Reinventing Pharmacy (Part 2): Dr. Troyen Brennan Disputes the False Narrative of Good vs. Bad Actors

In the first of a series of episodes exploring opportunities for
innovation in the pharmacy space, Mark Cuban offered perspective
from an outsider intent on disrupting the status quo. In this,
the second episode, Dr. Troyen Brennan gives an insider
point-of-view from someone who has studied and worked in the
space for decades.

Dr. Brennan was Chief Medical Officer at CVS Health for nearly 14
years, and before that, Chief Medical Officer at Aetna for two
years. He was also a practicing physician at Brigham and Women’s
Hospital for 15 years where he was president of Brigham and
Women’s Physician Organization. During that time, he was also
Professor of Medicine at Harvard Medical School and Professor of
Law and Public Health at the Harvard T.H. Chan School of Public
Health. He is the former Chair of the American Board of Internal
Medicine and has published six books and more than 600 articles
offering his insight into the American healthcare system, and his
ideas on how to improve it.

With extensive knowledge of how the industry has evolved, and an
understanding for why many of the complexities in the industry
exist, Dr. Brennan offers a unique viewpoint about where and how
disruption in the pharmacy space can succeed. In his eyes, the
idea of good and bad actors in the pharmacy space is a false
narrative. With an historical perspective, he explains how
industry processes were all sensible when they were first
implemented, and how that viewpoint is critical to understanding
and addressing some that may have become seemingly senseless over
time. 

A few of the topics he discussed with Keith Figlioli in this
Healthcare is Hard episode include:



Six ways PBMs have lowered cost. Dr. Brennan provides a
history of pharmacy benefits managers (PBMs), why they were
created in the late 1950s and how they have helped the pharmacy
industry. He discussed his thoughts on the six things PBMs have
done – and are still doing – to help control costs. These
include expanding the use of mail order pharmacies, sourcing
generic drugs, introducing tiered pricing, implementing prior
authorization and utilization management, assembling pharmacy
networks, and negotiating rebates.


Flexibility of PBMs. When discussing the future role
PBMs may or may not play in the industry, Dr. Brennan says he’s
confident in the ability for big PBMs to adapt. He believes
they’ve proven to be more flexible than other parts of the
healthcare system and will continue to have significant
influence as regulations evolve and disruptors enter the
market. He says that Mark Cuban is having a good influence on
the industry overall with Cost Plus Drug Company, but would bet
on the ability of PBMs to adapt.


The path to greater affordability. With new,
life-changing therapeutics being introduced regularly and
specialty pharmacy expected to become a significant portion of
healthcare spending, Dr. Brennan discusses some of the
potential options for ensuring these treatments are affordable.
He believes entrepreneurs disrupting the space can help
contribute, but regardless of the role they play, says
government will ultimately have to step in with price controls.
He points to the role government plays controlling the costs of
hospital services and says it will eventually have to play a
similar role in the pharmacy space.



To hear Dr. Brennan and Keith discuss these topics and more,
listen to this episode of Healthcare is Hard: A Podcast for
Insiders.