Episode 26 – A Conversation with Nanette Oddo of Truveris

Mike Stull (0:09)

Hi, and welcome to this month’s episode of the Employers Health HR Benecast, your source for expert commentary and insights on current health benefits related news and strategies. This is your host, Mike Stull. I’m excited for today’s guest, Nanette Oddo of Truveris.

If you haven’t heard of Truveris, they’re an advocate for employers providing a single source of objective truth for pharmacy benefits. They have a unique perspective on the industry, and I can’t wait for you to hear what they’re seeing in the PBM industry today.

But before we get to today’s guest, I want to tell you about our Summer Benefits Camp.

It’s a six-part virtual series where you and your team can take a break from the day to day while exploring the latest developments in employee benefits. If you missed any sessions, I encourage you to access them on the resources page of our website. And if you haven’t already, you can register for upcoming sessions at employershealthco.com/events. Upcoming topics include effectively communicating with the mobile workforce, measuring the results of health and productivity efforts during COVID-19, and positively impacting healthcare costs by improving financial health. We’ve got a great group of speakers who are experts in their industries, and we certainly hope that you can attend.

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Now for today’s guest, I recently sat down with Nanette Oddo, Chief Strategy Officer at Truveris. Hi, Nanette.

Nanette Oddo (1:52)

Hey, Mike. How are you?

Mike Stull (1:53)

I’m doing great. Thank you. Hey, before we get started, can you tell us a little bit or tell the audience, I guess, a little bit about yourself and your company?

Nanette Oddo (2:03)

Sure. So I’m Nanette Oddo. I’m the Chief Strategy Officer at Truveris.

And Truveris is really about bringing transparency and affordability for better health outcomes to the pharmacy benefits space on behalf of plan sponsors. Why am I in this space? I’m passionate about those things.

I think if you don’t take into account all stakeholders in the process, it falls apart. If you put too much on the member, you leave too much to the plan sponsor. Somehow, if you’re not doing this together, it leads to bad outcomes.

And so here we’re very passionate about looking at how to use insights to create the right marketplace and really bring members in through engagement for the best possible outcome.

Mike Stull (2:44)

Awesome. Well, thanks again for being with us. I know we have a number of questions that I wanted to explore with you.

The first one that I have here has to do with kind of the marketplace dynamic that we see as more and more of the mid-market PBMs tend to be working with one of the big three to aggregate rebate contracting and even the retail network contracting. And so we’ve seen PBMs like Humana and Prime Therapeutics and some others partner up with, in their cases, the Express Scripts GPO for rebates. One of the questions that has come to my mind is, if all the PBMs are working together on rebate contracting, how do they differentiate from one another?

And I’m curious how you see that.

Nanette Oddo (3:43)

Yeah, I think that we ask ourselves the same question. And what we’re seeing across the board is that everyone’s trying to and is achieving a way of differentiating themselves, whether that’s that they’re taking a tweak even on those rebates through a formulary change. They’re offering some sort of flexibility that way, especially when it comes to high-cost meds and even starting to talk about programs that have direct rebating or a different type of UM.

People are trying to partner better with pharma. And I think as more transparency could come to this, the fact about the rebates is just going to be another financial dot, an important one. But it’s really about the value and outcomes that come out of that, as opposed to just the dollars.

Mike Stull (4:29)

So one big differentiator could be the PBMs ability to get participants and their docs who are writing the scripts to actually change behavior.

Nanette Oddo (4:41)

They can. And I think that more and more of these hubs that are being stood up in different types of hubs than traditional. I mean, the hub in the past was really customer service in some respects, the couple of bells and whistles.

But yeah, that’s one differentiator. I do think another one is allowing for a third party to be involved, because sometimes something new in the bloodstream can also be a differentiator.

Mike Stull (5:05)

Yeah. And certainly we’re seeing more and more requests to allow a third party to be involved. And so having that flexibility is definitely something that differentiates, particularly the mid-market PBMs, from some of the larger PBMs.

Nanette Oddo (5:21)

What are your employers actually saying about rebates these days?

Mike Stull (5:26)

Well, for our employers, I think rebates are still such a big part of the financial equation. And a lot of them, because they have rich benefit programs, thinking about who our clients are, a lot of legacy Midwestern manufacturing clients, educational institutions, governmental entities, all with large union presence. And so, some very rich negotiated benefits.

For them, I think the value of the rebate is even more important because they don’t necessarily have the plan design or the same tools available to them to either restrict a network or restrict a formulary or do some of the other more innovative things that progressive employers are doing. So the rebates continue to be a big part of their financial model. They continue to use them to offset plan costs.

And so a lot of them will use them in the rate setting process. So it does make a big difference for a lot of those. I would say our utilization is well, just because of the nature of who’s in our plans.

I would say that we continue to have a lot of inflammatory conditions, a lot of the diabetes and other chronic conditions that typically you would expect to see in those types of populations. And so particularly for those classes where there aren’t a lot of generic options, the rebate plays a big role.

Nanette Oddo (7:16)

Sure. We’re actually seeing a lot of requests to investigate aggregators as well, because one of the issues, as you know, it’s a reason that people come to you guys for service is they don’t want to be directly tied to the PBM for all their services. They want someone in the middle.

They want someone to help interpret the data. And they want to be able to make that decision to be a little more portable with the option of portability of their formula and rebate. And I think they’re starting to see that through technology, their ability to do that is greater than it has been in the past with fewer hands even being involved in HR and the benefit space.

Mike Stull (7:55)

Yeah, I think that the disaggregation concept is definitely something that we’re seeing again, more and more employers explore. Interestingly, we explored this probably. I always black out 2020, so I have to make sure that I include it.

But it’s probably been three years now that we went around and did this exploration. And at that time, again, trying to do this at coalition level, we couldn’t get the financial modeling to make sense. But certainly on an individual employer level with its unique utilization patterns, they might be able to make that work.

But something that continues to evolve, and it’s something that we’ll continue to take a look at as we move down the road. Next area I wanted to jump into is kind of related in terms of the vertical alignment that we’ve seen between PBMs and the health plans. And obviously, that was big in the news a couple years ago when all those deals took place.

And just curious from your seat, if you’ve seen any big changes that benefit plant sponsors since those deals came to fruition?

Nanette Oddo (9:10)

It’s a great question. It could be that there’s going to be further value from those. And then that value, we’re still waiting to see those results.

What we see, quite frankly, is that plant sponsors, unless they’re fully insured, are starting to ask very directly, I want to look for my PBM benefits with folks that work well with my medical carrier, but it doesn’t have to be my medical carrier’s PBM. They want to look at this a variety of ways. And I think what they’re really trying to test is, is the full value there economically on the front end, and what is there to help me on the back end?

So I think where we want to start to see a lot more of that integration payoff is around full outcomes on specialty, especially when specialty doesn’t get carved out, because that’s another issue all in itself as to how specialty drugs are being treated by plans. But we’re seeing that people in the marketplace want to look at their options in multiple dimensions, instead of just having full service by each PBM in the market and being completely dependent on that. They’re testing it at renewal.

That’s where we’re really seeing it. What about you guys?

Mike Stull (10:31)

Yeah, obviously, our entire model is built on carving out pharmacy from the medical benefit. And the reason that employers started doing that 30 years ago through our organization was because they didn’t see the value. And the reason we’ve continued to grow is that, again, they’ve looked for a decoupling in terms of medical and pharmacy.

They realize that the claims are being processed separately. In a lot of cases, the PBM that a health plan uses is still a PBM. It’s a third party.

And so I don’t think that our employers have obviously seen the value of integration that’s being talked about out there a lot. It’s been talked about for the 16 or so years I’ve been here. It’s just out there a lot more now.

I mean, I think about it on the PBM side, how hard it is for some of the PBMs just to integrate the rebate numbers into the pharmacy numbers. I think it’s even more difficult to get the separate pharmacy numbers into the medical numbers and to be able to do the analysis that’s really needed to show that there’s this big difference between carving in and carving out. And so I just think from our perspective, there’s a lot of talk about it, but I’ve yet to see where the value really is.

Nanette Oddo (12:05)

Yeah, I would agree. Some of the things we have seen is that they’re trying to put analytic teams together that are trying to be that gooey, but independent, but still maintained by the carrier for that better communication. But like I said, we’re waiting to see that net outcome be better.

But when you look at those plays, when you think about financially, what we see is the largest of employers seemingly benefit, and these are very tied to what we were talking about as the first topic. We see they’re very tied together where really out of norm rebate values are out there for large employers, and that the mid-market seems to hang around contract. And what we see is those values are greater when there’s an integrated.

It may be carved out, but it’s that the carrier has both the pharmacy and the medical. How do you talk about that with employers and try to help them establish something that is sustainable as opposed to a point in time there on those rebate values as a result of how they do pick the medical?

Mike Stull (13:19)

Yeah, so I think that there’s obviously a lot of cross-subsidization going on as it relates to tying medical and pharmacy together and then providing these big rebate numbers or rebate guarantees. I think generally speaking, we try to get employers to look at what’s been, especially if they’re with us today, or we can show them it’s one of the benefits of being a coalition is you can actually take a snapshot in time, and it is what it is because we have set pricing. So we can show how that has changed over time, and then we can look at what’s being proposed through these types of analyses or these types of guarantees, I should say, and be able to try to see what are they really doing here?

Is it true value that’s going to be sustainable over time, or is it a case of shifting the chairs around on the deck in order to put more value into your talking point? So if your differentiator is there’s value in integration, and you can take dollars out of the traditional rebate bucket and put them over into this integration bucket, that’s exactly what I think that they’re doing, and employers have to figure out, is that best for me? And like you said, not just in a point in time, but is this going to be best over the next three years?

Is this going to be best over the next five to 10 years if you’re not interested in moving vendors every three years? And if you decide, I think the other piece is, if you decide to change your health carrier, well, now you’ve got to change PBMs as well. And so I think that’s one of the cautions of putting everything in the same bucket, is it sure makes it hard to uncouple it when you decide that it’s time to move.

Nanette Oddo (15:25)

Yeah, we see the same thing.

Mike Stull (15:27)

So speaking of a lot of opportunities to uncouple things, a lot of add-on solutions out there. You referenced some of the carve-out solutions. We hear them called point solutions as well.

Any that you see that are really filling a needed gap for plan sponsors, in your view, that they can’t get from their PBM?

Nanette Oddo (15:52)

Well, I think that it’s really, as you just said, the comparison of even if they can get them from the PBM. I’m not sure it’s about filling a gap, but it’s about how is the need being fulfilled, and why does it need to stay, and is there a value in that movement? And you can’t really test that until you put it to bid, quite frankly, because top-line rates won’t necessarily show these differences.

You’ve got to actually have the ability to flexibly look at this during the procurement process, use previous year’s analytics to test it, you know, and claim so that you can normalize it, and really look at what the push and pull is by looking at those solutions. And I think that what’s tough for employers is a lot of times terminology that gets placed out there deters them from thinking about, you know, can I easily do this? Is this as hard as someone makes it sound?

Just because you get a manual that has 14 steps to achieve something doesn’t mean that it’s harder to achieve that versus a three-step. This three-step manual could be quite confusing in the words that are given to you, and so you end up spending far more time trying to figure out how to put the piece of furniture together as opposed to the 14 steps that are, you know, very illustrative and easy. I think that what I like about what’s going on is that these different solutions and services are challenging the system, and are challenging the PBMs, to your point, to prove themselves, because, you know, like you said, even if they’re integrated, they’re still a PBM, and they’re still separate from the medical, and that already, even though that looks integrated, is separate, right?

So what’s the difference in looking at splitting up the PBM from the medical? What’s the difference in looking at a different network for their specialty? What’s the difference in looking at someone else to do the utilization management?

The only thing that’s required, which, you know, the world has gotten explosively better at during this pandemic, is communication. It requires communication and data integrations, which have been key point to the last year for most companies to have to upgrade, and so I think it’s making it easier now than ever for these solutions to put a bright light on cost, value, and ultimate impact to the member and plan sponsor.

Mike Stull (18:23)

I loved your statement about, if nothing else, these point solutions have forced the incumbents to get better, and we see that so often, whether it’s on the specialty side with the specialty carve-outs, whether it’s PA carve-out or full specialty carve-outs, certainly we’ve seen some improvements from the PBMs. GoodRx, even the NADAC pricing that’s out there, provides some transparency that wasn’t there before. We didn’t have the supporting data points to be able to ask the questions before.

It is driving better results, regardless of whether groups are actually carving out or not, and I know those third-party solutions don’t want to hear that, you know, it’s making the incumbents better, but it does tend to be the reality of at least what we’re seeing. From your seat, any other thoughts we talked about, or I just mentioned the outsourcing of PA or variable co-pays, tapping into those needs-based assistance programs, even the full-fledged specialty carve-outs, seem to make a big push, and having the PBMs take a look at what they’re doing and make changes. I’m curious if you’re seeing that from your spot as well.

Nanette Oddo (19:44)

Well, I think that when I, I think again, those are just pushing on the PBM or testing their solution against an alternative, right? And I think the employers, they like the headlines they might be seeing, but then when they try to understand what is new that’s out there, I think from our perspective, what we’re asked a lot is, we see it and it suggests there’s value, but value isn’t just about the cost. Is the member actually going to use it?

Is the member going to understand how to use it? And I think that comes back to some of those tools that you, and as you call them, point solutions that are available. I think that what plan sponsors, some examples they’ve used with us, and we’ve had discussions around, you know, if you have an iPhone, there’s a variety of health apps, you know, including theirs, that you can download.

At the end of the day, if you go out and you ask your doctor, do you have one of these they prefer? What they say is, I prefer that you’ve just become active and that you’re willing to do anything, okay? And you’re willing to use that app.

And those are meant to help you get better. And if you’re getting better, then it’s providing what I need. I don’t need the data. You need the data. I don’t care which app you use. And I think that that’s very true about some of the other things that are around pharmacy.

I think that plan sponsors, as long as people can integrate the data back, if they care for it to be integrated back, some don’t need it to be, that there are lots of choices out there that are going to empower the member or educate the member or guide the member on what to do, because the last mile is what’s missing in most of these. To your point, you know, when you think about that some of the employers you talked about don’t have the ability to have the plan designs that might drive savings to a greater level. Even if they did, the member has to fall into that and understand it.

And I think that when you think about some of the solutions for specialty, when you start looking at solutions that are vertically integrated, like you have to just use the PBM specialty, or you have to use just the PBM’s member engagement tool, or you have to use their UM, you know, fill in the blank on that sentence for anything. Is that achieving what they want when the member is trying to say, I like chocolate, vanilla, and strawberry. I want to use something else.

I think it takes a village. I think that people’s understanding of their benefits, as we all know, we’re in this business, Mike, you and I, even I have questions. I don’t always understand something that comes from the plan.

And I hear that from our employees too. So people have to find what works for them. And I think employers are okay with that. I think other suppliers in the chain have to get okay with letting people use other tools, they get the last mile.

Mike Stull (22:33)

All right. Last question that I wanted to get your thoughts on today, and we’ve already talked about it in terms of the claims data. Are there specific ways that, or do you have specific examples of how you’ve used claims data to identify certain things that are happening within the plan and specific contract changes, or requirement changes that you need to address in an RFP?

And then maybe just touch on, I know that Truveris uses data a lot in terms of using it as part of the RFP process, using it as part of the evaluation. Talk to us a little bit about why it’s so important for employers and other plan sponsors to have someone who monitors and takes deep dives into the data on an ongoing basis, not just once every year or every three years.

Nanette Oddo (23:30)

Well, I think I’d liken it to that I could do my own taxes, but it’s probably a really good idea for somebody else to look at them too. There’s a complexity, there’s a second set of eyes. There’s just also the idea of people being outside, forest and the trees can see something differently.

So I think the value of having someone look at the data, even if sometimes it’s the same report, you’d like to see that it ties out and if it doesn’t, why doesn’t it? And then in addition, we see an enormous amount of plan designs when you’re with a certain PBM. I mean, this is what you see in the bid process and when you change, you get alternatives that you, or suggestions that you might not have heard before as an employer.

And you also may have grown during that timeframe from the first contract to the next. And that opens up opportunities for you that you hadn’t seen with the current PBM or structure and design. So yes, we rely heavily.

You’re correct. We rely heavily on our insights. Our clients rely on those insights, and they come pre-bid.

They come during the competitive procurement process. They come during the contract, and they can come at the end to start over as well. It’s just ongoing.

I really loved what you said earlier about people having access to the data. We all have plenty of portals that everyone asks us to log into everything, from making an appointment now to see your physician, to even getting the results back so that you don’t have to try to keep calling back to find out what happened on the test. And I think that this is, it’s also true in this case.

There’s lots of ways you can deliver the data, but how you get someone’s attention around the insights is the most important thing. And I think that’s the relationship and having the ability to have tough conversations as well as fun conversations around the results that someone’s achieving through their contract and the ongoing dispensing and management.

Mike Stull (25:29)

Yeah, I appreciate that. And I think one of the things that we try to do here is use the 10 million plus claims that we have access to under our contracts to use those data as insights into what’s happening, try to look at what’s coming, make it like an interactive, it’s a vital tool versus something that’s static that happened in the past. And I think as we think about how a lot of employers make decisions, they’re simply looking at a snapshot of the data at some point in the past, making a decision with the expectation that those data are going to stay the same.

When in reality, those data are going to change and they’ve probably changed from the time that it was taken to today, they’ve probably changed. So it’s how do you make that a more interactive process? How do you use the data, project the data?

Like you said, use it to your advantage and use it for some of those conversations in terms of, well, what if, and here’s what we’re seeing, why are we right or why are we wrong?

Nanette Oddo (26:45)

Yeah, I think the predictive nature comes when you have the types of claims and volume that you do, that we do. And again, we’re across so many different benefit managers that we actually see trending differently, right? You’re getting reporting around that from just your one source, meaning the employer’s current PBM.

It is very hard to understand, and benchmarks aren’t going to cut it for exactly what you just said. I mean, benchmarks are great. There’s nothing wrong with them.

It gives you the security of where you stand at that moment in time, but how you can use that as almost a predictive benchmark of where is this going? Where does trend look like? And really get into, I think one of the things that we try to discuss also is to not always look, especially at the headlines that are out there around gross costs.

What’s next? You know, gross to net, what comes into that? We educate employers all the time that it isn’t just some price hike, right?

And maybe there wasn’t a price hike even at all. And what does it look like, you know, when a new entrant’s coming in? I also think that what comes into the data is getting people away from the top of the sphere decisions.

With new meds coming out, people become very fearful of, well, that’s where my next cost is headed to. And that isn’t necessarily the case. There’s so much in the meaty middle that they can continue to look at.

And it’d be a reward-based program as well, as opposed to a penalty-based or a lack of coverage or a differential copay, whatever it is. Yeah, I would totally agree with you that the predictability of that and then applying it to practical tools to educate the member to make the right decision are really key.

Mike Stull (28:22)

Awesome. Anything that we didn’t cover today that we should talk about?

Nanette Oddo (28:27)

I just look forward to our continued fireside chats. They’re always interesting. And, you know, let’s all hope that we have a wonderful, safe summer and continue to see our economy and our benefits and everything grow as the sunshine pours in.

Mike Stull (28:43)

Absolutely. Well, thank you, Nanette, for joining me today. And we’ll talk again soon.

Nanette Oddo (28:50)

Yeah, take care, Mike.

Mike Stull (28:52)

Thanks again to Nanette for her time and for providing her unique insight on the pharmacy benefit industry. I love to hear the innovative way stakeholders are working to address healthcare delivery and the rising costs incurred by plan sponsors and their participants. With that, it’s time for today’s keyword.

This month’s keyword is innovation. If you’d like to be considered to win next month’s gift card, be sure to submit the keyword innovation on the Employers Health podcast page.

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That’ll conclude this month’s episode. Thank you again to Nanette for sharing her expert insights on the pharmacy benefit industry and thank you for taking the time to listen and for your continued membership, participation, and interest in Employers Health.

Be well, and we’ll see you soon.