Hello, all you Relentless Tribe members. Welcome to it. Today we have a show that will bend your mind in new directions. And yes, I have a head cold at a very weird time of year. I have trouble apparently doing things like normal people.
Anyway, we talk a lot on this podcast about following the dollar from the perspective of the ultimate purchaser (ie, plan sponsors, employers, and patients/members themselves). But if we truly believe that collaboration is the next innovation, which I truly believe, then we have to understand the incentives that are driving every single player in the healthcare ecosystem.
For a full transcript of this episode, click here.
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So, today we are flipping the script and looking at the cash-pay and, therefore, by default, the GLP-1 market strictly from the perspective of a pharma manufacturer, a pharmaceutical manufacturer.
Or vice versa, if you work for a pharmaceutical manufacturer today, you'll hear a little bit about what the other side of the house might be thinking, where plan sponsors contemplate pharmacy trend increases: 9%, 12%, I've heard 20% increases in spend year over year.
First, though, we're gonna start out with the cash-pay programs' why here, one of which I just mentioned, which is that pharmacy trend increase. But I'm gonna read a post by David Alderman from LinkedIn the other day that I think very eloquently sums up the perception of the sequence of events from the standpoint of many people.
David Alderman wrote, "The system did not break. It worked. That is what nobody wants to say at the [pharmacy] counter. For 30 years, Americans were handed a plastic card and told it meant protection. Often it meant admission to a maze. The lie was not that healthcare is complicated. It is. The lie was that complication deserved obedience.
"Then GLP-1s happened. Not just as drugs. As a behavioral hack. People who had never read a benefit design document suddenly knew the difference between a coupon, a cash price, a telehealth intake, a pharmacy partner, a prior auth, a vial, a pen, and a refill queue. [And] they were doing it at 11:42 p.m. on [the] couch."
Read that whole post. It's all very interesting.
But right now, Ophelia Johnson, my guest today, is gonna add and subtract and tote up the difference from the standpoint of a pharmaceutical manufacturer. Because for them, the why and the math is somewhat different. It's the equal and opposite side.
What did pharma manufacturers see that caused them to create the coupon, a cash price, a telehealth intake, a pharmacy partner in the first place? We talk about this, Ophelia and I; and then we dig into the back end. When a patient uses a savings card like GoodRx or goes through a direct telehealth channel, how does the money actually flow?
But here's the catch for any money flow to actually work from, again, the standpoint of a manufacturer doing any model that isn't the traditional "sell it to a wholesaler and get paid by a PBM" model. Doing anything off the reservation like this successfully requires a level of operational discipline that many pharma companies are, at this point anyway, not structurally set up for.
When you cut out the PBM and start managing new channel partners, supply chains, dispensing fees yourself, yeah, it's kind of a whole new thing. If a pharma company isn't buttoned up on its gross-to-net calculations in unit economics, they are staring down the barrel of the old so-called revenue leakage, right?
We also get into the Whack-a-Mole game of perverse incentives a little bit later in the conversation.
But also, excitingly, some big PBMs are creating new administrative fees to manage the exact prior auth complexities that they created in the first place.
My guest today, as mentioned at least three times, is Ophelia Johnson. Most recently, Ophelia built the new business channels for the manufacturer that created the GLP-1 boom. She has said in doing that, she learned the power of partnership and collaborating across the health ecosystem to drive change the right way.
And yeah … exactly. Ophelia recently started a consulting practice, and you can find out more information here.
This conversation with Ophelia today I would consider some fairly essential listening, whether you are a pharmaceutical executive trying to build out maybe a new distribution channel without getting yourself in hot water or a plan sponsor trying to get insight into how to shift focus from "rebate yields" to actual medication abandonment rates and outcomes, which, by the way, might mean picking out your formulary in advance of selecting the vendors to deliver on said formulary of high-value drugs through whatever channel makes the most sense.
Ann Lewandowski, along with Lena Chaihorsky, was talking about this recently on LinkedIn. But right? Pick the formulary you want your members to be able to get and then find the right combination of the right vendors in the right channels to do that the most effectively.
All right … one more thing before I introduce Ophelia Johnson and we talk cash pay from the standpoint of a pharma manufacturer. I was faced with a conundrum. My second thought—not my first, my second thought—was to put right here in this introduction a sort of explainer of the behind-the-scenes contracting goings-on that sit behind, for example, why the lowest-price branded med or lowest-price biosim as another example are not on formulary and then maybe those brands start thinking about going cash pay.
Here's a sort of backgrounder post on this topic by Madelaine Feldman, MD, on LinkedIn the other day.
But why? So, I said my second thought was to stick the explainer here to go off on a tangent about this right now, but yet it is just way too long and slightly off topic.
My first thought was to do a whole episode with a guest on this topic. But I was having trouble finding somebody willing to discuss this stuff on record. So … right.
I say all this to say come back next week. I'm gonna do probably a very short airing of some laundry on this topic. Do come back for that. See you next week.
Thank you so much to our founding sponsor, Aventria Health Group, and also the financial assist from Payerset. Please visit Payerset's Web site. They're doing some very interesting things in the price transparency space.
So, let's get to it. Here is my conversation with Ophelia Johnson.
Also mentioned in this episode are E.fi; David Alderman; Ann Lewandowski; Lena Chaihorsky; Madelaine Feldman, MD; Aventria Health Group; Payerset; Bryce Platt, PharmD; Ge Bai, PhD, CPA; Luke Slindee, PharmD; and Nina Lathia, RPh, MSc, PhD.
For a list of healthcare industry acronyms and terms that may be unfamiliar to you, click here.
You can learn more at e-fi.works and by following Ophelia on LinkedIn.
Ophelia Johnson is the founder of E.fi (E-fi), a strategy and execution firm for healthcare, tech, and public sector leaders who know exactly what they want to build and need a partner who can make it reality.
After nearly a decade inside Pharma's most complex organizations, including Merck & Co., Bristol Myers Squibb, and Novo Nordisk, Ophelia has worked across every division: manufacturing, R&D, commercial/market access, and business operations. She has navigated drug shortages, developed vaccines, resolved manufacturing failures, and built enterprise systems from the ground up. Most recently, she architected Novo Nordisk's direct-to-consumer and direct-to-employer channels, both built from zero. Across her career, her work has contributed to the launch of more than 25 products and programs, including 10 partnership deals launched in the last 12 months.
What she kept seeing, across every organization, was the same breakdown: a strong idea, aligned leadership, and then no execution. E.fi exists to close that gap. The firm structures strategic partnerships, builds systems that scale, and drives the cross-functional alignment that turns strategy into successful launches. Ophelia works with organizations where the stakes are high, the problem is complex, and getting it right means more patients can access the care they need at a price they can afford.
00:00 Introduction to this episode.
02:02 LinkedIn post by David Alderman.
06:13 LinkedIn post by Ann Lewandowski.
07:05 Backgrounder LinkedIn post by Madelaine Feldman, MD.
08:07 The conversation with Ophelia Johnson.
08:14 What is cash pay?
08:59 Why is this a thing, and how did we get here?
10:47 LinkedIn post by Bryce Platt, PharmD, on prior authorization reform.
12:28 The different ways that a patient could go about receiving and paying for their drug.
13:22 What's going on behind the scenes between GoodRx and the pharma manufacturer.
17:02 What dispense fees are and how they work.
17:41 A sidenote about next week's episode.
18:00 AEE13 with Ge Bai, PhD, CPA.
19:03 EP439 with Luke Slindee, PharmD.
20:03 A sidenote about the pharma manufacturer POV.
21:44 The pharma supply chain in telehealth.
25:27 Why claims validation has never been more important.
28:19 Where do employers fit in all of this?
32:45 Where does it make sense to consider these alternative business models in lieu of the risks?
35:04 Why mapping the incentives is important.
38:42 Ophelia's advice to pharma manufacturers.
40:41 Ophelia's advice to plan sponsors.
41:32 EP426 with Nina Lathia, RPh, MSc, PhD.
42:46 More of Ophelia's advice to payers.
Recent past interviews:
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