pbm reform bill. if we are going to bring prescription drug prices down even more, we should not let up on having mr. jorgensen here and other ceos pressing him. we've got to get serious about the reform. esther jorgensen, you were here in may 2023, and i asked you a question about the connection between list price and other formulary placement. and i will say, chairman sanders , this was the single best hearing i attended in 12 years in the senate the hearing where you have both the pbm's and the pharmacy ceos >> you and your colleagues testified that pbm's it's difficult if not impossible to get a formulary placement. that is because it often make a profit on the discount, a rebate they can negotiate off of list price. incentives artificially keep drug prices two high. so that i follow up and ask this question to the pbm witnesses. and asked about this, and as you might expect they were not direct in their answer. i asked one witness, "so you do not have any fee structure in your company we you coll

scary pbm bill . if we are going to bring prescription drug prices down even more, we should not let up on having mr. jorgensen and other ceos here in pricing . we've got to get serious about the pbm piece of it. mr. jorgensen, i am just going to go into this, you were here in may 2023, and i asked the question about the list price and formulary placement. and i will say, chairman sanders, this was the single, best hearing i have attended in 12 years in the senate. the hearing where you had both the pbms and the pharmacy ceos together, because you are familiar with the phenomenon, everybody blames the party on the other side of the room. we had them all on the same table. you and your two ceo colleagues testified that pbms prefer the drugs with the highest price and it is difficult, if not at all possible, to get a drug with a lower list price. that is because, they often make a profit on the discount or rebate they can negotiate off of list price. this per-person senate artificially keeps drug prices

pbm bill. if we were going to bring prescription drug prices down even more, we shouldn't, but we gotta get serious about the pbm reform piece of it. mr. jorgensen, i'm just going to go into this. you were here in may of 2023. and i asked you the question about list price and formulary placement. you -- and i will say, chairman sanders, this was the single- best hearing i've attended in 12 years in the senate, the hearing, where you had both the pbms and the pharmacy together. because you are familiar with the phenomena that everyone blames the party not in the room. we had them all at the same table. you had them testify that pbms perform with the highest price. and not possible to get a formalary placement. that's because they have a rebate they can negotiate off the list price. and this perverse incentive, artificially keeps drug prices too high. then i schedule followed up and asked this question to the pbm witnesses. and i asked about this. and as you might expect, they were not direct in

really, the pbms are making the bank here. let's talk about pbms for a second here, the real culprit in this room, in the story. these three big parent companies, the three big pbms schedule 85% of the industry. their gross revenue last year was $800 billion . their parent company's gross revenue $800 billion. this committee has worked so hard on pbm reform. we have not passed our bill to me and i would ask the children to consider bringing the delinking bill back and consider linking it up as well. pbm's receive a flat fee for their efforts, as opposed to the percentage of the sale. it would go to a flat fee model. and next, there can't possibly be enough transparency on this issue. you know, i came to congress to save medicare. the people of kansas sent me here to save medicare. i cannot save medicare without a miracle drug for alzheimer's. we are spinning i think well over $200 million on alzheimer's disease. if we forward the innovation that this type of company does, it tells people to stop researching drugs that are goin

we'll look at the pbm's, some good and some bad. what is said bay the ftc, some lawsuits ongoing and wrap up looking at some of the legislation that is facing this space quite a bit on the front from the states, some federal, lot for us to consider, a lot of possible changes, the election was mentioned will bring that up briefly on what could happen, but a lot for us to talk about. on the next slide, i outlined our view, aon's view on the pharmacy marketplace. it is certainly complex. there is a lot to read on the slide. this is something i put together as a reference for you hopefully later on. we'll dive into each pillar here in just a second. we'll talk about some of the major changes that we are seeing in the world of diabetes, medications used to treat weight loss. talk about invasions, new market entrance in the specialty medication and talking about medications like humara and talk about legislation and pbm's. kick off diving into my personal favorite topic, the clinical insights and glp-1 glucgone like peptide. a group of me

of the medicine ever go to innovators and the developers the rest is lost in the system developed pbm'snsparency in them. we need to d link any of the intermediaries they have this perverse disincentive the higher the price of medicine the better it is to the middleman. so let's address that. there's leadership now and congress on both sides to do that. so the whole ecosystem we need to take a look at to ensure access. thank you to askas you to digest what we both heard in terms of the dysfunction in the healthcare system. these incredible advances we are seeing in the science and in medicine and the lack of access a lot of people have to care. what are you seeing in your state in terms of successes on those measures but also what can be improved? >> to start i think i will say the frame at which i approach this i'm aap bit of an audit bal and health and human services secretary and that my background i was the coo cfo of the u.s. treasury down the street for president obama and presidentsu trump. coming into this role, might real drive, self and operator with a policy problem my real d

i think what happens is the profit pulls inside pbm's are confused and they get moved around.ting those profit pools so that the money goes back to the consumer. i would agree that the pbm's have played and run the course and they do not serve the purpose. they initially did which was to get to the drug companies and some of the cost down repurchasing >> as they have been consolidated into larger organizations. mark, you are someone who understands so much about the healthcare system and we do not have enough time today and i would really love to have you back when you are in town and come into the studio and sit down and talk to these things. it feels like there are some big changes coming. would you agree? >> it has to be it i think, again, we could get 110 million people in the individual market with 3.5% trend and we save a lot of money and e can talk about it for the next time but i will bring more points. it can work if we get people on the right benefits. >> mark bertolini, again, you are someone with a long career in the healthcare industry and you understand things th

offers as part of that and see as a smart investment and i don't buy the argument because the pbm's are statement that we should wait on it. that's a general argument. i'm not to holding back good drugs for folks, and upstream in north carolina our push here and credit secretary, forever call secretary cullens, my predecessor in north carolina, but who led the charge on establishing the healthy opportunity pilots. we launched them in 2022 and this is the first in the nation effort to take what is classically medicaid dollars and pay for the other things that will help keep you healthy before you walk in the door to the health care provider, so much is out of the health care system. it's civic organizations, faith-based leaders building in regions across north carolina to help give access to the fundamentals that promote health, food, housing, transportation. keeping people safe. supporting them with access to employment, et cetera. and two years in, it's working. we have found in the first roughly 20,000 people served, about 300,000 services provided, food, first off significant report

five years, we believe the tremendous head winds they've had and the reimbursements they get from pbm's is likely to asemtope. that's something that can be addressed three, four, five years from now. i think the market is going to change its perception about the stores if cvs health can prove it can integrate value and use those stores in order to better serve their customers and better serve the ma patients they're trying to serve right now at a tremendous loss. >> two-year losses of 42 plus percent. you think this is heading the other direction in the not too distant future? >> the company was supposed to earn $8-$9 a share. it's earning in the low fives according to consensus. the easiest thing in the world to do is stop losing money. it's hard to build great companies. it's easy to stop losing money. it can't happen immediately but it can happen over the course of the next couple years. there's universal focus on that and i think new management is very, very clear that is their number one priority. >> in the brief time we have left, as a long-time investor in healthcare broadly spea

early on in his first term he talked a lot about the unfairness to eueuropean pricin and the pbms wouldou talk about how discussions are going regarding m and a, and i guess even taking corporate to 15. b of a over the weekend argued that's probably worth four points to the s&p? >> there's, you know, pharma has a regular habit of internal development and external, and i think the healthiest companies don't believe every great compound is invented inside. that's certainly the case at merck these days. i think there's no question that the antitrust environment will help that, right? i can tell you that sitting in boardrooms over the last, three, four years, folks have hesitated. the attitude's been the ftc will challenge you. you have to be prepared for a two-year fight. don't expect early termination. >> what about trade? aren't pharmaceutical supply chains very global? >> they are. there's already been a pretty serious focus on essentially securing the supply chain from china. so active pharmaceutical ingredients so-called api comes from china and other places. we've done a lot of work