on that you could throw onto your health plan because drugs were fairly inexpensive and for the most part, you just went to a pharmacy, picked up your drug, that was that.

00;10;52;23 - 00;11;24;24
Justin Jasniewski
But the average cost of a drug was, you know, a couple of percentage points of what it is now. And it started as kind of a an IT product. So it was really technology that kicked off PBMs as they are today. And there were a few because I don't know if you know this, if you've ever filled a medical, if you've ever submitted a medical claim, usually takes anywhere from six weeks to six months to get your bill, and then you'll know what your co-pay is.

00;11;24;24 - 00;11;27;11
Justin Jasniewski
You know what the insurance paid. You paid.

00;11;27;11 - 00;11;44;02
Justin Jasniewski
There's this reconciliation. A lot of times it's wrong. You got to go back and lunch times pharmacy is different. And that if if you get a response any slower than three seconds from the claims processing system, something is terribly wrong. So what's great about,

00;11;44;02 - 00;11;56;01
Justin Jasniewski
the pharmacy system here is that claims are instantaneous, you know, immediately if your drug is covered or not, whether it needs prior authorization, whether it's formulary, what your copays, you know, all that in three seconds or less.

00;11;56;05 - 00;12;17;26
Justin Jasniewski
Sometimes you know that before you even leave the doctor's office. And that's something that's unique in the US health care system, because claims usually take forever to get across. But pharmacy is one of the only parts of the US health care system that, you know, there's really strict standards of what's submitted. Everything's very, very fast. And it was high tech before.

00;12;17;27 - 00;12;21;19
Justin Jasniewski
Health care was high tech before, you know, epic was out there,

00;12;21;19 - 00;12;40;14
Justin Jasniewski
selling EMR cars. So it's kind of an interesting way it started. And then it just evolved over time where there is more claims being processed, more pharmacies out there. They're now negotiating reimbursement off of various metrics. Pharmaceutical manufacturers started manufacturing drugs that got more and more expensive.

00;12;40;17 - 00;12;46;20
Justin Jasniewski
They used their position in the middle to leverage those manufacturers and get money for themselves.

00;12;46;20 - 00;12;55;02
Justin Jasniewski
Which in theory should be passed along to their clients. But it was an IT product that evolved into what it is now, which is kind of,

00;12;55;02 - 00;12;56;24
Justin Jasniewski
essentially a bank,

00;12;56;24 - 00;13;02;01
Justin Jasniewski
that holds client dollars, payers pays the bills on behalf of clients.

00;13;02;03 - 00;13;02;19
Justin Jasniewski
And,

00;13;02;19 - 00;13;18;14
Justin Jasniewski
you know, a lot of PBMs will also have a health care aspect to it where they employ clinical pharmacist care managers. Care navigators give people the care that they need, get people to the right place. But it started as kind of a quality product and just went from there.

00;13;18;17 - 00;13;24;16
Craig Andrews
Help me understand this bank aspect. Pharmacy benefit managers, essentially a bank.

00;13;24;18 - 00;13;25;21
Justin Jasniewski
What have you think about it?

00;13;25;21 - 00;13;31;22
Justin Jasniewski
You know, the PBMs are taking money on behalf of self-funded plans, sponsors taking,

00;13;31;22 - 00;13;37;29
Justin Jasniewski
money from pharmaceutical manufacturers, and they're paying it to pharmacies. So,

00;13;37;29 - 00;13;39;25
Justin Jasniewski
ultimately they are,

00;13;39;25 - 00;13;49;05
Justin Jasniewski
similar to any insurance company. They're taking money paying that to downstream kind of pharmacies that need it. And,

00;13;49;05 - 00;13;54;25
Justin Jasniewski
you know, I don't think interest is the way that they make money similar to what a bank would do, but ultimately they're, they're,

00;13;54;25 - 00;13;56;11
Justin Jasniewski
taking and paying,

00;13;56;11 - 00;14;01;23
Justin Jasniewski
money on behalf of client sponsors, which is why there's a lot of these,

00;14;01;23 - 00;14;03;16
Justin Jasniewski
you know, or risk,

00;14;03;16 - 00;14;07;20
Justin Jasniewski
lawsuits and, and people get in trouble because if you're not paying attention

00;14;07;20 - 00;14;11;00
Justin Jasniewski
to what your PBM is doing, they're taking your dollars and they're,

00;14;11;00 - 00;14;12;19
Justin Jasniewski
keeping them.

00;14;12;21 - 00;14;19;26
Craig Andrews
Reza. A Reza. Yes. Yeah. What's that in plain man's talk?

00;14;20;03 - 00;14;21;05
Justin Jasniewski
So a risk,

00;14;21;05 - 00;14;22;06
Justin Jasniewski
is,

00;14;22;06 - 00;14;36;01
Justin Jasniewski
is the Employee Retirement Income Security Act. I'll have to check later if that was actually correct or not, but it basically imposes certain requirements and standards on employers that, for example, they can't,

00;14;36;01 - 00;14;40;06
Justin Jasniewski
take your entire 401 K and put it all on black at the casino.

00;14;40;06 - 00;14;43;12
Justin Jasniewski
They need to treat your money as if it's their own.

00;14;43;14 - 00;14;47;02
Justin Jasniewski
And, those rules are pretty strict. And,

00;14;47;02 - 00;14;49;21
Justin Jasniewski
for one case face, and I think in,

00;14;49;21 - 00;14;54;09
Justin Jasniewski
employee benefits space, it's becoming more and more of,

00;14;54;09 - 00;15;05;05
Justin Jasniewski
featured issue because there's more and more of these lawsuits where employees are suing their employers and saying you didn't handle the money. I paid in to the to our employee benefit plan,

00;15;05;05 - 00;15;05;27
Justin Jasniewski
correctly.

00;15;06;04 - 00;15;10;23
Justin Jasniewski
And I am suing you just like I would if you took my for one K and put it all in black.

00;15;10;25 - 00;15;14;20
Craig Andrews
Got it. And Daniel Russo also cover financial advisers.

00;15;14;22 - 00;15;16;24
Justin Jasniewski
It does cover financial advisors.

00;15;16;24 - 00;15;34;18
Justin Jasniewski
So financial advisors can be fiduciaries. It means they need to work in your best interests, not their own best interests. So it means, you know, they're not just going to sell you funds that benefit them and don't perform well. Otherwise they're legally liable. And it's a pretty high standard of care for financial advisors.

00;15;34;20 - 00;15;43;10
Craig Andrews
And so there's a fiduciary responsibility for financial advisors. But there's also a fiduciary responsibility for plan administrators.

00;15;43;13 - 00;15;59;11
Justin Jasniewski
Correct. Yeah. Plan administrators ultimately are responsible for their dollars. Go. And you know, they trust advisors such as insurance brokers to help them with that process. But ultimately, the buck stops with the employer on how their dollars are being spent.

00;15;59;14 - 00;16;33;17
Craig Andrews
Got it. You know, and the thing that strikes me about that is financial advisors, through their licensing and compliance, they're regularly reminded of their fiduciary responsibilities. And so they have things in place. But my understanding is if you have a company sponsored health plan, you're a fiduciary. There's somebody in your business that has to act as a fiduciary who's not going through the licensing, not doing the, you know, may not realize that responsibility and the exposure that they're opening the company up to.

00;16;33;20 - 00;16;35;12
Justin Jasniewski
Exactly. So it's it's,

00;16;35;12 - 00;16;49;09
Justin Jasniewski
it's an issue. It's I think there's more and more regulations that are aimed at helping employers get ahead of that. There's, you know, transparency requirements. There's disclosure requirements.

00;16;49;09 - 00;16;51;17
Justin Jasniewski
You're not allowed. We as,

00;16;51;17 - 00;17;05;01
Justin Jasniewski
PBM shouldn't restrict employers from accessing their data so that they can shop out to see whether their dollars being spent correctly benchmark how we perform versus other PBMs.

00;17;05;04 - 00;17;06;27
Justin Jasniewski
It's, you know, it is,

00;17;06;27 - 00;17;13;29
Justin Jasniewski
it's an important requirement. And as more and more of these large employers are coming under fire,

00;17;13;29 - 00;17;16;08
Justin Jasniewski
you know, everyone should take notice now,

00;17;16;08 - 00;17;20;20
Justin Jasniewski
I'm not here to to tell you you're going to be the next Wells Fargo. If you don't, you serve you.

00;17;20;20 - 00;17;30;16
Justin Jasniewski
I'm not here to tell you that I think a lot of these lawsuits aren't necessarily getting legs, and I don't believe any of them have really resulted in anything material.

00;17;30;22 - 00;17;31;23
Justin Jasniewski
But,

00;17;31;23 - 00;17;36;23
Justin Jasniewski
I wouldn't be surprised if there's more of them. And eventually one of these is going to stick.

00;17;36;25 - 00;17;57;00
Craig Andrews
So here's here's here's where I'm confused. Help me work through this okay. So there's a fiduciary responsibility and there's a pharmacy benefit manager. When I think when I'm thinking about the pharmacy benefit manager, they're just they're just making sure my employees get drugs. Where what's the fiduciary breach that's causing the lawsuits.

00;17;57;03 - 00;17;59;20
Justin Jasniewski
So I'll use for example, the,

00;17;59;20 - 00;18;12;11
Justin Jasniewski
one of the drugs in one of those big lawsuits for Johnson and Johnson and Wells Fargo, I think are the ones everyone talks about. There is a drug out there called a magic, a Baggio, a Baggio treats,

00;18;12;11 - 00;18;15;29
Justin Jasniewski
miss multiple school screw up sucralose.

00;18;15;29 - 00;18;22;06
Justin Jasniewski
Which are in this. So that drug is about $8,000.

00;18;22;08 - 00;18;22;28
Craig Andrews
Oh.

00;18;23;00 - 00;18;28;11
Justin Jasniewski
Right. Expensive. Well, what if I told you there was a generic that, you know, if you go to,

00;18;28;11 - 00;18;44;09
Justin Jasniewski
random pharmacy use. Good. Our X, which you can use without any insurance at all, maybe 3 or $400. Great. Right now, if you're one of the largest employers out there and you have over 100,000 enrolled employee employees, you should have some negotiating leverage, right?

00;18;44;11 - 00;19;10;02
Justin Jasniewski
You should be able to get a better price than most, certainly a better price than someone who has no insurance at all on that generic about you. Well, as it turns out, their pharmacy benefit manager was charging them, I believe, over $6,000 for this drug. You can walk down to the nearest, you know, Bob's Drugstore that uses X and get it for $300.

00;19;10;05 - 00;19;16;07
Justin Jasniewski
Why are they paying over 2,000% of what the price to an uninsured person would be?

00;19;16;07 - 00;19;20;02
Justin Jasniewski
The employee argued that is because the employer,

00;19;20;02 - 00;19;36;28
Justin Jasniewski
breached their fiduciary duty and because basically employees saying, look, I'm paying employee contributions to the self-funded plan. So in the self-funded plan, you're holding my dollars and you're using those to pay for my health care, and you're paying an egregious markup on this drug.

00;19;37;01 - 00;20;10;23
Justin Jasniewski
So their argument was you're breaching your fiduciary duty with my money. Because basically I paid into this, and I'm getting a really you're getting a really bad deal. So you're not treating my dollars like your dollars. You're throwing them away. So put simply, that's kind of I think the basis of what were the issue was and where kind of these fiduciary where the future word pops up all the time is in these cases where I'm getting a really bad deal because your contract with your pharmacy benefit managers is really bad, and I can prove it.

00;20;10;25 - 00;20;18;18
Justin Jasniewski
Then it gets really uncomfortable for not only the employer, but their advisors to. Yeah, yeah.

00;20;18;21 - 00;20;31;17
Craig Andrews
That makes sense. There's a second. You know, I mentioned I heard somebody on on Rogan and he was talking about some deal. And this is where I'm still confused, but it was some deal where,

00;20;31;17 - 00;20;43;29
Craig Andrews
let's say I have a, a a drug and I'm having, you know, let's say it's $1,000 drug and the PBM says, hey, your responsibility is $500.

00;20;44;02 - 00;21;07;01
Craig Andrews
They're either through rebates, kickbacks or whatever. They're only paying like $100 or a couple hundred dollars for the drug. And basically they've turned me the patient into a profit center instead of driving prices down, they've driven prices up. That's kind of my convoluted understanding how help me correct that. What helped me fill in the dots.

00;21;07;03 - 00;21;11;29
Justin Jasniewski
Yeah. So rebates are a big part of the problem.

00;21;11;29 - 00;21;16;11
Justin Jasniewski
Because if you look, there is a very smart man and Adam. Fine.

00;21;16;11 - 00;21;19;20
Justin Jasniewski
With the Drug Channels Institute, and he talks about this all the time.

00;21;19;20 - 00;21;32;16
Justin Jasniewski
But if, if you look at gross drug costs. So, like the sticker price, like the mSRP of a car is bad example, now everyone's paying an SRP, but there was a period of time where mSRP was not the price that you paid.

00;21;32;23 - 00;21;44;21
Justin Jasniewski
You always pay the discount off mSRP, right? Right. So when you see quote unquote skyrocketing drug costs, you're looking at the mSRP, because that's what the patients see at the counter. But,

00;21;44;21 - 00;21;48;03
Justin Jasniewski
there are things called rebates. The rebates are on,

00;21;48;03 - 00;21;56;25
Justin Jasniewski
most branded products and most specialty products. So the really expensive stuff now like your metformin that you pick up, that's like $0.02 a pill.

00;21;56;28 - 00;22;09;24
Justin Jasniewski
There's no rebates on that, at least not to the plan sponsor. Right. But for these expensive things like I'll use, for example, Ozempic Ozempic has a rebate attached to it. That rebate has been known to be substantial.

00;22;09;24 - 00;22;23;00
Justin Jasniewski
And essentially what happens is patient fills the drug the copays based on and SRP. Right. The sticker price and the rebate is paid sometimes 90 to 130 days after the fact.

00;22;23;05 - 00;22;35;01
Justin Jasniewski
That goes to the plan sponsor. Well, it goes to the PBM. Who then should pass it through to the plan's sponsor. Right. So let's say I paid a I'm just gonna use round numbers $1,000 for,

00;22;35;01 - 00;22;45;11
Justin Jasniewski
ozempic. Let's say I got a $400 rebate afterwards. And let's say in that example, you know, these same examples, you talked about your coat, your coinsurance, $500.

00;22;45;15 - 00;22;59;08
Justin Jasniewski
So the patient just paid $500. Plan sponsor just got a check for $400. Yeah. They only pay $100 because the rebate made up for that. Rebates are difficult to attach to a transaction because they're

00;22;59;08 - 00;23;00;25
Justin Jasniewski
very secretive.

00;23;00;25 - 00;23;07;13
Justin Jasniewski
You know, sometimes not even the PBM knows what the rebate will be until after the fact when they bill it.

00;23;07;13 - 00;23;14;24
Justin Jasniewski
It is kind of a very weird dance that happens between pharma and large PBMs that small PBMs.

00;23;14;27 - 00;23;42;00
Justin Jasniewski
But those rebates do decrease drug costs, but they do decrease drug costs way after the fact. And it's actually up to the employer of in theory, they should be taking those rebate dollars not to be used to decrease premiums to employees. But that's not always the case. And that's assuming the PBM is passing through the rebates, because there are some PBMs that just keep the rebates or pay rebates to someone else along the supply chain.

00;23;42;02 - 00;24;03;13
Justin Jasniewski
And then then you see that quote unquote, skyrocketing drug costs. But when you look at the net price of drugs, so when you take that gross price, you subtract the rebates. Drug costs have been largely going down for the last ten years or so, not by much. But the net cost of drugs has been going down over time.

00;24;03;13 - 00;24;19;16
Justin Jasniewski
When you factor in rebates versus what everyone sees out there. And what's reported widely on the news is that drug costs are skyrocketing. Now, don't get me wrong, there are very, very expensive drugs that are out there. They're going to drive costs up like gene therapies are $1 million.

00;24;19;16 - 00;24;25;29
Justin Jasniewski
But your average run of the mill drugs that most people are going to take have been going down in price.

00;24;26;01 - 00;24;29;00
Craig Andrews
You know, there's there's,

00;24;29;00 - 00;24;42;05
Craig Andrews
angle where I can see why the rebates went in through that channel, you know? So if we think of, like, a traditional insurance model, there are really a lot of states have really strict rules regarding,

00;24;42;05 - 00;24;49;29
Craig Andrews
rebates that can be promised. Now, Illinois is a little funny with the Chicago. I've actually read the legislation for that.

00;24;50;02 - 00;24;56;17
Craig Andrews
And it's one of those things where it gives a lot of latitude for, you know, hey, we'll do this and it'll be okay. And so,

00;24;56;17 - 00;25;00;04
Craig Andrews
I think they may have even used the word de minimis,

00;25;00;04 - 00;25;03;24
Craig Andrews
you know, to say, you know, they left alive room for interpretation.

00;25;03;27 - 00;25;04;06
Justin Jasniewski
Right.

00;25;04;10 - 00;25;29;27
Craig Andrews
But the point of that, we had a client that sold professional liability insurance. So we had to understand what we could and couldn't say or promise. And but I can see why the rebates would be going through the PBM versus the insurance company, because all of a sudden you start running afoul of all these rebate laws in the insurance industry that could really jam people up.

00;25;30;00 - 00;25;34;11
Craig Andrews
And so I'm wondering if that's why they ended up over on the PBM side.

00;25;34;14 - 00;25;38;25
Justin Jasniewski
Yeah, ultimately the PBM decides coverage. So I'll use, for example,

00;25;38;25 - 00;25;40;27
Justin Jasniewski
there is a large PBM that

00;25;40;27 - 00;26;00;15
Justin Jasniewski
is subject to a class action lawsuit because they decided to cover with Govee and exclude that found. So those are two drugs I think most people know. They both are GLP ones for weight loss. They're the ones, you know, the the weight loss drugs up the topic this year.

00;26;00;18 - 00;26;02;14
Justin Jasniewski
CVS just,

00;26;02;14 - 00;26;23;23
Justin Jasniewski
decided to exclude one in favor of another. Now, typically a PBM would do this to lower the costs, right? If I have two products that I believe are comparable and I go to, you know, Eli Lilly and say, hey, Eli Lilly, if you give me a higher rebate, I'll exclude your competition, but you need to bring the cost of your drug down in order for me to do that.

00;26;23;25 - 00;26;43;05
Justin Jasniewski
That's, I think, the basis of of rebates and why rebates are paid the PBMs. Because ultimately the PBA has control over what's covered what isn't. So as a PBM, we have the control to say we're going to cover with Govee. We're going to exclude that bound, and then we're going to pick up some unknown amount of rebate dollars on the Govee.

00;26;43;12 - 00;26;46;05
Justin Jasniewski
That's why we would do something like that. Now,

00;26;46;05 - 00;27;07;25
Justin Jasniewski
there's a lot of criticisms to that, but I'm not going to get into. But at its core, that's what PBMs are supposed to do. They're supposed to user leverage, say I cover X million covered lives. I have a really large market for you to access. If you give me this concession by making your product my favorite and excluding all your competition, what can you give me for that?

00;27;07;27 - 00;27;26;21
Justin Jasniewski
And if the PBM passes that through to the employer group, that's a good thing, right? Because you're lowering costs. Now there's the hey, it's not transparent to the actual person at the counter filling the drug, but we can at least get started with lowering the cost,

00;27;26;21 - 00;27;37;17
Justin Jasniewski
through kind of these tools that are available. So leveraging pharmaceutical manufacturers, they pay you money in order for preferred placement of their products on your formulary.

00;27;37;19 - 00;27;58;06
Craig Andrews
Okay. So let's let's kind of put a bow on this with how how business owners, based on what we just discussed, how is it that business owners can bring down the cost of their health plans without denying their employees coverage through the PBM?

00;27;58;09 - 00;27;59;28
Justin Jasniewski
Yeah, absolutely. It's,

00;27;59;28 - 00;28;03;10
Justin Jasniewski
you know, one of the things I like to say is,

00;28;03;10 - 00;28;18;28
Justin Jasniewski
if you're hearing a lot of is first, you have to be engaged, you have to know what you're paying for, especially if you're self-funded. You need to understand the pieces of the system. And if your advisor is not explaining that to you, need to find a new advisor.

00;28;19;01 - 00;28;44;06
Justin Jasniewski
Because, you know, even though only large employers are getting in trouble right now by not understanding their PBM contracts, that that will make its way down the chain. And ultimately, I'll use, for example, if you're currently filling a brand name Humira, right. That was a drug. Everybody knew it was always on top. Claim reports. You know, it's $8,000 a month, $96,000 per year.

00;28;44;09 - 00;29;07;18
Justin Jasniewski
What could you do with $96,000 if you took that drug and filled essentially a generic version of it, biosimilar that's $700 a month. What could you do with $90,000? And especially if you're a small business owner, that's that's a big chunk of change. That's a couple feet. There might be a couple FTE E's, could be a piece of equipment.

00;29;07;18 - 00;29;09;24
Justin Jasniewski
It could be an expansion.

00;29;09;24 - 00;29;34;16
Justin Jasniewski
Even though health care is confusing and it's feels like a lot of hand-waving and I don't really know what's what. If you take a close look at your pharmacy benefit manager, and if it's one of the big ones, chances are there might be there might be some say. Or if you haven't looked at your contract in 5 or 10 years, if you look at that, that could be an area of savings.

00;29;34;18 - 00;29;59;25
Justin Jasniewski
A lot of times that we like to look at is if you look at, you know, gross profit, how much revenue do you need to bring in per dollar of gross profit, let's say, a 20% gross profit margin and I'm a numbers guy. This is why I take this approach. Yeah. What say for every dollar you bring in you keep $0.20 of it and you just put in a new PBM that doesn't cover expensive human error.

00;29;59;27 - 00;30;12;17
Justin Jasniewski
Covers the generic version of human error. You know, the biosimilars that are out there. Let's say you just saved $90,000. How much revenue would you have had you had a brought in order to make that $90,000 through top line?

00;30;12;17 - 00;30;17;20
Justin Jasniewski
A lot. Right. You had to bring in five times that. So,

00;30;17;20 - 00;30;23;14
Justin Jasniewski
even though it might seem like it's complicated and difficult, I don't get this.

00;30;23;16 - 00;30;57;06
Justin Jasniewski
I don't trust PBMs. I think working with advisors that are innovative are willing to push the envelope and are willing to look at PBMs that you don't see on TV and don't see all over the news, is the quickest way to deliver some value immediately that you can reinvest in your business. Every dollar you save on health care costs, you can either reinvest in your health care delivery system or use that to support your business, which is what you should be doing in the first place, versus worrying about how much you're spending on drugs.

00;30;57;06 - 00;31;12;11
Justin Jasniewski
So if you trust your if you go to the PBM that you can trust, and a PBM that has your best interests and is transparent, that's one less thing you have to worry about. And you can use those savings and running your business and growing your business, which is what you should be doing in the first place.

00;31;12;14 - 00;31;20;11
Craig Andrews
It's awesome. Well, I always I always like solutions where I, where I can grow profit without finding a new customer or cutting any, any heads.

00;31;20;14 - 00;31;24;23
Justin Jasniewski
Exactly. It's. Yeah, exactly.

00;31;24;25 - 00;31;25;16
Craig Andrews
Well, Justin,

00;31;25;16 - 00;31;29;18
Craig Andrews
this has been great. Thanks for sharing it. How can people reach you.

00;31;29;20 - 00;31;35;23
Justin Jasniewski
So you can reach me on LinkedIn? I am chronically on LinkedIn. I talk about this stuff all the time.

00;31;35;23 - 00;31;47;07
Justin Jasniewski
So you can reach out to me on LinkedIn or WW the way that you are x.com. You can get in touch with us there as well. If you want us to take a look at your PBM contract, or if you have just any questions,

00;31;47;07 - 00;31;48;27
Justin Jasniewski
we're ultimately here to educate.

00;31;48;27 - 00;31;51;29
Justin Jasniewski
I'm not here to sell you. I'm like the worst salesperson ever.

00;31;51;29 - 00;32;02;04
Justin Jasniewski
If you have any question, no matter how pointy it is, feel free to reach out and ask. I am more than happy to explain it in excruciating detail to you in a way that you understand.

00;32;02;06 - 00;32;05;11
Craig Andrews
Well, thank you, Justin. Appreciate you coming on Layers and Legacies.

00;32;05;13 - 00;32;09;28
Justin Jasniewski
Thank you very much, Craig, and we'll see you soon.

00;32;09;28 - 00;32;36;22
Craig Andrews
This is Craig Andrews. I want to thank you for listening to the Leaders and Legacies podcast. We're looking for leaders to share how they're making the impact beyond themselves. If that's you, please go to Ally's for me.com/guest and sign up there. If you got something out of this interview, we would love you to share this

00;32;36;22 - 00;32;38;17
Craig Andrews
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00;32;38;19 - 00;33;02;01
Craig Andrews
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00;33;02;03 - 00;33;10;08
Craig Andrews
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00;33;10;08 - 00;35;12;13
Craig Andrews
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