Encore! EP231: Pharmaceutical Contracting, PBMs, Pharmacies, Employers, and the Latest HHS Rebate Proposal, With AJ Loiacono, CEO of Capital Rx

In this Encore episode, Stacey Richter talks with AJ Loiacono, CEO of Capital Rx, about pharmaceutical contracting, PBMs, pharmacies, employers, and the HHS rebate proposal aimed at eliminating kickbacks to middlemen.

WHAT YOU'LL LEARN

✅ What the HHS proposal to eliminate rebate safe harbor actually changes

✅ Why swapping the term "rebate" for "charge-back" matters, and how point-of-sale charge-backs would work

✅ Who the potential players are in paying pharmacies under a new model: PBMs, wholesalers, switches, banks/fintech, government contractors

✅ Why PBMs have strong incentives to maintain the status quo

✅ Why pay-to-play formulary access is so hard to escape, even under a new rule

WHY THIS MATTERS

AJ Loiacono unpacks the hidden machinery behind pharmacy adjudication just as HHS was finalizing a rule to eliminate the safe harbor protecting drug rebates in Medicare Part D, worth $39.8 billion in 2019 alone. Renaming a rebate a "charge-back" and moving it to the point of sale sounds simple, but it reshuffles who controls the payment workflow and who gets to take a cut. Understanding that dark, messy middle matters regardless of whether this specific HHS rule survives, because the incentives it's trying to fix aren't going away.

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

🔗 Healthcare Industry Acronyms and Terms

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=== CONNECT WITH THE RHV TEAM ===

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00:00 Introduction

03:03 HHS's plan to remove safe harbor from the rebates that Pharma pays to PBMs to buy their way onto formularies.

03:13 Creating more transparency by eliminating the anti-kickback.

03:58 What the anti-rebates process flowchart looks like.

04:20 Changing the term from "rebate" to "charge-back."

04:25 Charge-back at the point of sale rather than post-adjudication.

04:37 How putting the pharmacy in the middle of the transaction changes everything.

05:36 "From a cash flow perspective, this matters."—Stacey

07:18 "Who is in charge of this payment workflow?"

09:25 "Why the switch?"

10:56 The potential players in the role of paying pharmacies: PBMs, wholesalers, the switches (McKesson), banks/fintech, government contractors.

12:04 The likelihood that this will spill over into commercial medicine.

14:11 Why PBMs want to maintain the status quo, and how that works.

15:44 "Where there's variability, there's variable profitability."

17:28 How do you check that the patient is getting the charge-back amount they deserve?

18:28 Is it still possible to pay to be on a PBM's formulary?

19:16 Can you ever get away from the pay-to-play formulary?

22:31 "If you think about it, who's writing the checks at the end of the day?"

22:59 What questions should employers be asking right now?

25:20 The problem with implementing HHS's primary goal.

30:51 "Really what we should be focusing on is, 'What are we solving for?'"

32:26 Capital Rx and what they do.